    [Senate Hearing 108-705]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 108-705

                                                            Senate Hearings

                                     Before the Committee on Appropriations

    _______________________________________________________________________

                                                              Department of

                                                          Homeland Security

                                                                Fiscal Year
                                                                       2005

            th CONGRESS, SECOND SESSION  108

                                                          H.R. 4567/S. 2537

    DEPARTMENT OF HOMELAND SECURITY

    NONDEPARTMENTAL WITNESSES
           Department of Homeland Security, 2005 (H.R. 4567/S. 2537)
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
    Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001

                                                            S. Hrg. 108-705

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED EIGHTH CONGRESS

                                 SECOND SESSION

                                       on

                               H.R. 4567/S. 2537

     AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF HOMELAND SECURITY
     FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2005, AND FOR OTHER PURPOSES

                                   __________

                        Department of Homeland Security
                           Nondepartmental witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

     Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                     senate

                                   __________
                          COMMITTEE ON APPROPRIATIONS

                         TED STEVENS, Alaska, Chairman
    THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
    RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
    JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
    ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
    BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
    LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
    KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
    MIKE DeWINE, Ohio                    TIM JOHNSON, South Dakota
    SAM BROWNBACK, Kansas                MARY L. LANDRIEU, Louisiana
                        James W. Morhard, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                  Terrence E. Sauvain, Minority Staff Director
                                     ------

              Subcommittee on the Department of Homeland Security

                      THAD COCHRAN, Mississippi, Chairman
    TED STEVENS, Alaska                  ROBERT C. BYRD, West Virginia
    ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
    PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
    MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
    RICHARD C. SHELBY, Alabama           TOM HARKIN, Iowa
    JUDD GREGG, New Hampshire            BARBARA A. MIKULSKI, Maryland
    BEN NIGHTHORSE CAMPBELL, Colorado    HERB KOHL, Wisconsin
    LARRY CRAIG, Idaho                   PATTY MURRAY, Washington

                               Professional Staff
                                 Rebecca Davies
                                   Les Spivey
                                  James Hayes
                                  Carol Cribbs
                                Kimberly Nelson
                           Charles Kieffer (Minority)
                            Chip Walgren (Minority)
                            Alexa Sewell (Minority)
                             Scott Nance (Minority)

                             Administrative Support

                                  Avery Forbes

                                C O N T E N T S

                                  ----------

                           Tuesday, February 10, 2004

                                                                       Page
    Department of Homeland Security..................................     1

                          Thursday, February 26, 2004

    Department of Homeland Security: Office of the Under Secretary
      for Emergency Preparedness and Response........................   141

                             Tuesday, March 2, 2004

    Department of Homeland Security..................................   189

                             Tuesday, March 9, 2004

    Department of Homeland Security..................................   295

                            Tuesday, March 23, 2004

    Department of Homeland Security..................................   357

                            Tuesday, March 30, 2004

    Department of Homeland Security..................................   465
    Nondepartmental Witnesses........................................   571

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                           TUESDAY, FEBRUARY 10, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:02 a.m., in room SD-106, Dirksen
    Senate Office Building, Hon. Thad Cochran (chairman) presiding.
        Present: Senators Cochran, Stevens, Specter, Domenici,
    Gregg, Craig, Byrd, Inouye, Leahy, Harkin, Mikulski, Kohl, and
    Murray.

                        DEPARTMENT OF HOMELAND SECURITY

    STATEMENT OF HON. TOM RIDGE, SECRETARY

                   OPENING STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. The hearing of our committee will please
    come to order.
        Today we begin our review of the fiscal year 2005 budget
    request for the Department of Homeland Security. I am pleased
    to welcome to the hearing the Secretary of the Department of
    Homeland Security, the Honorable Tom Ridge.
        Under the Secretary's leadership, this new department,
    which became operational not quite 1 year ago, has undertaken
    the challenge to improve the safety and security of the United
    States. Merging some 180,000 employees from 22 separate
    agencies into a new department has been a very challenging
    endeavor. Recent events have underscored our awareness that
    challenges still lie ahead as the department continues its work
    to prevent terrorism, to reduce the Nation's vulnerability to
    terrorist acts, and to increase our disaster response
    capabilities.
        While we all understand that more will be done, the
    administration with the active support of this committee and
    the Congress is succeeding to improve our intelligence-
    gathering capabilities; achieve a greater degree of
    coordination and cooperation among all those involved in
    homeland security; develop and deploy new detection
    technologies; and heighten security of our borders, ports,
    transportation systems, and other critical infrastructure.
        We will review this year's budget request and work with
    you, Mr. Secretary, to provide the resources the department
    requires to manage its responsibilities and to successfully
    carry out its mission. For fiscal year 2005, the President's
    budget requests $40.2 billion to fund programs and activities
    of the department, including mandatory and discretionary
    appropriations, user fee collections, and trust funds.
        At this point, I am very pleased to yield to other senators
    on the committee, first to my distinguished friend from West
    Virginia, who is the ranking Democrat on this subcommittee,
    Senator Byrd, for any statements he might wish to make.

                      STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you, Mr. Chairman, my colleagues on the
    committee, and welcome, Mr. Secretary.
        As we approach the 1-year anniversary of the creation of
    the Department of Homeland Security, this subcommittee will be
    holding a series of hearings on the President's request for
    your agency. These hearings will focus not just on the budget
    request for the department, but also on the effectiveness of
    the department in using the resources that have been available
    to it to make this country safer. I look forward to your
    testimony on efforts to secure the homeland by other Federal
    agencies, by State, regional, and local governments, and by the
    private sector.

                               ALERT LEVEL CHANGE

        On Sunday, December 21, you raised the Nation's terror
    alert level to orange. In justifying this action you said, and
    I quote, ``The strategic indicators, including Al Qaeda's
    continued desire to carry out attacks against our homeland, are
    perhaps greater now than at any point since September 11.'' In
    explaining why you thought there was a high risk of terrorist
    attack, you said, and I quote, ``Information indicates that
    extremists abroad are anticipating near-term attacks that they
    believe will rival or exceed the scope and impact of those that
    we experienced in New York, at the Pentagon, and in
    Pennsylvania 2 years ago.''
        That was a pretty sobering assessment. When I read your
    testimony, I note that the President claims he is seeking a 10-
    percent increase for your department. I thought perhaps the
    administration had finally gotten the message that it was time
    to back up the President's rhetoric on homeland security with
    real resources.

                        FISCAL YEAR 2005 BUDGET INCREASE

        But, Mr. Secretary, I was disappointed to learn that when
    one looks at the details in the President's budget, the 10-
    percent increase is just another puffed-up gimmick. The fact is
    that the Department of Homeland Security receives only a 4-
    percent proposed increase in discretionary spending, only
    slightly more than enough to cover inflation and the 2005 pay
    raise.
        In the fiscal year 2004 Homeland Security Appropriations
    Act, Congress approved advanced appropriations of $2.5 billion
    for Project BioShield for the period from fiscal year 2005 to
    fiscal year 2008. In your budget presentation, you include the
    entire $2.5 billion as 2005 spending, despite the fact that
    those funds are supposed to last 4 years.
        Your own budget documents show that you expect to spend
    only $890 million of the $2.5 billion in fiscal year 2005.
    After adjusting the budget request for that gimmick, the
    increase in the fiscal year 2005 budget is only 4 percent. So
    that means that the President is seeking a 4-percent increase
    when you believe that the threat of another terrorist attack is
    higher than at any time since September 11.
        I share the view, Mr. Secretary, that this Nation is at
    risk of more terrorist attacks. We continue to be vulnerable to
    a wide range of potential threats. On December 15, 2003, the
    advisory panel to assess domestic response capabilities for
    terrorists involving weapons of mass destruction issued their
    final report. The panel, which was headed by the former
    Republican Governor of Virginia, James Gilmore, concluded that
    the department must learn from history without falling into the
    trap of fighting the last war by concentrating too heavily on
    the tactics and techniques used by the September 11 terrorists.
        Yet in this budget, 97 percent of the budget for the
    Transportation Security Administration is for aviation security
    with a focus on more airline hijackings. What about the
    security of our ports? What about our buses, our trains? Why
    does the President propose to reduce grants to ports for
    improved security by over 60 percent, when over 95 percent of
    all overseas trade coming in or out of the country moves by
    ship? Why does the President refuse to increase resources for
    securing cargo on passenger aircraft?
        Eight days ago, in this very room, Senate employees were
    quarantined and decontaminated for an attack with a dangerous
    toxin, ricin. Clearly, the risks of a chemical or biological
    attack in this Nation remain high. According to the EPA, over
    100 chemical plants located throughout the country could affect
    over 1 million people if the plants were attacked.
        In February of 2003, the National Infrastructure Protection
    Center, which is now part of your department, issued a threat
    warning that Al Qaeda operatives also may attempt to launch
    conventional attacks against the U.S. nuclear and chemical
    industrial infrastructure to cause contamination, disruption,
    and terror. Nuclear power plants and industrial chemical plants
    remain viable targets. And yet, Mr. Secretary, the President's
    budget does not include the request of the Post Office for $779
    million to develop biodetection systems that would help protect
    citizens across the Nation and for ventilation and filtration
    systems to protect their employees. The President also proposes
    to cut by 10 percent the HHS program designed to equip and
    train State and local health agencies to detect and respond to
    biological or chemical attacks.

                          FUNDING FOR FIRST RESPONDERS

        In June of 2003, the Council on Foreign Relations' report,
    authored by Former Senator Rudman and others, entitled,
    ``Emergency Responders: Drastically Underfunded, Dangerously
    Unprepared,'' asserted that America will fall approximately $98
    billion short of meeting emergency responder needs in the next
    5 years, if current funding levels are maintained.
        The Federal Emergency Management Agency, part of your
    department, in a report entitled ``A Needs Assessment of the
    U.S. Fire Service,'' found that only 13 percent of the fire
    departments have the equipment and training to handle an
    incident involving chemical or biological agents. And yet, Mr.
    Secretary, the President's budget proposes to cut grants that
    equip and train police, fire, and emergency medical care
    personnel by $729 million. Fire grants alone are to be reduced
    by 33 percent.
        In addition to these resource issues, this Subcommittee
    will also examine the effectiveness of our homeland security
    programs. We will ask questions about your methods for
    collecting and sharing intelligence. Just last week, we learned
    that the White House had been the target of a ricin attack.
    Sharing information with State and local law enforcement is a
    critical ingredient to effective deterrence.
        We will also ask if the department is doing everything
    possible to make sure that State, local, and regional
    governments are effective partners in deterring a terrorist
    attack. We will ask whether we are providing the right
    incentives, including money, to make sure that chemical and
    other industries are doing their fair share to make this
    country more secure.

                                    CAPPS II

        Finally, we will closely examine your plan to implement
    CAPPS II, a new information system for screening airline
    passengers. And I encourage you not to implement the new system
    until the requirements of the law have been met.
        Mr. Secretary, you and the 179,000 employees in your
    department are to be commended for your efforts to preserve our
    freedoms, to protect America, and to secure our homeland. We
    share your vision. I share your belief that we are a vulnerable
    Nation. We will ask many questions in an effort to understand
    what more needs to be done and what needs to be done
    differently in order to respond to the terrorist threat. We
    look forward to your testimony.
        Senator Cochran. Senator Gregg, you are recognized for any
    opening statement you may have.

                        STATEMENT OF SENATOR JUDD GREGG

        Senator Gregg. Well, Mr. Chairman, first, I appreciate your
    holding this hearing. And I appreciate Governor Ridge's
    attendance. And I have a lot of questions. I have obviously
    been involved in this issue, as many members of this panel
    have, for a long time. And just to highlight a couple of them
    quickly, I am very concerned about the discussion as to how
    this money is going out to first responders.

                           THREAT-BASED DISTRIBUTION

        I am totally supportive of the department's effort to do a
    threat-based distribution. I think we need to look at the
    history of this. The original concept here was created by the
    Domenici-Nunn bill, which the Defense Department had. And the
    idea was we were going to train the top 162 cities first and
    make them capable of handling a major threat event. That whole
    concept was carried forward under the prior committee that had
    jurisdiction over first responders, which was my committee,
    CJS. We set up the first responder money. And we wanted to make
    it a threat-based approach.
        This idea that we are just going to put money across the
    board to every community in America, we cannot afford that.
    What we need to do is focus it. And I congratulate the
    department for that. And I hope you will give us some more
    expansive thoughts on that and assure us that it is a threat-
    based approach for distribution there.

                                   ENTRY-EXIT

        Secondly, I am concerned about the exit-entry issue. The
    technology appears to me to be serious problems with that
    technology. And I am not sure that Customs and the Border
    Patrol activities are going to get the technology they need. I
    would like to get an update on that.

                         COUNTERTERRORISM COMMUNICATION

        I am concerned about the communication efforts in the area
    of counterterrorism. There appears to be lapses there. And the
    bioterrorism issue is our problem. We, as a Congress, have not
    passed BioShield. You have given us a proposal. We have not
    passed it. You should have that in hand. And if you want to
    castigate us on that, we deserve it. And please do today.

                                AIRPORT SECURITY

        And I am very concerned about the amount of money we are
    spending on airport security, as Senator Byrd outlined, and
    whether or not we are effectively addressing the threat coming
    across our borders by focusing so many resources on airport
    security. Anybody who goes through airport security today knows
    a lot of it is regrettably mindless security, which we have to
    get a handle on. Literally, you go into some of these airports,
    and you will have 20 or 30 security people standing there for
    an airport that has 20 flights a day. And it does not seem to
    have much relationship, especially now that we have secured the
    cockpit doors and these planes cannot be used as missiles any
    longer, but can still be blown up, of course.
        But the ports are a threat. Other entry points are a
    threat. And are we over-weighting our security efforts to
    airports, to the transportation of individuals versus
    transportation of cargo through ports or in airplanes?
        So there are a lot of questions. I look forward to hearing
    your answers and thoughts. And I would like to hear from you,
    so I will not take any more time. Thank you.
        Senator Cochran. Thank you, Senator.
        Senator Inouye.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Mr. Chairman, I request that my full
    statement be made part of the record.
        Senator Cochran. Without objection, it is so ordered.
        Senator Inouye. I just want to state that, as one living
    far away, I am a constant air traveler. And as such, I have
    been in a position to note differences, if any. And I must
    commend the Secretary, because there has been much improvement
    in our security system, as far as the air operations are
    concerned. Little things, such as they are not giving any
    preference to big shots, which I think is a clear indication of
    better discipline. The operation is much smoother. It moves
    faster and, I believe, much more effective.

                               PREPARED STATEMENT

        Secondly, coming from the ocean, I am naturally concerned
    about port security. I commend you for the increase in your
    funding there. But as my colleague from West Virginia
    indicated, I hope that improvements can be made on the grand
    picture.
        With that, I would like to thank you, Mr. Secretary.
        Secretary Ridge. Thank you, Senator.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Mr. Chairman, I look forward to discussing with Secretary Ridge the
    fiscal year 2005 budget for the Department of Homeland Security. In my
    review of the budget documents I was pleased to note the emphasis
    placed on port security, an issue of great importance to my state.
    However, I am concerned by many of the planned program consolidations
    and reductions that will impact state first responders. I am interested
    to learn how you will ensure that the Federal Government maintains the
    intent and results of the current programs that are proposed for
    consolidation.

        Senator Cochran. Thank you, Senator.
        Senator Stevens.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. Well, thank you, Mr. Chairman, Mr.
    Secretary. I join my colleague from Hawaii, Senator Inouye. I
    think the two of us spend more time on airplanes than any other
    member of the Senate. And there is no question that the system
    is improved. It was my privilege to spend some time with the
    members of our Nation who manage airports over the recess right
    after Christmas. And that was the general consensus, that
    everything has improved.
        But one of the things that almost everyone there expressed
    a hope was that we would analyze this now and see what is the
    threat. The threat in the beginning was perceived to be one
    thing. We basically have equipment now to examine for metal,
    for guns, for knives. But we are dealing with many substances
    now that those people who manage airports would like to work
    with you in order to see how we could address the possible
    broad spectrum of threats that affect us now.

                             NATIONAL ALERT SYSTEM

        The only other question, if I am not here, Mr. Chairman, I
    would like to put it on the record, pertains to the national
    alert system. The Appropriations Committee provided specific
    money for a study concerning the national alert system, which
    currently still deals only with radio.
        And we affirmatively believe that the mechanisms of
    communications now are so--there are such a myriad of methods
    now that there ought to be some consideration given to a
    ubiquitous system that no matter what form of communication you
    listen to or use, you would receive a message, whether it is
    over a cell phone or a blackberry or a computer or your radio
    or the television or cable, that every system would have an
    announcement of items of national concern. Not local concern.
    Leave that to the local people to decide what they want to do.
    But the national alert system, I think, needs to be reviewed.
    And we asked for a study. And my question pertains to when we
    will receive that study.
        Thank you very much, Mr. Chairman.
        Senator Cochran. Thank you, Senator.
        Senator Harkin.

                        STATEMENT OF SENATOR TOM HARKIN

        Senator Harkin. Thank you, Mr. Chairman. I would like to
    ask that my full statement be made a part of the record.
        Senator Cochran. Without objection, it is so ordered.
        Senator Harkin. Just a couple of comments, Mr. Secretary.
    Again, as we all know, we cannot protect the Nation perfectly
    against every conceivable threat. And, therefore, we have to
    make choices and devote our limited resources to those threats
    that we judge to be most likely and most serious. So this poses
    some very difficult choices for our first responders, those
    people out on the front lines.
        I made it a point, when this department was created, when I
    was appointed to this subcommittee, to go around the State of
    Iowa, to talk with the Governor, his staff, others in State
    Government. We visited each of 99 counties in Iowa to talk to
    the local emergency management personnel, the firefighters,
    police, EMS people, other officials. I wanted to find out what
    was on their minds, what they thought was most important, what
    they thought was working, what was not.
        Again, aside from all the other things, I was told by
    almost all these people that the biggest challenges they face
    today are the same they faced prior to 9/11: Crime,
    methamphetamine, natural disasters. FEMA is now a part of
    Homeland Security. It has become a really remarkable, world-
    class organization dealing with fires, floods, tornadoes,
    things that happen every year. We cannot renege on our
    commitment to help people in need due to these natural
    disasters. That is why I and others have fought so hard to keep
    the fire grant program.

                     INCREASED BURDENS ON FIRST RESPONDERS

        The first responders in Iowa would tell me that they are
    frustrated. When the alert level changes, they learn about it
    from CNN and not from the department. They do not know why the
    alert level is raised or what kind of threats they ought to be
    looking for. They tell me they are obliged to respond to vague
    mandates they do not fully understand, taking time away from
    other priorities. Often these mandates are unclear and costly.
        At the same time, some current reporting requirements are
    onerous and illogical. One county emergency manager in Iowa
    told my staff that he is required to report on contingency
    plans in case there is a tidal wave. And as he understands it,
    he is not allowed to answer ``not applicable.''
        And again, these increased burdens are coming at a time
    when State and local governments are hurting. Many are already
    laying off police, fire and emergency management personnel. The
    vast majority of firefighters in the United States are
    volunteers. Increased training requirements are needed. And
    they are burdensome. And at the time, local governments just do
    not have the wherewithal to do this.

                                 AGRO-TERRORISM

        One last thing I would just mention is agro-terrorism and
    the focus on the subject of agro-terrorism and what can be done
    with a small amount of agricultural commodities. I am concerned
    that perhaps we are not focusing enough on the subject of agro-
    terrorism and what could be done to interrupt our food supply,
    to contaminate food. Not that it might kill a lot of people,
    but just to spread terror, from things that could be done to
    our food supply chain.

                               PREPARED STATEMENT

        With that, Mr. Secretary, thank you. I compliment you on
    the job you are doing very well down there and look forward to
    working with you to keep this going.
        Thank you, Mr. Chairman.
        Secretary Ridge. Thank you, Senator.
        [The statement follows:]

                    Prepared Statement of Senator Tom Harkin

        President Kennedy said that ``to govern is to choose.'' We cannot
    protect the Nation perfectly against every conceivable threat. We have
    to choose. We have to devote our limited resources to address those
    threats we judge to be the most likely and most serious. This poses
    difficult choices for Congress and the Administration, as well as for
    local communities. It poses especially difficult choices for the first
    responders, those men and women who are truly on the front line--and
    whose lives are on the line when emergencies arise.
        One of my highest priorities since being appointed to the Homeland
    Security Appropriations Subcommittee has been to address directly the
    needs of these front-line professionals all across Iowa. My staff and I
    have had numerous conversations with the Governor of Iowa, with his
    staff, and with others in State government. I also asked members of my
    Iowa staff to visit each of the state's 99 counties to talk with local
    emergency management personnel, firefighters, police, EMS and other
    officials. I wanted to get the best ideas from these front-line
    professionals: What do they think is most important when it comes to
    homeland security. What do they think is working, and what is not.
        These meetings have been extraordinarily valuable to me. Security
    is on people's minds. Not surprisingly, Iowans were more than eager to
    share their insights and priorities. And their input has shaped my own
    approach to homeland security issues here in Washington.
        When the creation of a new Department of Homeland Security was
    first proposed, I supported the effort. We knew then that balancing,
    and probably shifting, among competing priorities would be a challenge.
    We must do all we can to protect the America from terrorist threats.
        But, at the same time, it remains vitally important that we protect
    Americans from other, more likely hazards. It is important that we not
    focus exclusively on large cities and major strategic assets. Frankly,
    I am extremely concerned about the shift of priorities in this proposed
    budget away from rural areas. Rural communities will continue to face
    major challenges. But, under this budget, they will face those
    challenges with fewer resources.
        It is a mistake to redirect funds from badly needed current
    programs. That just creates new holes in our homeland security
    infrastructure. In fact, wherever possible, we should aim to expand and
    strengthen existing emergency-response mechanisms. We should increase
    the capacity of local authorities to prevent or respond to terrorist
    threats and to deal more effectively with the much more common threats
    and emergencies they face.
        Iowans told my staff that the biggest challenges Iowans face today
    include many of the same problems they faced in June of 2000: crime,
    the methamphetamine scourge, natural disasters.
        Over the past several years, FEMA, now part of Homeland Security,
    has become a truly remarkable, world-class organization for dealing
    with fires, floods, tornados, and earthquakes. These things occur every
    year, regardless of other threats, and they continue to threaten lives
    and livelihoods. We cannot renege on our commitment to help people in
    need due to these natural disasters. This is exactly why I and others
    have fought hard to ensure that the fire grant program is retained.
        At the same time, first responders in Iowa tell me that they are
    frustrated. When the alert level changes, they learn about it from CNN,
    not from the Department of Homeland Security. They don't know why the
    alert level is raised, or which kinds of threats they ought to be
    looking out for. They are obliged to respond to vague mandates that
    they don't fully understand, taking time away from other priorities.
    Often, these mandates are unclear--and costly. While some funding is
    flowing, communities are unsure how exactly they should be spending it,
    and they fear spending it in a way that might not meet a later mandate.
        At the same time, some current reporting requirements are onerous
    and illogical. One county emergency manager in Iowa told my staff that
    he is required to report on contingency plans in case there is a tidal
    wave--and, as he understands it, he is not allowed to answer ``not
    applicable.'' I suspect that if a tidal wave big enough to cause damage
    in Iowa were to hit the United States, our least concern will be
    inadequate tidal wave planning in rural Iowa!
        These increased burdens are coming at a time when State and local
    governments are hurting. Many already are laying off police, fire, and
    emergency management personnel. The vast majority of firefighters in
    the United States are volunteer. Increased training requirements for
    these personnel, while useful, can be extremely burdensome. We are
    losing firefighters in Iowa. If we at the Federal level are going to
    create mandates, then funds must follow those mandates.
        Finally, I would like to mention the subject of agri-terrorism. As
    my colleagues know, a major agri-terrorism event could easily cause
    billions of dollars in losses. Anyone who has spent time in rural
    America knows the difficulty in trying to guard against every avenue of
    vulnerability. The key to protecting U.S. agriculture is making sure
    that our intelligence and response capabilities are in place both to
    prevent acts of terrorism in the first place, and to respond quickly
    should an attack occur. I think we are still falling short on response.
    I am very disappointed not to see more resources directed to building
    the capacity of our agricultural first-response system. We really need
    to take a hard look, and make sure we are doing all we can to protect
    U.S. agriculture and rural communities.
        I have been working closely with my State government--particularly
    with the state Homeland Security director, Ellen Gordon--to identify
    appropriate state and Federal responses to agri-terror. Iowa has been
    working overtime trying to map out a comprehensive plan to deal with
    this very difficult issue. I applaud their good work. And I look
    forward to working with Secretary Ridge and with my colleagues to give
    greater focus and priority to the threat of agri-terrorism.

        Senator Cochran. Senator Mikulski.

                    STATEMENT OF SENATOR BARBARA A. MIKULSKI

        Senator Mikulski. Thank you very much, Mr. Chairman and Mr.
    Secretary. Mr. Chairman, I, too, ask unanimous consent that my
    full statement be in the record.
        Senator Cochran. Without objection, it is so ordered.
        [The statement follows:]

                   Prepared Statement of Barbara A. Mikulski

        First of all, Mr. Secretary, I want to thank you for your personal
    visit to Maryland when Hurricane Isabel hit last September. It was of a
    magnitude that we have not seen for more than 80 years in Maryland. And
    your personal visit and the excellent response of FEMA is indeed
    appreciated. I'm here to thank you on behalf of the people of Maryland
    for coming to the State and touring the hard hit areas and for your
    team doing such a good job.
        I'd also like to thank the Department of Homeland Security and all
    of our security agencies for averting another terrorist attack on the
    United States of America. Through classified briefings and others, I
    know that the threat over the holidays was indeed real. The fact that
    were sitting here today having this hearing with no TV cameras shows
    that something must be working right. But for what you did over the
    holidays--and when I say you, I mean every single person who worked
    overtime--while we were sitting there having turkey and opening
    presents, there were people putting themselves out there. So I just
    wanted to say thank you, again, on behalf of the people of Maryland and
    all of us here, for all that you do to keep us safe.
        I have four areas of concern, however, that I want to address in
    the Department of Homeland Security fiscal year 2005 budget: High
    Threat Urban Area funding, Fire Grants, Port Security, and Coast Guard
    funding.
        First of all, I am very concerned about cuts to grant programs for
    State and local governments. The funding request for key first
    responder programs is down to $3.2 billion, which is $474 million less
    than last year. The State block grant program, which is distributed by
    formula, is reduced from $1.7 billion to $750 million. The Fire Grant
    program is reduced from $750 million to $500 million. However, I am
    happy to see an increase in grants to high threat, high density urban
    area funding, which is doubled to $1.45 billion.
        The High Threat Urban Areas funding is extremely important. The
    Mayor of Baltimore recently said that ``Cities are on the front line of
    homeland security, but in the back of the line funding. . . . The
    Administration and Congress should act now to direct appropriate
    homeland security funds to cities and eliminate the bureaucracy of a
    middle man.'' So while I applaud the President for recognizing the
    critical funding needs of our high threat, high-density regions, I hope
    I can work with you and the Members of the Committee to ensure that
    this money is getting where it is needed most: in the hands of the
    police, firefighters, and other emergency responders on the front
    lines.
        I am very concerned about the Fire Grant program, which is one of
    the true grassroots programs that we have. Senator Bond and I worked so
    hard on Fire Grant funding when FEMA was in our VA-HUD bill. However,
    this year's budget calls for $500 million in funding, which is $246
    million less than the 2004 level and $400 million less than the
    authorized level. I believe there is a compelling need to fund this
    program at its authorized level. In 2003 the U.S. Fire Administration
    received over 20,000 applications totaling $2.5 billion in requests. We
    know from FEMA and the National Fire Protection Association that at
    least 57,000 fire fighters lack personal protective clothing. That item
    in and of itself speaks to the enormous need in this area.
        Another area of concern is the budget request for port security
    grants. President Bush's request calls for $46 million in Port Security
    Grants, which is well below last year's level of $124 million. The
    Coast Guard estimates that $5.4 billion is needed for port security
    improvements. I want to echo again comments about Baltimore and how
    deeply concerned we are about the fact that our ports continue to be
    vulnerable. And its not only about money, but its also about a smarter,
    more efficient strategy for protecting our critical infrastructure.
        I am very supportive and proud of our U.S. Coast Guard, which is
    truly one of the most efficient and effective of all Federal agencies.
    The men and women of the Coast Guard put their lives on the line
    everyday to apprehend drug smugglers, protect our marine resources, and
    safeguard our environment. However, since September 11th they have been
    called on more than ever to protect our borders and ports. We need to
    provide the Coast Guard with the resources to meet these new
    challenges. Yet, the Guard operates a fleet of ships airplanes that are
    nearing the end of their useful life. In fact, some of their ships date
    back to World War II. That's why I am a strong supporter of the Coast
    Guard Deepwater Program, which would replace these antiquated systems
    with cutting edge technology.
        And last, but not at all least, I would hope that you would comment
    on one of the biggest changes that you are proposing: the combining of
    24 grant programs into a new office called the Office of State and
    Local Government Coordination and Preparedness. I presume the fire
    grants move over there. I believe you talk about it on page seven of
    your testimony. This is a big deal because people have complained about
    the need for a more efficient and effective coordination between
    Federal, State, and local governments, particularly as it relates to
    resources like we talked about--better communication and coordination.
        But I'd like to know where you're heading with this consolidation.
    And also, what will it mean? Will it be a disruption for all those who
    know how to apply? Is this going to be a whole new set of rules,
    regulations, and trade routes that our first responders will have to
    learn to be able to come to Washington for help? Or is this really
    going to solve the problems that mayors and governors have raised with
    you? But again, a really heart-felt gratitude for all that you do. I
    look forward to your testimony today.

        Senator Mikulski. First of all, Mr. Secretary, thanks are
    in order. I want to thank you for your personal visit to
    Maryland when Hurricane Isabel hit. It was of a magnitude that
    we have not seen for more than 80 years in Maryland. Your
    personal visit and the excellent response of FEMA is
    appreciated. I am here to thank you on behalf of the people of
    Maryland for coming and for your team doing such a good job.
        Additionally, I would like to thank the Department of
    Homeland Security and all of our security agencies for averting
    another attack on the United States of America. Through
    classified briefings, I know that the threat over the holidays
    was indeed real. And the fact that we are sitting here today
    having a conversation with no TV cameras shows that something
    must be working right. I would like to thank you for what you
    did over the holidays--and when I say you, I mean every single
    person who worked overtime. While we were sitting at home
    having turkey and opening presents, there were people who were
    putting themselves out there. So I just wanted to say thank
    you, and again on behalf of the people of Maryland and all of
    us, for everyone who worked so hard.
        In terms of where we are in homeland security, I want to
    echo concerns about the fire grant program, which is one of the
    true grassroots programs that we have. And, of course, Senator
    Bond and I worked so hard on that program when FEMA was over in
    our VA/HUD bill. The cut is $246 million from last year. And I
    would like to hear your elaboration on it.
        FEMA and the National Fire Protection Association found
    that at least 57,000 firefighters lack personal protective
    clothing. That item in and of itself, where we have to protect
    the protector, speaks to the enormous need.

                                 PORT SECURITY

        The other is the whole issue of port security, which,
    again, echoing my comments, affects a Maryland port. We are
    deeply concerned about the fact that our ports continue to be
    vulnerable. And it is not only about money, but it is also
    about a more efficient strategy.

                              GRANT CONSOLIDATION

        And last but not at least, I would hope that you would
    comment on the fact that one of the biggest changes is that you
    propose combining 24 grant programs into a new office called
    the Office for State and Local Government Coordination and
    Preparedness, one of which is moving FEMA over there. I presume
    the fire grants move over there. And I believe you talk about
    it on page seven of your testimony.
        This is really a big deal, because people have complained
    about the need for more efficient and effective coordination
    between our State and local governments, particularly
    resources, like we talked about, communication coordination.
    But to move 24 grant programs, I would like to know where you
    are heading and also what will it mean. Will it be a disruption
    for all those who knew how to apply? Is this going to be a
    whole new set of rules, regs, trade routes that they have to
    learn to be able to come to Washington, or is this really going
    to solve the problems that mayors and governors have raised
    with you?
        But again, a really heartfelt gratitude.
        Secretary Ridge. Thank you, Senator.
        Senator Cochran. Thank you, Senator.
        Senator Murray.

                       STATEMENT OF SENATOR PATTY MURRAY

        Senator Murray. Thank you very much, Mr. Chairman. And
    thank you to Senator Byrd and all of our colleagues for their
    comments today. I welcome you, as well, Mr. Secretary, and
    appreciate the tremendous job you are doing for our country.
    And I especially want to echo the comments of Senator Mikulski
    and thank you and everyone in your department for all of the
    work you do tediously every day to protect all of us. We all do
    appreciate it.

                                 PORT SECURITY

        I agree with my colleagues. A lot has been done in the area
    of airport security. All of us know tremendous changes have
    been made. Where I continue to have a tremendous concern is in
    the area of port security. And I know you joined the President
    last week in Senator Hollings's backyard at the Port of
    Charleston. And the White House issued a press release and
    described the event as the President focusing on seaport and
    cargo security. But I noticed that only a couple of minutes of
    his speech actually talked to that. And I think that kind of
    rhetoric without the backup is deeply concerning to me and to
    everyone, really, in this country.
        We saw last week that a small bit of ricin shut down three
    buildings here on this campus for an entire week. A container
    coming into one of our terminals with an explosive device or
    any kind of biological agent could have a devastating effect
    obviously on human life, but a huge impact on the economy, if
    any of our ports or all of our ports were to shut down for any
    amount of time.

                            OPERATION SAFE COMMERCE

        And I think you know what I am concerned about is that the
    backup is not there for the words and the rhetoric that the
    administration is focused on port security. I noticed in the
    President's budget request that a very promising security
    initiative, called the Operation Safe Commerce is killed in the
    President's budget. That is a program that is just beginning.
    And the first cargo ship actually with that in place is coming
    into my home State in Tacoma in just a couple weeks. And I
    think it is just not a good way to go, to kill that before it
    has even gotten started.

                          MARITIME TRANSPORTATION ACT

        Another example is the President's budget director last
    week on the Budget Committee told me that the White House is
    committed to implementing the Maritime Transportation Act, the
    law that ensures that all of our ports and all the vessels
    calling on them have approved security plans. Mr. Bolton said
    the President was committed to implementing that, but his
    budget only provides 7 percent of the funding that the Coast
    Guard testified to us they would need to implement that.

                                  COAST GUARD

        And the third example is that the administration is adding
    new homeland security duties to the Coast Guard's mission
    without providing them the support necessary to accomplish
    those tasks, as well as to deal with its traditional missions
    that are so critical. We all know the Coast Guard is stretched
    thin. They are working long hours. They are a dedicated group
    of people. But I think we need to back up what we are asking
    them to do in terms of homeland security duties and provide
    them with the funds. So I will be asking you about that today.

                             CUTS IN GRANT FUNDING

        I share with my colleagues the concern about first
    responder grants that are being cut. And I want to mention as
    well the emergency management planning grants that go out to
    communities are being cut and restricted. If our communities
    cannot plan for a disaster, they will not know what to do if
    something occurs. And I think it is really important that we
    maintain our focus and our funds in that direction.
        So those are some of the issues that I will raise in the
    question and answer period. But again, Mr. Secretary, thank you
    for the job you do for our country.
        Senator Cochran. Thank you, Senator.
        [The statement follows:]

                   Prepared Statement of Senator Patty Murray

        I want to join you, Senator Byrd, and the rest of our colleagues in
    welcoming Secretary Ridge today. He has been handed a tough task in a
    very difficult time. I know he is committed to keeping our country
    safe, and I thank him for his leadership.
        Mr. Secretary, I want to work with you to ensure our budget will
    actually deliver the security we both seek for our country.
        Just last week, you joined President Bush at an event in Senator
    Hollings' backyard at the Port of Charleston.
        A White House press release described the event this way--quote--
    ``President Bush Focuses on Seaport and Cargo Security.'' He stood in
    front of a Coast Guard cutter and a container barge, yet he only
    focused on port security for about two minutes of his 30 minute speech.
        Sadly that seems par-for-the-course for this White House.
        The President offers a few words about port security here and
    there, but does not make the financial commitment we need to actually
    keep our ports safe.
        And, the latest example came just last week with the President's
    budget request.
        The President wants to kill a promising port security initiative
    called Operation Safe Commerce.
        Mr. Secretary, as you know, our largest ports have been working to
    improve cargo security through Operation Safe Commerce for the past 2
    years. In fact, the first cargo ship using this innovative program will
    arrive at the Port of Tacoma later this month, setting a new standard
    for port security. The President's budget would end Operation Safe
    Commerce.
        That's just one disappointing example in this budget.
        Here is another example: Last week the President's budget director
    told me the White House is committed to implementing the Marine
    Transportation Act. That's the law which will ensure all of our ports--
    and the vessels calling on them--have approved security plans.
        Mr. Bolton said the President was committed to implementing MTSA,
    but his budget only provides 7 percent of the funding the Coast Guard
    says is required.
        And, here's a third example, the Administration is adding new
    Homeland Security duties to the Coast Guard's mission without providing
    the support necessary to accomplish these new tasks as well as its
    traditional mission.
        Mr. Secretary, we all agree that the Coast Guard is doing an
    admirable job balancing its many missions. However, the Coast Guard is
    stretched thin, and this budget stretches it further.
        These brave men and women are working longer hours and doing more,
    but the President's budget offers no relief.
        It's one thing to give a speech in front of our Coast Guard assets
    and quite another to actually provide the men and women of the Coast
    Guard with the tools they need to do the job.
        Words won't help protect our Nation's seaports, but--
      --Operation Safe Commerce,
      --adequate support for the Coast Guard,
      --and funding for marine security plans will make our ports safer.
        And that is my focus today.
        I do have other concerns with this budget beyond port security, for
    example:
        I am concerned that first responder grants would be cut by more
    than $800 million.
        I am also concerned that Emergency Management Planning Grants would
    be cut and restricted, putting our emergency management and response
    system in jeopardy.
        These are some of the issues I hope to explore with the Secretary
    this morning.
        Thank you Mr. Chairman.

               INVITATION TO SECRETARY RIDGE TO MAKE A STATEMENT

        Mr. Secretary, we have a copy of the statement you
    prepared. It will be made a part of the record. We invite you
    to make any additional statement you think would be helpful to
    our understanding of the budget request. You may proceed.
        Secretary Ridge. Senator, if I might just highlight some of
    the points for my opening address and summarize it briefly.
        Senator Cochran. That will be fine.

                        STATEMENT OF SECRETARY TOM RIDGE

        Secretary Ridge. Thank you.
        Mr. Chairman, Senator Byrd, members of the subcommittee, I
    am certainly grateful for the opportunity to appear before you
    today and present the President's budget and priorities for the
    Department of Homeland Security in the coming year.
        With the creation of the Department of Homeland Security,
    that charge was given to us, 22 different agencies and nearly
    180,000 employees, brought together to pursue a single mission.
    The recent ricin scare serves as a very difficult and poignant
    and relevant reminder that terrorism is a threat that we must
    confront each and every day with the same commitment and the
    same sense of urgency we all remember from the day our Nation
    was attacked 2 years ago.
        As we prepare to celebrate the first year of the
    department, it is important to remind the public that it has
    been with the steadfast support of this Congress and the
    resources you have provided that have made it possible for the
    department to not only carry out a vigorous and ambitious slate
    of security initiatives, but also to say to Americans with
    confidence today that we are indeed safer.

        ACCOMPLISHMENTS ACHIEVED BY THE DEPARTMENT OF HOMELAND SECURITY

        We have strengthened airline security, increased vigilance
    at our borders and ports, forged unprecedented partnerships
    across the private sector and with State and local government,
    improved information sharing, launched robust efforts to engage
    citizens in preparedness efforts, and distributed funds and
    resources for our dedicated first responders.

                        FISCAL YEAR 2005 BUDGET REQUEST

        To highlight an observation made by Senator Byrd, his
    analysis of the budget is correct. If you include the entire
    BioShield amount within the $40.2 billion, it is a 10-percent
    increase. If you add the nondiscretionary money and some of the
    fee increases we request, it is about a 6-percent increase. And
    then just with the discretionary money appropriated by
    Congress, it is about a 4.4-percent increase. We believe the
    increase in funding will provide the necessary resources we
    need to expand and improve existing projects and programs, as
    well as build new barriers to terrorists who wish to do us
    harm.

                               prepared statement

        I think the balance of my testimony highlights the areas
    that we have sought an increase, Mr. Chairman. But since you
    have the testimony as part of the record, I assume some or all
    of it has been digested. I think it would probably be even more
    useful for all of us just to engage in the kind of
    conversation, the question and answer that has been so fruitful
    in the past. If my entire statement is included as part of the
    record, I would conclude by again thanking my colleagues in
    public service for the opportunity to appear before you and
    look forward to the ensuing conversation.
        [The statement follows:]

                        Prepared Statement of Tom Ridge

                                  INTRODUCTION

        Mr. Chairman, Senator Byrd and Members of the Subcommittee: I am
    honored and pleased to appear before the Committee to present President
    Bush's fiscal year 2005 budget for the Department of Homeland Security.
    Before beginning to outline our fiscal year 2005 budget request, I want
    to thank you for the strong support you showed for the Department in
    the fiscal year 2004 budget and for the fact that that appropriation
    was passed in time for it to be signed by the President on October 1,
    2003--the first day of the fiscal year.
        The $40.2 billion request represents a ten percent increase in
    resources available to the Department over the comparable fiscal year
    2004 budget and reflects the Administration's strong and continued
    commitment to the security of our homeland. The fiscal year 2005 budget
    is a $3.6 billion increase over fiscal year 2004, and it includes
    increased funding for new and expanded programs in border and port
    security, transportation security, immigration enforcement and
    services, biodefense, incident preparedness and response, and the
    implementation of a new human resources system that will reward
    outstanding performance. The budget also continues our momentum toward
    integrating intelligence, operations and systems in a way that
    increases our Nation's security.
        The Department of Homeland Security has made great organizational
    strides during the first year of operations. Nearly 180,000 employees
    and a budget of $31.2 billion were brought under DHS less than a year
    ago. The Department established a headquarters operation and
    successfully began operations on March 1, 2003--bringing together the
    legacy agencies and programs that now make up DHS. Customs, border and
    immigration activities have been reformulated into new agencies that
    will increase the effectiveness of our dedicated employees. DHS
    continues to create new ways to share information and intelligence
    within the Department and between levels of governments, and
    horizontally across agencies and jurisdictions. Already, over 350
    different management processes have been consolidated to 130, and DHS
    has begun consolidating 2,500 support contracts into roughly 600.
        While DHS invested considerable time to make the many
    organizational improvements that will improve our effectiveness, much
    was also accomplished programmatically. The fiscal year 2003
    Performance and Accountability Report provides a comprehensive
    discussion of our accomplishments of the past year. We believe that in
    the twelve months since the creation of the Department, we have made
    substantial progress. Through the hard work of our dedicated and
    talented employees, America is more secure and better prepared than we
    were one year ago.
        We have achieved many results since our creation, including:
      --improving the collection, analysis and sharing of critical
            intelligence with key Federal, State and local entities;
      --allocating or awarding over $8 billion to state and local first
            responders to help them prevent and prepare to respond to acts
            of terrorism and other potential disasters;
      --strengthening border security through the ``One face at the
            border'' initiative, which will cross-train officers to perform
            three formerly separate inspections--immigration, customs and
            agriculture. This will allow us to target our resources toward
            higher risk travelers;
      --instituting innovative new systems like US VISIT to identify and
            track foreign visitors and students and to screen for possible
            terrorist or criminal involvement;
      --safeguarding air travel from the terrorist threat by hardening
            cockpit doors, instituting 100 percent checked baggage
            screening; and training more than 50,000 Federal passenger and
            baggage screeners;
      --increasing safeguards on maritime transportation and port
            infrastructure;
      --expanding research and development in the defense of our homeland,
            through the creation of programs such as the Homeland Security
            Advanced Research Projects Agency (HSARPA) which has already
            engaged hundreds of private companies and universities in
            developing new cutting-edge technologies;
      --launching an ambitious, collaborative effort involving input from
            employees at all levels, unions, academia, and outside experts
            to design a modern human resources system that is mission-
            centered, fair, effective and flexible;
      --initiating a five-year budget and planning process and commencing
            the development of an integrated business and financial
            management system (Project eMerge2) to consolidate
            the 50 different budget execution systems, 43 different general
            ledgers, and 30 different procurement systems inherited by DHS;
            and
      --successfully transferring more than $50 billion in assets, $36
            billion in liabilities and more than 180,000 employees to the
            Department.

                        FISCAL YEAR 2005 BUDGET REQUEST

        The fiscal year 2005 budget for the Department of Homeland Security
    builds upon the significant investments to date to our safeguard
    against terrorism, while also sustaining the many important
    departmental activities not directly related to our fight against
    terrorism. The President's budget clearly demonstrates the continuing
    priority placed on the Department of Homeland Security in providing
    total resources for fiscal year 2005 of $40.2 billion. This is an
    increase of 10 percent above the comparable fiscal year 2004 resource
    level, $9 billion (29 percent) over the 2003 level and $20.4 billion
    (103 percent) over the 2001 level.

                     STRENGTHENING BORDER AND PORT SECURITY

        Securing our border and transportation systems continues to be an
    enormous challenge. Ports-of-entry into the United States stretch
    across 7,500 miles of land border between the United States and Mexico
    and Canada, 95,000 miles of shoreline and navigable rivers, and an
    exclusive economic zone of 3.4 million square miles. Each year more
    than 500 million people, 130 million motor vehicles, 2.5 million
    railcars, and 5.7 million cargo containers must be processed at the
    border. Conditions and venues vary considerably, from air and sea
    ports-of-entry in metropolitan New York City with dozens of employees
    to a two-person land entry point in North Dakota.
        During fiscal year 2005, we will continue to strengthen our border
    and port security. Our budget seeks over $400 million in new funding to
    maintain and enhance border and port security activities, including the
    expansion of pre-screening cargo containers in high-risk areas and the
    detection of individuals attempting to illegally enter the United
    States. Our budget also includes an 8 percent increase for the Coast
    Guard to upgrade port security efforts, implement the Maritime
    Transportation Security Act, and enhance other activities.
        Specifically, our budget includes an increase of $25 million for
    U.S. Customs and Border Protection's Container Security Initiative
    (CSI) which focuses on pre-screening cargo before it reaches our
    shores. We are also seeking an increase of $15.2 million for Customs
    Trade Partnership Against Terrorism (C-TPAT). C-TPAT focuses on
    partnerships all along the entire supply chain, from the factory floor,
    to foreign vendors, to land borders and seaports. To date, nearly 3,000
    importers, 600 carriers, and 1,000 brokers and freight forwarders are
    participating in C-TPAT, surpassing the Department's original goal of
    participation of the top 1,000 importers. In order to further protect
    the homeland against radiological threats, the budget seeks $50 million
    for next generation radiation detection monitors.
        As well as continuing development for secure trade programs, the
    President's budget also seeks an increase of $20.6 million to support
    improvements for the National Targeting Center and multiple targeting
    systems that focus on people and/or goods. These systems use
    information from diverse sources to provide automated risk assessments
    for arriving international air passengers, shipments of goods to our
    country, and land border passenger traffic.
        The United States Visitor and Immigrant Status Indicator Technology
    (US VISIT) program's goals are to enhance the security of our citizens
    and our visitors; facilitate legitimate travel and trade across our
    borders; ensure the integrity of our immigration system; and respect
    the privacy of our welcomed visitors. US VISIT represents a major
    milestone in our efforts to reform our borders. DHS deployed the first
    increment of US VISIT on time, on budget, and has met the mandates
    established by Congress as well as including biometrics ahead of
    schedule. The budget seeks a total of $340 million in fiscal year 2005,
    an increase of $12 million over the fiscal year 2004 level. Through
    fiscal year 2005, over $1 billion will be used to support this
    initiative.
        Our budget also seeks an increase of $64.2 million to enhance land-
    based detection and monitoring of movement between the ports, and $10
    million to plan, procure, deploy and operate unmanned aerial vehicles.
    In addition, the budget request for U.S. Immigration and Customs
    Enforcement (ICE) includes an increase of $28 million to increase the
    flight hours of P-3 aircraft. The P-3 has already proven itself to be a
    key asset in the battle against terrorism as demonstrated in the days
    immediately following the September 11, 2001 attacks when P-3s flew
    airspace security missions over Atlanta and Miami.
        The Coast Guard funding increase includes over $100 million to
    implement the Maritime Transportation Security Act, to support the
    Coast Guard's ability to develop, review and approve vessel and port
    security plans, ensure that foreign vessels meet security standards,
    improve underwater detection capabilities, and increase intelligence
    capacity. The budget also maintains the Coast Guard's ongoing
    Integrated Deepwater System initiative, funding the program at $678
    million, an increase of $10 million over the fiscal year 2004 funding
    level.

                              ENHANCING BIODEFENSE

        The President's fiscal year 2005 budget reflects $2.5 billion for
    Project BioShield that will be available in fiscal year 2005 to
    encourage the development and pre-purchase of necessary medical
    countermeasures against weapons of mass destruction. Project BioShield
    allows the Federal Government to pre-purchase critically needed
    vaccines and medications for biodefense as soon as experts agree that
    they are safe and effective enough to be added to the Strategic
    National Stockpile. The Administration is moving forward in purchasing
    the most important countermeasures and high on the list are next-
    generation vaccines for both smallpox and anthrax.
        The Department's efforts to improve biosurveillance will involve
    the Information Analysis and Infrastructure Protection (IAIP) and
    Science and Technology (S&T) directorates. In S&T, the budget requests
    $65 million increase to enhance current environmental monitoring
    activities, bringing the total fiscal year 2005 investment in this area
    to $118 million. One key component of this initiative will be an
    expansion and deployment of the next generation of technologies related
    to the BioWatch Program, a biosurveillance warning system. In IAIP, $11
    million increase is included to integrate, in real-time,
    biosurveillance data collected from sensors throughout the country and
    fuse this data with information from health and agricultural
    surveillance and other terrorist-threat information from the law
    enforcement and intelligence communities.
        The National Disaster Medical System (NDMS) is responsible for
    managing and coordinating the Federal medical response to major
    emergencies and federally declared disasters. For 2005, FEMA's budget
    includes $20 million for planning and exercises associated with medical
    surge capabilities. In addition, the budget transfers funding ($400
    million) for the Strategic National Stockpile to the Department of
    Health and Human Services to better align the program with that
    agency's medical expertise.

                          IMPROVING AVIATION SECURITY

        We have made great strides to improve the safety of the aviation
    system from acts of terrorism. For example, we have made significant
    investments in baggage screening technology--over $2 billion to
    purchase and install Explosive Detection System machines (EDS) and
    Explosive Trace Detection machines (ETD) to the Nation's airports from
    fiscal year 2003 to fiscal year 2005; hardened cockpit doors; deployed
    45,000 Federal passenger and baggage screeners at the Nation's
    airports; and trained pilots to be Federal Flight Deck Officers. The
    President's fiscal year 2005 budget seeks to enhance our efforts in
    this regard and would provide an increase of $892 million, a 20 percent
    increase over the comparable fiscal year 2004 level, for the
    Transportation Security Administration (TSA). Additional funding for
    TSA supports aviation security, including efforts to maintain and
    improve screener performance through the deployment of technology.
        The Department implemented a substantially improved air cargo
    security and screening program last year, and the President's budget
    sustains funding to continue program deployment and screening
    technology research. In addition, the fiscal year 2005 budget seeks a
    total of $61 million to accelerate development of more effective
    technologies to counter the threat of portable anti-aircraft missiles.

                 ENHANCING IMMIGRATION SECURITY AND ENFORCEMENT

        Comprehensive immigration security and enforcement extends beyond
    efforts at and between the ports-of-entry into the United States. It
    extends overseas, to keep unwelcome persons from reaching our ports,
    and to removing persons now illegally residing in the United States.
    The Administration is committed to stronger workplace enforcement in
    support of the President's temporary worker proposal announced January
    7, 2004.
        The requested increases include $186 million for U.S. Immigration
    and Customs Enforcement (ICE)--whose appropriated budget overall
    increases by about 10 percent--to fund improvements in immigration
    enforcement both domestically and overseas, including more than
    doubling of current worksite enforcement efforts and approximately $100
    million increase for the detention and removal of illegal aliens.
    Detention and Removal of illegal aliens present in the United States is
    critical to the enforcement of our immigration laws and the requested
    funding will expand ongoing fugitive apprehension efforts, the removal
    from the United States of jailed illegal aliens, and additional
    detention and removal capacity.
        Our proposal for ICE also includes an increase $78 million for
    immigration enforcement. As part of the President's proposed new
    temporary worker program to match willing foreign workers with willing
    U.S. employers, enforcement of immigration laws against companies that
    break the law and hire illegal workers will increase. The fiscal year
    2005 President's Budget includes an additional $23 million for enhanced
    worksite enforcement. This more than doubles existing funds devoted to
    worksite enforcement and allows ICE to hire more Special Agents devoted
    to this effort. With these resources, ICE will be able to facilitate
    the implementation of the President's temporary worker program
    initiative by establishing a traditional worksite enforcement program
    that offers credible deterrence to the hiring of unauthorized workers.
    Without such a deterrent, employers will have no incentive to maintain
    a legal workforce.
        Our budget also seeks $14 million to support our international
    enforcement efforts related to immigration, including enabling ICE to
    provide visa security by working cooperatively with U.S. consular
    offices to review visa applications.
        We are a welcoming Nation, and the hard work and strength of our
    immigrants have made our Nation prosperous. Within the Department, the
    U.S. Citizenship and Immigration Service (CIS) has improved the
    administration of immigration benefits to the more than seven million
    annual applicants. For fiscal year 2005, the President's budget seeks
    an additional $60 million, for a total of $140 million, to achieve a
    six-month processing for all immigration applications by 2006, while
    maintaining security.

                INCREASING PREPAREDNESS AND RESPONSE CAPABILITY

        Though the primary mission is to protect the Nation from terrorism,
    the Department's responsibilities are diverse. The ships that interdict
    threats to our homeland are also used to help mariners when they are in
    distress and protect our marine resources from polluters and illegal
    fishing. While we must be prepared to respond to terrorist attacks, we
    are more often called upon to respond to natural disasters
        To support the Department's efforts to respond, the President's
    Budget includes an increase of $10 million, for a total of $35 million
    in fiscal year 2005, for the Homeland Security Operations Center
    (HSOC). Pursuant to the Initial National Response Plan, the HSOC
    integrates and provides overall steady state threat monitoring and
    situational awareness and domestic incident management on a 24/7 basis.
    The HSOC maintains and provides situational awareness on homeland
    security matters for the Secretary of Homeland Security, the White
    House Homeland Security Council and the Federal community. In addition,
    the HSOC provides the Department's critical interface to all Federal,
    State, local & private sector entities to deter, detect, respond and
    recover from threats and incidents.
        The National Incident Management System (NIMS) is designed to
    ensure that all levels of government work more efficiently and
    effectively together to prepare for, respond to, and recover from
    domestic emergencies and disasters, regardless of cause. For fiscal
    year 2005, the Department requests $7 million to ensure that the major
    NIMS concepts involving incident command, coordination, communication,
    information management, resource management, etc., are incorporated
    into and reflected in FEMA's national disaster operational capability.
    This funding will provide for plan development, training, exercises and
    resource typing at the Federal, State, and local levels

                  SUPPORTING STATE AND LOCAL FIRST RESPONDERS

        The Department has initiated consolidation of the two principal
    offices responsible for administering the grants awarding process for
    emergency responders and State/local coordination, the Office of State
    and Local Government Coordination and the Office of Domestic
    Preparedness. This consolidation provides an opportunity to tie all DHS
    terrorism preparedness programs together into a cohesive overall
    national preparedness program designed to support implementation of
    State Homeland Security Strategies.
        The fiscal year 2005 budget continues to support the Nation's first
    responders and seeks a total of $3.6 billion to support first-responder
    terrorism preparedness grants with better targeting to high-threat
    areas facing the greatest risk and vulnerability. For fiscal year 2005,
    funding for the Urban Area Security Initiative (UASI) doubles from $727
    million to $1.45 billion. Since March 1, 2003, DHS awarded or allotted
    over $8 billion to support state and local preparedness. Between fiscal
    year 2001 and the fiscal year 2005 budget request, over $14 billion in
    assistance will be made available for programs now under DHS. Our
    request for fiscal year 2005 is slightly higher than funding sought for
    these programs in fiscal year 2004.

      INVESTING IN HUMAN CAPITAL AND BUILDING DEPARTMENTAL INFRASTRUCTURE

        Our employees are our single greatest asset and we are committed to
    investing in the development and motivation of our workforce. To
    support our efforts in creating a model personnel system, the
    President's fiscal year 2005 budget seeks $133.5 million for the
    implementation of a new DHS human resources system that is mission-
    centered, fair, and flexible by rewarding top performers. The fiscal
    year 2005 budget specifically provides additional resources that will
    be used for training supervisory personnel to administer a performance-
    based pay system and to create the information technology framework for
    the new system. Our new system will ensure that DHS can manage and
    deploy its resources to best address homeland security threats and
    support information technology tools for workforce management.
        We also seek additional funds to invest in the Department's core
    infrastructure. Our budget request seeks a total of $56 million, an
    increase of $17 million to support a new resource management system.
    This funding will support the design, development, and implementation
    for a single Department-wide financial management system. It will
    provide decision-makers with critical business information, e.g.,
    budget, accounting, procurement, grants, assets, travel, in near
    ``real-time'' and eliminate stovepipes within existing systems and
    processes.
        An increase of $45.1 million is also sought to continue expanding
    the DHS presence at the Nebraska Avenue Complex (NAC). These resources
    will enable DHS to perform tenant improvements to the facility and
    relocate U.S. Navy operations, pursuant to congressional authorization,
    from the NAC to leased facilities.

                                   CONCLUSION

        We have a dedicated and skilled team in DHS who understand that
    what they are doing is important. We have the support of our partners
    in government and the public and private sectors. I thank the Congress
    for its support, which has been critical to bringing us to this point.
        Our homeland is safer than it was a year ago, but we live in
    dangerous times and cannot count on times to change. That is why the
    Department of Homeland Security was created, and why we are moving
    forward. I am grateful to be here today to talk about the work we are
    doing to make America a safer home for us, for our children and
    generations to come.
        Thank you for inviting me to appear before me today, and I look
    forward to answering your questions.

                     STATUS OF RICIN INCIDENT INVESTIGATION

        Senator Cochran. Mr. Secretary, thank you very much. I
    think one of the most recent events that has attracted
    everybody's attention here in Washington and certainly affected
    this very building we are having the hearing in today is the
    ricin incident that was discovered in the office of Senator
    Bill Frist here in the Dirksen Building. Could you tell us what
    the status of that investigation is? Has it been determined
    whether this toxin was delivered by mail or in what way this
    happened, or are we still trying to determine these events?
        Secretary Ridge. Senator, it is my understanding that the
    focal point of the investigation initially has been with the
    Capitol Police. The FBI has and is prepared to continue to
    assist. I do not believe there are any further developments
    beyond what has been transmitted in the newspapers. We still
    have no idea who may have been responsible for it. To my
    knowledge, to date we have not identified if it was a letter
    that was in which the contents were contained that broke open
    during the screening process. So again, it is an ongoing
    investigation. And I think your Capitol police have the lead.
        As it was related to me, I am not sure there is enough of
    the ricin that has been preserved for more detailed analysis.
    And that will probably impede the investigation somewhat. But
    even if it is true, obviously the resources of the FBI, the
    Capitol Police, and others are committed to trying the very
    best to identify the source.

                       INTERNATIONAL FLIGHT CANCELLATIONS

        Senator Cochran. One other recent event that Senator
    Mikulski mentioned was during the holiday season; there were
    several international flights that were canceled. Suspicion of
    possible terrorist activity was reported in the news as the
    reason for that. We heard from some airline executives and
    ambassadors from foreign countries how cancellation of flights
    like this caused disruption of service and make it difficult
    for the traveling public to make plans in the future. But, we
    understand the overriding importance of trying to guarantee the
    safety of our homeland.
        Do you think the department was justified in the
    cancellation of these flights and whether this indicates that
    we are under continued threats of terrorist activity in the use
    of intercontinental flights in the future?
        Secretary Ridge. Senator, the decisions to cancel those
    flights were obviously made in consultation with our allies in
    Great Britain and in France and in Mexico. Obviously, we note
    from the very outset the extraordinary inconvenience it causes
    probably a couple thousand passengers. We understand that.
        Trying to put it in context, I dare say that this week in
    international aviation there will probably be more
    cancellations for mechanical failure and for weather than were
    seen when we canceled it for potential terrorist activity. So
    we do try to put it in context but clearly with the
    understanding that we need to try to keep commercial aviation
    both safe and flying.

                 FEDERAL AIR MARSHALS ON INTERNATIONAL FLIGHTS

        A couple of concerns that were expressed to you by the
    ambassadors had to do with the executive amendments that I
    directed to be sent out specifically to the airlines with
    regard to the ability upon request to put Federal air marshals
    on those international flights. While I do not regret the
    decision to send that directive out, it would have been more
    appropriate had there been more time to send the notification
    out through diplomatic channels first, rather than dealing
    directly with the airlines. So I understand that completely.
        Since that time, however, our discussions with, again, Air
    France, Great Britain, British Airways, and others, we are
    working on a protocol, one that will give us an opportunity to
    deal government to government first. We all agree that is the
    best way to do it, to share intelligence about these flights
    and review that as far enough in advance as we possibly can to
    avoid either delays or the cancellations in the future. But
    given the threat stream reporting that we saw, it was a
    collective judgment that, under all the circumstances as we
    knew them, it was a collective decision to cancel those
    flights. And I think it was a very appropriate decision.

                               AVIATION SECURITY

        A continuing concern we have, Senator, with regard to
    aviation security is reflected in the threat streams where
    there are continuing references from multiple sources, in spite
    of the additional security measures we have taken on domestic
    and international flights, that terrorists would still seek to
    target those flights for possible terrorist actions. So we are
    mindful that they do like to go back to targets and tactics
    that they used previously. That is why our guard remains up and
    remains vigilant.

                      TERRORIST THREAT INTEGRATION CENTER

        Senator Cochran. I am going to ask one other question and
    hope that all Senators will be aware that we will have ample
    opportunity to ask whatever questions any senator has. But, I
    am going to limit my time to 5 minutes and hope other Senators
    will do that as well in the first round of questions, and then
    we can go back and revisit any issues that remain important to
    discuss.
        Let me ask you one final question in this round, and that
    is your evaluation of the effectiveness of the intelligence-
    gathering center that was created in the Department of Homeland
    Security to integrate and bring together intelligence that is
    available to the department to assess the threat status that we
    may face, the potential terrorist attacks that may be planned
    by others. It is the Terrorist Threat Integration Center
    (TTIC). What is your evaluation of that? Is it working? Do you
    have the funding that you need, if this budget request is
    followed, to carry out the intelligence role that the
    department has established for itself?
        Secretary Ridge. Senator, the Congress has been very
    generous to the Department in providing several hundred million
    dollars to set up the Information Analysis and Infrastructure
    Protection Directorate. That is our analytical arm. And it is
    through those dollars that we expanded probably $15 million or
    $20 million last year as our contribution to the Terrorist
    Threat Integration Center. We have analysts in that Threat
    Integration Center. It is the coordination point for
    information from the entire intelligence community as it
    relates to homeland security issues.
        We are very comfortable with the relationship. Congress has
    vested in us the authority and the responsibility to go back to
    anywhere we deem necessary within the intelligence community to
    put intelligence requirements on the CIA or TTIC to give us
    more additional information, if we have questions and seek
    answers.
        So as the TTIC evolves and as our agency matures, the
    relationship gets better and better every day.
        Senator Cochran. Thank you.
        Senator Byrd.

                UNDERFUNDED AND UNDERSTAFFED IMMIGRATION SYSTEM

        Senator Byrd. Mr. Chairman, Mr. Secretary, our immigration
    system is underfunded and understaffed. The Bureau of
    Immigration and Customs Enforcement has just over 13,000
    criminal investigators to, among its many other
    responsibilities, locate and remove 8 million to 12 million
    illegal aliens. Following the passage of the 1986 amnesty for
    2.7 million illegal aliens, the INS had to open temporary
    offices, hire new workers, and divert resources from
    enforcement areas to process amnesty applicants. The result was
    chaos that produced rampant fraud.

                     IMPACT OF PRESIDENT'S AMNESTY PROPOSAL

        The backlog of immigrant applications is even larger today,
    six million and rising. The President's amnesty proposal would
    dump another eight million immigrant applications on an already
    beleaguered immigration system.
        It took only 19 temporary visa holders to slip through the
    system to unleash the horror of the September 11 attacks. The
    President's amnesty would shove 8 million illegal aliens
    through our security system, many of whom have never gone
    through any background check. If there are no new resources in
    the budget to implement the President's amnesty proposal, the
    implementation of the reform proposal would create incredible
    stresses on an already overly stressed border security system.
    It is a recipe for disaster.
        While I note that the budget has several modest proposals
    to deal with existing shortcomings, could you explain to the
    committee how much additional money is included in the
    President's budget to implement the President's amnesty
    proposal?
        Secretary Ridge. Senator, there are, as you pointed out,
    increases in several areas within the budget, not specifically
    related to the President's proposal, inasmuch as the President
    laid out some principles, recognizing the reality of several
    million undocumented aliens who present in this country,
    recognizing that we need to validate their presence, which is
    far different than pushing them to the front of the line for
    citizenship purposes, and also recognizing the need that once
    he stated the principles, that this is an issue of high
    visibility and probably considerable controversy. And whether
    we can get it done this year or next year remains to be seen.
        But I think the President offered the proposal,
    understanding that once the Congress worked its will around the
    principles that he enunciated, that there would be adequate
    resources, depending on the kind of program that Congress
    enacted to enforce it. Senator, I could not agree with you
    more. Our ability to take the President's proposal and to
    fashion a satisfactory conclusion will require an investment of
    resources for enforcement. That number, that amount remains to
    be calculated based on the kind of program that the Congress,
    working with the administration, designs.
        I will tell you in the meantime, Senator, the increases
    that are reflected in this budget are for detention beds, are
    for more surveillance equipment along the borders. We are going
    to use in pilot form this year, Senator, some additional
    technology along the borders to deal with, as best we can, the
    continued flow of illegal immigrants across the border. But I
    think the broader issue of the resources necessary to make sure
    that the President's initiative and the congressional
    initiative is fully enforced. That is a discussion to be had at
    a later date.
        Senator Byrd. To be had when?
        Secretary Ridge. At a later date, Senator.

                           LEGACY INS PROGRAM FUNDING

        Senator Byrd. Yes. Well, I understand that. The increases
    for a number of the programs in the budget are directed to
    ongoing and long underfunded legacy INS activities, and not to
    the President's new initiative. I recognize that there are
    increases in your budget for fugitive operations and the
    institutional removal program, legal program backlog
    elimination. But these increases merely reflect the direction
    of much-needed additional dollars to perform the tasks that
    your agencies must do in any event.
        For instance, from 1992 to 2002, the number of worksite
    enforcement investigations dropped from 1,063 to just 13. These
    activities represent ongoing programs which your department
    inherited upon the abolition of the long-maligned Immigration
    and Naturalization Service. What new resources are you
    requesting specifically, understanding that the Congress has
    yet to act, of course, if it does, when it does? What new
    resources are you requesting that specifically will be used to
    implement an alien amnesty program in the event that such is
    legislated into law?

                     REQUEST FOR FUGITIVE OPERATIONS TEAMS

        Secretary Ridge. Senator, there are two areas of increase
    that we requested to help with contemporary enforcement of the
    law as it exists today. It does not speak to any changes in the
    law that may exist tomorrow. But we have requested an increase
    of $50 million for 30 additional fugitive operations teams so
    that the people we have identified as absconders, those
    individuals who have either had their hearing and have been
    determined after the hearing process basically to be persona
    non grata, to exit this country, or those who refuse to show
    for their hearing and therefore lost any legitimacy to their
    presence. We want to basically nearly triple the amount of
    those teams. So there is $50 million for that.

                        REQUEST FOR WORKSITE ENFORCEMENT

        I believe, Senator, we have asked for an additional $20-
    some million to assist with more agents to deal with workforce
    enforcement. So the additional dollars for the detention beds,
    for the fugitive operations team, and for the workplace
    enforcement are consistent with the needs based on the law as
    it exists. But as I said before, clearly, once Congress works
    its will, if it chooses to do so, around the President's
    initiatives, matching willing worker with willing employer,
    will obviously need additional resources. That cannot be
    denied.

        RESOURCES REQUIRED TO IMPLEMENT THE PRESIDENT'S AMNESTY PROGRAM

        Senator Byrd. Well, looking at the plan that has been
    proposed by the President, Mr. Secretary, how much do you
    believe would be necessary to implement the President's
    principles, as set forth in that plan?
        Secretary Ridge. Senator, at this point, it would be the
    grossest form of speculation. And I choose not to engage--the
    Senator has asked a serious question. He deserves a serious
    answer. And at this juncture, since the President has just
    articulated some principles that he would like to see embodied
    in a piece of legislation, again, it really depends on the
    legislation and the mandates associated with the legislation
    for us to determine how many additional agents we might need,
    perhaps the use of additional technology along the borders. So
    it is very difficult for us to make that determination at this
    point, Senator.
        Senator Byrd. Are you suggesting, Mr. Secretary----
        Secretary Ridge. Well, the only thing I could tell you,
    Senator, is we will need more.
        Senator Byrd. I would expect that answer. Are you
    suggesting that there are no estimates around what the
    President's plan would cost?
        Secretary Ridge. I suggest to you, Senator, that we can in
    time develop some internal estimates, but we have no final
    figures now, again, because we do not know what mandates or the
    requirements that Congress may impose on the Executive Branch
    in order to fulfill the goals of the legislation.
        Senator Byrd. Thank you, Mr. Chairman. I will pursue this a
    bit further.
        Senator Cochran. Thank you, Senator.
        Senator Gregg.
        Senator Gregg. Thank you, Mr. Chairman.
        Governor, I call you Governor----
        Secretary Ridge. Good.
        Senator Gregg [continuing]. Because as a former Governor,
    we all recognize that is the most significant position.
        Secretary Ridge. I have a response, Governor.

                                    AL QAEDA

        Senator Gregg. On 9/11 we were attacked, obviously. And the
    attack was generated by the Islamic fundamentalist movement,
    which is called al Qaeda, which has a lot of different forms
    that it has mutated into across the world. What is the number
    one threat today that your agency considers it must address in
    the area of an attack on our country? Where does it come from
    and what is it?
        Secretary Ridge. Are you talking, Senator, necessarily the
    individuals or the type of attack?
        Senator Gregg. First the individuals.
        Secretary Ridge. Clearly al Qaeda.

             SOURCE OF MOST SIGNIFICANT THREAT TO THE UNITED STATES

        Senator Gregg. Where do you--what do you see as the source
    of the most significant threat to our country? And what do you
    see as the potential target or type of threat which they
    represent?
        Secretary Ridge. Senator, we still look at al Qaeda as the
    major international terrorist organization that we need to
    combat and to deal with. But as--I think you used the right
    word in your question. There are a lot of mutations that have
    developed. I mean, al Qaeda can be seen as, one, a very close
    group of very disciplined leaders who have had tactical control
    over and operational control of the attacks on 9/11.
        But since that time, we have obviously disrupted their
    communications. We have decapitated a lot of their leadership.
    And one of the concerns that, I think, all of us have is that
    the individual cells, many of whom have been loosely connected
    to the al Qaeda structure now, because of the decapitation,
    because of the difficulty in communication, may have a tendency
    to operate on themselves, operate on their own rather than
    having a direct control from bin Laden and that small group of
    people associated with planning that attack.
        So again, it is al Qaeda, the organization. But over the
    period of time we have identified obviously the change in its
    structure and, therefore, probably the change in the kind of
    terrorist groups that are prepared to operate even
    independently.
        The same notion of Jihad, but not quite as directly
    connected to al Qaeda. And we know they train thousands in
    Afghanistan. The extremist schools have been pumping out
    students of hatred, who look at this country as evil and vile
    and have joined different forms of the Jihadist movement.
        Senator Gregg. It is still Islamic fundamentalism.
        Secretary Ridge. Correct.

                  PRIMARY THREAT, TARGET, AND DELIVERY SYSTEMS

        Senator Gregg. And what do you see, the second question
    was, what do you see as the primary threat, target, delivery
    systems?
        Secretary Ridge. First of all, from an operational point of
    view, Senator, when it comes to research and development, we
    need to spend a great deal of time just looking at weapons of
    mass destruction, massive catastrophic effects, radiological,
    nuclear, biological, and chemical. The threat reporting stream
    that we pay attention to still on a regular basis identifies
    aviation, still talks about potential biological attacks. There
    continue to be, on a fairly consistent basis, generic
    references to just about every kind of attack imaginable under
    WMD weapons.
        And so while we have focused on aviation security that was
    the congressional focus, that is what TSA was initially focused
    on, we have also gone out now to start worrying about
    vulnerabilities that exist elsewhere that could be used as
    either a target or a mechanism to deliver any of those kinds of
    weapons.
        Senator Gregg. That being laid down as a premise--and I
    obviously think you are absolutely right, and you are the
    expert, and I think you are on track--which is the threat is
    fundamentalist Islam and the threat is the potential that they
    use a weapon of mass destruction or some mutation of that
    against us, what then becomes the priorities within your
    department as to how to respond to that?
        And should not counterintelligence be the number one event?
    Because, obviously, we cannot tolerate a weapon of mass
    destruction attack. And should not the capacity to deal with
    weapons of mass destruction be the number two? Or what is your
    prioritization of how you respond to those two items of threat,
    the people who would cause it and what it involves?
        Secretary Ridge. Well, clearly, our primary responsibility
    in dealing with the environment that you and I agree exists is
    to prevent, deter, respond, and prevent the terrorist attack.
    But the point of that spear is the military and the CIA and the
    FBI. We do have a role in preventing the attack in that when we
    get actionable information or information that is relevant to
    protecting a particular site in this country, we are obliged,
    and it is part of our mission, to take action to protect that
    site.

                  REDUCING VULNERABILITY TO TERRORIST ATTACKS

        But basically, our primary mission is to help reduce our
    vulnerability to those kinds of attacks. That is the primary
    mission of the Information Analysis Unit, because we have been
    given the charge by Congress to take whatever information we
    get that we deem credible, map it against the potential
    vulnerability, and make sure that we do everything possible to
    harden that particular target or targets to reduce the risk of
    a potential attack.
        So I think we have set priorities in our Science and
    Technology Directorate. Some of the first grants have gone out
    to deal with the technology of detection and protection. And so
    as we take a look to combat a potential biological attack, we
    are expanding again, because the Congress has given us hundreds
    of millions of dollars to conduct this research. The technology
    of detecting a bioagent, be it in a community, in a subway, in
    a form of transportation, is something that is a very, very
    high priority. The technology of protection is equally as
    important to us, because in the event we ask our first
    responders to get out and assist those who have been impacted
    by a biological event, we want them to not only know the kind
    of environment they are going into, but be protected against
    the effects of that environment.
        So we have set priorities in the science and technology
    area. We have set process of setting priorities in the critical
    infrastructure piece. We cannot, Senator, possibly expect
    that--we have to set priorities when it comes to infrastructure
    protection.
        We have targeted, for example, in chemical facilities. We
    have already conducted, I think, nearly 20 site visits of the
    largest facilities that we believe, if they were a target of a
    terrorist attack, would have the most catastrophic
    consequences, particularly in the loss of human life and
    developing standards of security and prevention that we would
    think these companies need to apply at these specific places.
    We are going to develop those standards for energy and
    telecommunication sites and the like.
        So we have set priorities within each individual unit.
    Although generically, every day we worry about different forms
    of attack from a weapon or weapons of mass destruction.
        Senator Cochran. The time of the Senator has expired.
        Senator Harkin.
        Senator Harkin. Thank you, Mr. Chairman.

        CUTS IN GRANTS TO STATES TO UPGRADE THEIR PUBLIC HEALTH SYSTEMS

        Mr. Secretary, I understand that grants to States to
    upgrade their public health systems are being cut by $105
    million in the fiscal year 2005 budget to provide funds for
    your biosurveillance initiative. Mr. Secretary, our State and
    local public health infrastructure has been allowed to
    deteriorate. These funds to upgrade our State and public health
    systems are necessary, not only to protect Americans from
    bioterrorism but also to protect Americans from natural
    outbreaks of disease, like SARS and West Nile Virus.
        In my own state, we have used these funds to increase the
    number of epidemiologists in the field and increase the number
    of scientists in our labs. With a cut in their State funding
    grant, they will have to make cuts in these important programs.
        Why has the administration chosen to cut funding for public
    health improvements when we still have a long way to go before
    our public health system is where it should be?
        Secretary Ridge. First of all, Senator, I cannot speak
    necessarily to the Health and Human Services budget. I am aware
    of a biosurveillance initiative that both Secretary Thompson
    and I are working on that is part of the President's budget
    that I believe is--while it may be viewed as simply an anti-
    terrorism initiative, it is really a public health initiative.
    And that is the biosurveillance piece that Secretary Thompson
    and I announced about a week or 10 days ago, where, through a
    combination of funds from the Department of Homeland Security
    and from Health and Human Services totaling nearly $275
    million, that we will connect multiple sources of information
    from hospitals, pharmacies, veterinary clinics, and the like to
    determine to have a national surveillance system.
        And I think public health experts would agree that the most
    important thing we can do in terms of public health is to
    identify, as early as possible, whatever bioagents are plaguing
    a community or communities. Now that is whether it is a
    terrorist has conducted a biological attack or that mother
    nature threw something at us.
        So again, I think the $275 million that is part of the
    President's budget is a very, very significant improvement in
    the country's and the public health community's ability to
    detect and therefore respond more quickly and save more lives.
    So I think it is a very significant initiative. And I really
    cannot speak to other adjustments that may have been made in
    that budget, because I do not know.
        Senator Harkin. I was just concerned about the cut in the
    funds for the public health system. It seemed like that $105
    million cut was shifted to biosurveillance. I have no problem
    with it. I agree with everything you have just said. I was just
    concerned about the cuts.
        Secretary Ridge. Senator, I am sorry. I did not mean to
    interrupt.
        Senator Harkin. That is okay.
        Secretary Ridge. Congress was very generous, I believe, in
    2002, maybe it was the supplemental, where there was, I think,
    $2.2 billion sent out to the States and locals. And it is my
    understanding that some of that money is yet to be called down.
    It is still awaiting allocation to the States or the
    communities. So again, I cannot speak to that specifically, but
    that is my understanding.

                            AGRO-TERRORISM CONCERNS

        Senator Harkin. I will take a look at that. My last
    question had to deal with what I raised in my opening
    statement. And that was about agro-terrorism, as we have called
    it here. You know, again, we have seen what has happened with
    mad cow disease. But diseases do not have to jump to humans to
    cause widespread panic. A gallon of suspicious milk would cause
    every parent in America to demand answers from the government
    immediately. It is not just a Midwestern issue. We have 10,000
    hogs that are trucked out of North Carolina every day. And as
    we know, meat slaughtered in one place might wind up all over
    America within 24 hours from one point.
        So I guess my question is: In this budget, can you assure
    us that the needs of the rural areas and farm communities will
    continue to be met? And just briefly, are you satisfied that
    you are integrating this agriculture and the possibility of
    agro-terrorism possible threats in the future, that you are
    fully integrating this into your threat assessments?
        Secretary Ridge. Well, first of all, Senator, I will assure
    you that any information that we have with regard to agro-
    terrorism where credible and corroborated, we communicate to
    the people that need to know. Secondly, I believe there is a
    rather substantial initiative in the budget for the Department
    of Agriculture that speaks to address some of the legitimate
    concerns that you have identified today.
        And thirdly, you should know that we are working on an
    interesting project that Homeland Security will fund in part
    with Iowa's governor and Homeland Security advisor, where you
    are pulling together a multiple State consortia to deal with
    the transfer of information and analysis, I guess using some of
    the labs. And I think his Homeland Security advisor has been or
    is scheduled to come in town so we could work the funding
    requirements out and collaborate our work in the Homeland
    Security with the Department of Agriculture.
        Senator Harkin. I was glad to hear you are working with the
    multi-state partnership for security and agriculture.
        Secretary Ridge. Right.
        Senator Cochran. The time of the Senator has expired.
        Senator Harkin. Thank you.
        Senator Cochran. Thank you, Senator.
        Senator Stevens.

             NEW DHS REGULATIONS SUPPLEMENTAL FUNDING REQUIREMENTS

        Senator Stevens. Thank you very much, Mr. Chairman. As I
    indicated, I would like to put a question concerning the
    national alert system and also, Mr. Secretary, or Governor, if
    you prefer, I have a copy of a letter that our Governor, former
    Senator Murkowski, wrote to you. And I would like to put it in
    the record and ask you if you have responded to that, if you
    would give me a copy of the response to his letter.
        I want to ask you a little bit more mundane question,
    though. Your bill, appropriations bill, was approved in the
    regular order. As Senator Byrd and I said, it went across the
    floor, went to conference, was signed by the President
    separately before the omnibus bill. How is your department
    doing? Are we looking forward to any kind of a supplemental
    request from your department before October 1?
        Secretary Ridge. No, sir.
        [The information follows:]

                         Letter From Frank H. Murkowski

                                       State of Alaska,
                                        Office of the Governor,
                                              Juneau, February 9, 2004.
    Hon. Tom Ridge,
    Secretary, U.S. Department of Homeland Security,
    Washington, DC.
        Dear Mr. Secretary: Alaskans have great respect for the Department
    of Homeland Security's (DHS) mission to protect the Nation against
    further terrorist attacks, guard our borders and airports, and protect
    our critical infrastructure. At the same time, DHS is also charged with
    protecting the rights of American citizens and enhancing public
    services. These sometimes conflicting obligations seem to require that
    the DHS be ever mindful of the impacts new regulations will have on the
    U.S. economy. Providing for the Nation's security while maintaining
    economic stability within our country is indeed a challenge. I don't
    envy the task.
        Please let me relate my perception of how some recent DHS actions
    have impacted Alaska as well as the Nation's security. On August 2,
    2003, the Bureau of Customs and Border Protection (CBP) published in
    the Federal Register a notification suspending the Transit-without-Visa
    (TWOV)/International-to-International (ITI) program. This suspension
    requires all international passengers transiting Alaska to obtain a
    U.S. visa for a 2-hour technical fuel stop, even at a special, secure
    transit facility. The new visa requirement caused Cathay Pacific
    Airways to move all passenger operations from Ted Stevens Anchorage
    International Airport (Anchorage) to Vancouver, British Columbia,
    Canada to avoid that burden.
        On December 22, 2003, the DHS increased the threat level to
    ``Orange'' status. The increase in threat level immediately suspended
    Progressive Clearance. The threat level was reduced to ``Yellow''
    status on January 9, 2004; however, Progressive Clearance suspension
    remained in effect until February 6, 2004. Suspension of this program
    requires Korean Air to do full clearance at the first port of entry,
    even if the ``entry'' is merely a refueling stop for almost all
    passengers. The airline must download all of the bags, forcing the
    passengers who would otherwise never leave the secure transit facility,
    to instead leave that area and proceed to an unsecure area to claim
    their bags.
        Not only does the airline have to upload all the bags again, but
    all passengers, having been forced to leave the sterile CBP processing
    area, must be rescreened. This requires an extended ground time and
    doubles ground handling costs incurred in Anchorage.
        On December 5, 2003, the CBP published a Final Rule in the Federal
    Register to implement a new regulation requiring all carriers, foreign
    and domestic, to submit electronic manifests to CBP for all cargo
    destined for the Unites States. These new regulations will put an
    extreme hardship on the cargo carriers transiting Alaska between Asia
    and Europe, and places Alaska's key role in that transit at risk.
    Again, these carriers have to option to move operations to a foreign
    country to avoid new security regulations.
        These new regulations have already caused the loss of 14 weekly
    international passenger flights and could cause the loss of up to 54
    international cargo flights per week to the State of Alaska.
        The State Department and the DHS have stared their intention to
    reinstate the TWOV/ITI programs and operate as the ``Air Transit
    Program''. But to date, CBP has not advanced the program further.
        Anchorage is one of only six airports in the Nation that currently
    conform to Customs and Border Protection facility requirements.
    Anchorage has spent a great deal of money to reconfigure our
    international passenger terminal to ensure it meets the requirements to
    maintain the ITI and TWOV programs.
        The TWOV and ITI programs operate in Anchorage differently than any
    other airport in the Nation. Anchorage is a technical stop for Cathay
    Pacific between Hong Kong and Toronto, All passengers participating in
    the ITI and TWOV programs arrive and depart on the same carrier, same
    flight, and same aircraft from the same gate.
        The suspension of this program has been detrimental in two ways to
    the United States. The first and foremost was a reduction in overall
    border security; the United States lost the ability to scrutinize and
    crosscheck these passengers against all U.S. security databases.
        The second is the negative economic impact to the State of Alaska,
    as well as the city of Anchorage. The loss of these Cathay Pacific
    flights cost the State over $1.1 million each month. It has also caused
    many of the airport tenants to reduce staff that normally support these
    flights.
        In summary, Anchorage has a secure passenger transit facility that
    conforms to CBP technical requirements. We have securely processed
    these passengers for years into the terminal building and right back
    onto the same aircraft. We believe that the program increases U.S.
    security overall.
        In the Final Rule (RIN 1651-AA49) CBP's own analysis shows the new
    Advanced Cargo Information provision will cost air carriers substantial
    amounts of money to implement. CBP estimates the total annualized cost
    to air carriers could range from $345 million to $4.7 billion. These
    costs include not only implementation of new systems, procedures, and
    equipment but also the cost of delays and service degradation.
        All Asia-Europe flights currently transiting Alaska have the option
    of flying instead through Russia enroute to Europe. At this point, the
    routing through Alaska is more efficient and economical for the
    carriers. It may be less efficient and more costly than flying through
    Russia after implementation of these regulations.
        A single wide-body cargo tech stop is worth approximately $25,000
    to the local economy in airport fees, airport services, crew lodging,
    and fuel in Alaska. Each week Anchorage and Fairbanks have 54
    international in-transit flights. Flights re-routed through other
    airports would cost the State economy $1,350,000 each week and
    $70,200,000 each year.
        All of these new regulations are intended to increase the level of
    security; however, if the new regulations cause carriers to avoid
    entering the United States we lose on two fronts. One, the economic
    loss from the business going to another country, and secondly, and more
    importantly, we lose the opportunity to have a cursory review, under
    existing programs, of the passengers and cargo on these flights
    transiting Alaska. The unfortunate outcome of these flights rerouting
    to other countries is a reduction in the overall level of security.
        I request that you please review the overall impacts of all new
    regulations, but specifically these three regulatory programs. I ask
    that the DHS/CBP permanently reinstate the TWOV/ITI and Progressive
    Clearance programs for international passenger flights transiting
    Alaska and exempt international-to-international transit cargo
    freighter flights operating through Alaska from the cargo manifest
    requirements. Granting our request not only protects U.S. economic
    interests but also improves and enhances U.S. intelligence and total
    security.
                Sincerely yours,
                                            Frank H. Murkowski,
                                                              Governor.

        Senator Stevens. Thank you very much.
        Thank you very much, Mr. Senator.
        Senator Cochran. Senator Mikulski.

      CONSOLIDATION OF GRANT PROGRAMS INTO THE OFFICE FOR STATE AND LOCAL
                         COORDINATION AND PREPAREDNESS

        Senator Mikulski. Thank you very much, Mr. Chairman.
        Mr. Secretary, as I indicated, I am disappointed in the
    funding for both fire grants and port and cargo security. But
    we will be arguing those within the committee. I would like to
    come back to some of the policy issues raised in your testimony
    and on your plans. This goes to the fact that one of the
    biggest changes in the Homeland Security budget that is
    proposed is the combining of 24 grant programs from TSA, FEMA,
    Office of Domestic Preparedness, into something call the Office
    for State and Local Coordination and Preparedness.
        Could you tell me, number one, what is the rationale? And
    how will this make it more efficient and effective? Because
    this is a whole new thing. And, of course, you are aware of the
    mayors' criticisms that money from Homeland is not getting down
    to them.
        Secretary Ridge. Senator, there are several parts to your
    question. I hope I can address all of them in my response.
    During the past year, consistent with the President's national
    strategy, but also consistent with many of the concerns that I
    have heard from your colleagues in Congress, there has really
    been publicly expressed a preference to be able to go to one
    place within the Department of Homeland Security to access all
    the grants for State and locals.
        And heretofore, it was scattered over three or four
    different units. And so the consolidation of the 24 grants
    within this new office gives us an opportunity, one, I think,
    to develop a much more effective delivery system and hopefully
    in time to make the awarding of the grants simpler. There will
    always be a question of how much. And that is always going to
    be debated on the Hill as to how much money should be put in
    the grant programs.
        But the Congress has said, and the President wants us, once
    the dollar determination is made, is get the dollars out as
    quickly as possible. We think it will certainly help with
    coordinating the planning and the implementation and clearly
    the assessment. Several Senators have commented today that we
    need to start looking at the effectiveness of the dollars we
    have sent out to the community.
        So what we will set up within this new department, there
    will be a single portal. There will be one website that folks
    can go to get the information they need. They will develop
    relationships, I think the personal-professional relationships
    with the people in this one unit. We will draw down on the
    expertise from TSA and FEMA to make sure that the grant
    programs are administered as effectively as possible.
        We told our friends in the fire community, even though the
    fire grant program is moving from FEMA to the new facility, it
    will still be peer review. The grants will still be made
    specifically to the firefighters. And they will not see
    effectively any change. And the debate will continue to be how
    much money they put in the program.

                 IMPACT OF TRANSFER OF GRANT PROGRAMS FROM FEMA

        Senator Mikulski. Mr. Secretary, may I jump in here?
        So is FEMA moving to this office----
        Secretary Ridge. No.
        Senator Mikulski [continuing]. Or categories of FEMA, like
    the fire grant program and the emergency management performance
    grants?
        Secretary Ridge. Yes. Those grants will be moved to this
    new unit. But FEMA still operates under the Emergency and
    Preparedness Response Unit of the department. And FEMA
    continues to maintain authority over grants that relate to
    natural disasters, the administration of the natural disaster
    relief programs, the natural mitigation program. They are still
    responsible for flood mapping. So they retain some of their
    traditional responsibilities. But some of those programs that
    had to do with terrorism and preparedness for terrorist event
    move into this new unit within the department.
        Senator Mikulski. What about the criticism of the mayors?

                      DELIVERY OF STATE AND LOCAL DOLLARS

        Secretary Ridge. The mayors have voiced publicly and
    privately on many times their frustration with the delivery
    mechanism to get the dollars that you appropriated, that we
    requested, you appropriated to get it down to them. I would
    assure you, Senator, that we are prepared to deliver those
    dollars. The logjam that we need to break, if not blow up, has
    to do with the communications between the mayors and the
    governors and how they distribute those dollars. Because we
    have asked the governors to take the lead in developing a
    statewide strategy.
        Congress has said 20 percent can stay in the State capital.
    The other 80 percent has to flow through down to the mayors.
    Their frustration, I think, is legitimate. I think there are
    many reasons for it. We are going to take a look at some of the
    States where the money has been practically all distributed,
    where people are not complaining, to see if we can develop some
    best practices that we will go back to the governors with and
    get them to use them. And if we need to put it in terms of a
    regulation so that they distribute the dollars that way, we
    will.
        I plan on meeting with the governors privately, when they
    come into town in a couple weeks, to address that very
    legitimate frustration that some of the mayors have directly.
    We need to do everything we can to avoid just sending out
    grants to thousands and thousands of municipalities because we
    will never be able to build a statewide and then a national
    infrastructure. So the mayors are right. We have to do a better
    job of getting the money to them. We are prepared to distribute
    it, but we need to work with the mayors and the governors to
    come up with a better distribution mechanism.
        Senator Mikulski. Well, just two points, Mr. Secretary.
    First of all, I am glad that you are going to meet with the
    Governors. You are part of that unique organization. And I
    think you understand their needs. And what we saw with
    hurricane Isabel, for example, it was a statewide catastrophe.
    And we needed Governor Ehrlich's response and local response.
    So we need you to work with the Governor and figure out how to
    effectively coordinate.
        The second thing, in terms of this new one stop shop, I
    would really invite your staff to meet with mine so that we
    truly understand it. A lot of us have put a lot of effort into
    establishing these grant programs. And the idea of a one-stop
    shop seems very attractive. But we also want to know how that
    also enables this effective coordination. Because if we do not
    coordinate, this is not going to work.
        So thank you very much. And again, many thanks for all that
    you helped us with.
        Secretary Ridge. Thank you, Senator.
        Senator Cochran. Thank you, Senator.
        Senator Murray.
        Senator Murray. I would be happy to defer to Senator
    Domenici, if he would----
        Senator Cochran. Senator Domenici.
        Senator Domenici. Well, thank you very much. Am I on? Can
    you hear me?
        Senator Cochran. Yes, sir. Thank you, sir.
        Senator Domenici. First, Mr. Secretary, it is nice to be
    with you.
        Secretary Ridge. Thank you, sir,
        Senator Domenici. I do not get an opportunity to visit with
    you very often. I am very proud of what you have been doing. I
    am fully aware it has not been an easy thing.

     FEDERAL LAW ENFORCEMENT TRAINING CENTER (FLETC) IN ARTESIA, NEW MEXICO

        The reason I am going to bring a very small issue to you is
    because I do not think continuing to communicate with the
    department brings results. No aspersions. But in our State of
    New Mexico, we have an institution called FLETC, the Federal
    Law Enforcement Training Center, Artesia, in New Mexico. FLETC-
    Artesia is a pretty big place, which grew over a decade from a
    college center to a fully run and operated Federal law
    enforcement training center.
        Needless to say, that part of New Mexico is very proud of
    it, as we are. We are now training, expanding the training
    base. As you know, hundreds of new U.S. marshals are being
    required to be trained. FLETC is also the campus chosen to
    provide training for airline pilots who choose to carry
    firearms in the cockpit, and that is an election. FLETC
    provides this training to Federal flight deck officers. in
    addition to the basic advance training.
        Now feedback from these trainees who have been in Artesia
    is almost universally positive. The training site is pretty
    new, pretty good. The places to live in are pretty fine. It is
    a small town, nonetheless. Artesia is about 3 hours from any
    large city. Now when we started FLETC-Artesia, that was a big
    plus. Now it is beginning to be well known, maybe that's a good
    thing.
        But I will tell you what will make it a plus and keep it a
    very reasonable facility for training your people. It is the
    capacity to have flight service enhanced so that people can get
    there easier than just riding on a bus.
        You know that this entire committee and then the Congress
    went out on a limb. We said we will not earmark funding for the
    new department. Therefore, you got it all. You probably were
    glad to have it. Now after a year and a half, you are probably
    thinking that, maybe they should have given me some direction
    on a few of these; I would not be having so much trouble. In
    any event, we could have gotten earmarked funding for this
    FLETC, because we have invested a huge amount of tax dollars.

                       AIR SERVICE TO ARTESIA, NEW MEXICO

        FLETC put out a request seeking feedback from airlines who
    might provide service. My understanding is that there has been
    a response, and it was positive. The estimates are that it
    would take about $800,000 to provide the service for the rest
    of the year. This would make a rather fantastic facility
    available for the extra training beyond the few hundreds that
    we train for--as people who watch our borders and the like.
        I am not sure you know about it. But can I lay it before
    you today and assume you will know about it after this
    discussion. You can pass it on to somebody to look at it.
        Secretary Ridge. Senator, I am now nearly fully briefed. I
    know a lot more than I did when I walked into the hearing room.
    And one question I would like to just ask you is whether or
    not, from your perspective, that the facilities at Artesia are
    being fully used. In other words, if we enhanced the ability to
    get more people there for the training program, do the existing
    facilities have the present capacity to train more people?
        Senator Domenici. The answer is yes. What is happening is,
    that it is such a good facility, but for its distance, it is
    almost full all the time. We are constantly being harped upon
    by internal observers that we ought to take some of the people
    that are there and put them somewhere else so they would not
    have to travel.
        Secretary Ridge. Senator, since you raised it to my
    attention, it becomes my responsibility to look into it and get
    back to you. And I will.
        [The information follows:]
         Enhancing Flight Service/Transportation for Trainees to FLETC
        In the post September 11, 2001 period, there has been real,
    sustained growth in the use of all FLETC training centers, including
    the Artesia, NM center. Although the absence of regular and reliable
    service to the Artesia area has been an obstacle to wider use of that
    location in the past, recently we have increased utilization to almost
    capacity because the FLETC Glynco site is at maximum capacity and the
    agencies need to train within specific timeframes. FLETC is
    experimenting with conducting more basic training programs at Artesia
    in fiscal year 2004 and there has been increased use of the site for
    Flight Deck Officer training, among others, for specialized training.
    With this in mind, FLETC will track closely the issues and usage of the
    Artesia site and report back their findings in fiscal year 2005. Should
    the travel service continue to be a problem, the Department will
    consider looking at other possible solutions.

        Senator Domenici. I appreciate it.
        Now what about the time? Am I out?
        Senator Cochran. If Senator Murray has no objection, you
    can ask another question.

           CONSTRUCTION OF NISAC FACILITY AT KIRTLAND AIR FORCE BASE

        Senator Domenici. All right. Let me ask a question with
    reference to a project that is called NISAC, N-I-S-A-C. You may
    recall, when you first came into this job, you were still in
    some temporary office. We brought some people from Sandia and
    Los Alamos, and they showed you this computerization,
    computerized program, that gets put to use and continues to be
    upgraded.
        Anyone whom you would assign to run the office could locate
    every piece of infrastructure in the United States and then
    locate them vis-a-vis themselves and others. For example, if
    they were to take out a dam, what are the repercussions. A
    little machine shows you what happens. This big dam is broken
    down. It will tell you water will go as far as L.A. One of the
    bad things about it, we hope nobody else gets it. So far, it
    just belongs to you, to us.
        But it is terrific from the standpoint of, answering a
    hypothetical question with reference to what happens if
    something else happens, either in the electricity system or
    energy system, the water system. This facility is adjacent to
    Sandia National Labs. One of the items that transferred from
    the Department of Energy to the Department of Homeland Security
    with this act was an appropriation of $7.5 million for the
    construction of a NISAC facility at Kirtland Air Force Base to
    be used by your department for the purposes intended.
        So I am just going to inquire and put it in here in writing
    what happened, why the delay, and why is it not moving ahead?
    What is the status of the $7 million that we set aside? When
    can the committee expect Homeland Security to break ground on
    this NISAC facility, which the record, as I reflect it, would
    clearly indicate is your baby? You are going to use it. It is
    not going to sit there.
        Secretary Ridge. Senator, I remember their presentation.
    You know better than most the extraordinary work that the
    national labs have done for 60 years for this country, the
    variety of different ways. And you also know that our
    department is happily tied in with the national labs in several
    very meaningful ways.
        I cannot give you the specific answer to that question
    either, but it is incumbent upon me to do so. And I will.
        [The information follows:]
           Construction of NISAC Facility at Kirtland Air Force Base
        IAIP continues to move forward with the plans to build the
    facility, giving full consideration to the elements of the program and
    our obligation to comply with NEPA and other Federal statutes
    applicable to Federal construction projects.

        Senator Domenici. Thank you very much.
        Secretary Ridge. Yes, sir.
        Senator Domenici. Thank you, Mr. Chairman.
        Senator Cochran. Thank you, Senator.
        Senator Murray.

        EFFORT TO IMPROVE CARGO SECURITY THROUGH OPERATION SAFE COMMERCE

        Senator Murray. Thank you very much, Mr. Chairman.
        Mr. Secretary, as I mentioned in my earlier comments, the
    country's three largest cargo centers, load centers, have been
    working with the Department of Homeland Security and some of
    the private sector clients for the last 2 years in an effort to
    improve cargo security through Operation Safe Commerce. The
    ports of Seattle and Tacoma, the ports of Los Angeles, Long
    Beach, and New Jersey and New York have been really
    enthusiastic partners and are anxious to be meaningful
    contributors to the overall port security effort. And they are
    continuing to offer their facilities, their expertise, their
    goodwill, both domestically and abroad, to ensure our success.
        As you know, taxpayers have already committed to $75
    million for Operation Safe Commerce with the goal of really
    learning what works and what does not when it comes to securing
    containers. Unfortunately, because of the delay in funding
    Operation Safe Commerce, this pilot program is just now getting
    off the ground. But nonetheless, the load centers involved with
    this important program should have strong data about best
    practices, technology, and hardware this year.
        So I was really shocked when I saw the White House was
    eliminating this port security effort in their budget. And I
    wanted to tell you I think that is really shortsighted and
    really abandons the progress that our governments, our ports,
    our shippers in the private sector have been working really,
    really hard to achieve.

     STATUS OF OBLIGATION OF FUNDS APPROPRIATED FOR OPERATION SAFE COMMERCE

        So I wanted to ask you two questions this morning. First of
    all, only $58 million of the $75 million that Congress
    appropriated for Operation Safe Commerce has been obligated.
    Can you give us a time line for when the last $17 million that
    was appropriate is going to be obligated?
        Secretary Ridge. Senator, I cannot. I know that they draw
    down against the appropriation based upon their expansion of
    the pilot and whether or not sitting within the Department are
    invoices to be paid. I could not tell you, unless I go back and
    check. But I will certainly be pleased to do so.----
        Senator Murray. If you could have someone get back to us,
    because----
        Secretary Ridge [continuing]. It is clearly the intent of
    Congress with the appropriations over a 2-year period to have
    three very robust and very comprehensive pilots. I think that
    is also the reason that there is no funding in 2005. These are
    pilots. There are to be lessons learned. And again, $75 million
    for three pilot programs is a very, very substantial
    investment. We still need to see what lessons we learned and
    whether or not they are applicable to ports across the country.
        Senator Murray. Well, Mr. Secretary, I can tell you that if
    we do not continue to fund that in the next year, much of the
    progress that has been made, much that is just now being
    implemented, we will not be able to get the results back. And
    as you know, the point of Operation Safe Commerce was to find
    out what works out there and then be able to apply it to the
    other ports. If we do not find out what works, if we do not
    have the risk analysis back, if we do not have the results
    back, it will never get--the lessons learned will never be
    shared. And we will never have lessons learned.
        So I was really surprised that the administration is
    working to kill this program in the budget.
        Secretary Ridge. Well, I do think that if they need
    additional money on top of the $75 million, clearly a couple of
    those communities would have access to substantial additional
    dollars under the Urban Area Security Initiative that would be
    a follow-on.
        Senator Murray. If you are planning on funding it under
    that, that would put them against all first responders. I think
    port security, and I think you would agree with me, is such a
    high concern that we cannot start pitting these people against
    other really important issues. We need to fund this, fund it
    specifically, get the answers back.
        And again, this program, private sectors come together,
    ports have come together. Everyone is working very hard. They
    are just now beginning to learn what they need to do. And I
    think we should not shut them off.
        Secretary Ridge. Well, Senator, it will be incumbent upon
    me to get back and answer that first question to see where the
    additional $17 million are to be applied to the existing
    programs.
        [The information follows:]
    Timeline for Obligating the Last $17 Million Appropriated for Operation
                                 Safe Commerce
        TSA anticipates that the Request for Applications for the $17
    million appropriated in fiscal year 2004 for Operation Safe Commerce
    (OSC) is on track to be released early this summer, with final award
    anticipated in the fall. This funding will be used to build on current
    OSC pilot projects, and may include other supply chains. The
    expenditure of the remaining funds will be fully coordinated within the
    Department and Congress to ensure that the cargo security efforts
    through OSC are integrated into broader departmental initiatives to
    secure the cargo supply chain security.

        Senator Murray. Well, would you agree that it would be wise
    to continue this program in the next fiscal year in order for
    us to learn what we can, to make sure that we are doing all we
    can to secure our ports?
        Secretary Ridge. Senator, it has been my impression that
    three pilots at $75 million, there ought to be some lessons
    learned with this infusion of very, very significant dollars.
        Senator Murray. Well----
        Secretary Ridge. And I guess the reason that the dollars
    were terminated is that we felt that you did have the
    collaboration. It is a great program. You do--one of the things
    that the Coast Guard has done historically very well, probably
    better than any other agency, is on a day-to-day basis they
    work with the private sector quite well. But you have three
    major ports, 2-year funding stream, $75 million. And the view
    is that is quite a bit of experimentation. There ought to be
    plenty of lessons learned after those $75 million are spent on
    pilot programs.
        Senator Murray. Well, because the funding was delayed, they
    are just at the point now of beginning to implement. The first
    container ship comes in in a few weeks to the Port of Tacoma
    that is--that they will begin to be able to analyze it. I know
    that the programs, the CSI and the C-TPAT are also out there.
        But I am positive you are aware of a recent GAO study that
    is called Preliminary Observations on Efforts to Target
    Security Inspections of Cargo Containers that those two
    programs do. It is very critical of the methodology that is
    incorporated in the customs and border protection initiatives.
    And I am happy to share that with you. It is extremely
    critical.

                    CONTINUATION OF OPERATION SAFE COMMERCE

        But I think the point of Operation Safe Commerce is that we
    can learn from what they are doing to make sure that we are
    doing the reporting and analyzing, inspection, analyzing the
    risk levels. And if we do not continue this program, we are not
    going to have the information to do what is right in the
    future. We can be spending a lot of money in a lot of areas in
    ways that do not work.
        Secretary Ridge. Well, it is conceivable, Senator, and I do
    not offer this as the answer to the concern you have, but in
    the budget we are asking for more money for personnel to
    support our National Targeting Center. And I think there is a
    direct link between the lessons you learn dealing with the
    supply chain coming into ports and the National Targeting
    Center, which is at the heart.
        Senator Murray. Yes. I have been around long enough to know
    that if you do not name it, it does not get funded.
        Secretary Ridge. Well, I think when you have a new
    department and a department particularly that relies on the
    notion that we will never be able to inspect all 22 million
    containers that come into this country every year, and we have
    three major pilot programs out there, that there are lessons
    learned and that we ought to--if there is a possible
    connection, we ought to try to make it. I do not know if there
    is. It just seems to me, Senator, that after a couple years,
    there ought to be a couple lessons learned after $75 million
    has been spent.
        Senator Murray. Again, only $57 million has gone out. We
    still are waiting for the rest of it. And I think that we
    should not judge too soon on that. But I am happy to work with
    your office and supply information.
        Mr. Chairman, let me ask one more quick question under my
    time.

     FUNDING FOR IMPLEMENTATION OF THE MARITIME TRANSPORTATION SECURITY ACT

        The budget that was sent over includes $100 million for the
    implementation of the Maritime Transportation Security Act,
    MTSA. Admiral Collins testified before us last September that
    it would take $7.3 billion over 10 years to implement the MTSA,
    including $1.5 billion this year. I am very concerned that the
    President's request is 7 percent of what the commandant told us
    he needs to succeed. Do you share that concern?
        Secretary Ridge. Well, again, I do not have the
    understanding of the context with which the commandant shared
    that information with you. It is my understanding, however,
    that the sum that he was talking about included the additional
    security measures that would need to be employed at ports and
    vessels. That is not a sum that was necessary for the Coast
    Guard to conduct the studies at ports of interest or the safety
    security studies on vessels.
        So I think there is sufficient money in here for the Coast
    Guard to do its work. The gap is a place where we need to have
    a public debate as to whether or not it is the taxpayer's
    responsibility to fund, continue to fund port security or
    whether or not, since these basically are intermodal facilities
    where the private sector moves goods in and out for a profit,
    that they would be responsible for picking up most of the
    difference.
        So I think the dollars that we received this year empowers
    the Coast Guard and gives them the manpower to do port
    assessments and to look at 10,000 vessels and to do the
    security analysis. I think the gap is----
        Senator Murray. Are you suggesting that it is----
        Secretary Ridge [continuing]. The dollars for security.
        Senator Murray. So if I heard you correctly, you are saying
    that the private industry must now come up with this $7 billion
    over the next 10 years to implement the security for our
    Nation?

                     PRIVATE SECTOR SHARE OF PORT SECURITY

        Secretary Ridge. Well, we have an $11 trillion economy.
    Much of it is driven through imports and exports. Major
    companies use our ports. I can only refer back to the Federal
    investment, the State investment, and local investment in the
    ports of Philadelphia and Newark. There is plenty of public
    money in these ports already. They provide the land. They buy
    the cranes. They in many instances employ the personnel. So the
    notion that there is not much of a public investment in the
    courts, I do not think is, based on my experience in
    Pennsylvania, it is not accurate.
        At some point in time in the distribution chain--and my
    view is that ports are part of the supply chain and the
    distribution chain of the private sector----
        Senator Murray. Well, Mr. Secretary----
        Secretary Ridge [continuing]. That they ought to be able to
    defray some of the expenses associated with it.
        Senator Cochran. The time of the Senator has expired.
        Senator Murray. Mr. Secretary, just let me comment very
    quickly. I am listening to your logic, but I would just
    respectfully say that if one terminal or port in this country
    said, we are not going to ante up the money, we do not have it,
    and a terrorist used that weak link to come into this country,
    all of us would be paying for the consequences of that.
        Secretary Ridge. Well, Senator, this will be debated,
    obviously, in this subcommittee and on the floor of both
    chambers, and I am sure Congress has been generous. I think
    there is over a half a billion dollars out in port grants. I
    think this year the budget allows for nearly $50 million in
    port grants. I think it is going to be very important at some
    time in the near future that we engage the very appropriate
    public debate as to how much additional taxpayer financing
    should go into a piece of infrastructure that basically
    supports the private sector.
        They have a commercial and business interest in securing
    their supply chain. And I think, again, we will continue to
    provide, there is no doubt in my mind we will continue to
    provide some Federal resources, no doubt in my mind that States
    and local communities are going to continue to support their
    port authorities and their ports. But I also think we need to
    elevate the discussion so we determine what the role of the
    private sector is to help secure that infrastructure for
    themselves.
        Senator Murray. I look forward to that debate. Thank you.
        Secretary Ridge. Thank you.
        Senator Cochran. Senator Specter.
        Senator Specter. Thank you, Mr. Chairman.
        Mr. Secretary, on Friday I landed at Tom Ridge Airport in
    Erie. And I want to report to you that it is a great airport.
        Secretary Ridge. Thank you, Senator.

     WAY TO RECONFIGURE THE CALCULATION FOR HIGH-RISK AREAS TO INCLUDE THE
                    TOM RIDGE AIRPORT AND ERIE, PENNSYLVANIA

        Senator Specter. I then went to a meeting of first
    responders and heard the concern that among the 50 high-risk
    areas, Erie is not included, largely because of the population
    factor. But they have a port, and they have access to a border
    with Canada. And my question to you is: Is there some way to
    reconfigure that calculation to include the Tom Ridge Airport
    and Erie?
        Secretary Ridge. Senator, the funding streams that Congress
    has generally supported the past 2 years through the Office of
    Domestic Preparedness had one portion that went to the States
    that was driven strictly by population, another portion that
    went to urban areas, where the Congress gave the department the
    flexibility to look at population density, critical
    infrastructure, the threat level, and make the appropriation.
        One of the adjustments, based on our thinking in terms of
    how we can better direct those dollars is to look at that one
    pool of money that historically goes to the States by formula,
    notwithstanding that every State, large or small, should get a
    certain level of funding, but to see, based on a broader
    statewide analysis of critical infrastructure, that those
    States should get actually more money depending if the critical
    infrastructure is in there.
        Senator Specter. Mr. Secretary, I am hesitant to interrupt
    you, but there is very limited time and I want to ask you three
    more questions.
        Secretary Ridge. Yes.
        Senator Specter. I would like you to take a look to see, if
    you might, we can figure the high-risk areas to include Erie.
    When you talk about the general fund, the minimum for each
    State is three-quarters of 1 percent, which means that 40
    percent of the funding, general fund and first responders, is
    taken off on the small States. And that has a very
    disproportionate share. For example, in Pennsylvania per capita
    we receive $5.83, and Wyoming receives $38.31. And that is the
    fund where we have to look to a city like Erie, community like
    Erie.
        Last August, I visited some 33 counties on first responders
    and designated one of my top deputes to review our State. What
    can you say about providing a little more equity for the
    general fund, especially when Erie is not a high-risk area and
    has to limit its intake from the general fund?
        Secretary Ridge. Well, Senator, I think our strategic
    decision to deal with that issue, not community-specific but to
    deal with the notion that every State should still get some
    minimum funding, but not all of that money in that program
    should be allocated strictly on population. Now that our agency
    has matured and now that we have strategic plans from the
    individual States every governor has submitted a strategic plan
    based on their needs, we have asked for the flexibility to
    distribute those dollars differently than just on a strict
    funding formula.

        FLEXIBILITY IN AUTHORITY TO DISTRIBUTE FUNDS TO HIGH-RISK AREAS

        Whether or not Congress gives us that flexibility to do so,
    so that States like Pennsylvania would have more resources to
    support communities such as Erie, or I would say Senator Levin
    would tell you support communities like Port Huron, which is a
    small community of 30,000 people, that has chemical farms,
    energy infrastructure, and all kinds of basically critical
    infrastructure, and they get nothing either.
        So that is our response to the need to address some of the
    needs of smaller communities.
        Senator Specter. The issue of your authority, Mr.
    Secretary, has been a discussion which you and I have had on
    many occasions. And as more information is coming to light
    about September 11, there are more indicators, more evidence,
    that if all of the information had been collected in one spot,
    9/11 might well have been prevented.
        And I know that there has been a change with the FBI and
    the CIA and other intelligence agencies to try to have better
    coordination. And this is a very involved matter. But I would
    appreciate it if your department, if you would give us an
    answer in writing, because we do not have time to go into it
    now, as to your evaluation as to how it is working.
        As I am sure you will remember, when we passed the bill in
    October of 2002 and the House of Representatives had left and
    it was take it or leave it in the Senate and I wanted to offer
    an amendment to give you the authority, as Secretary, to direct
    and have the critical authority, the issue went all the way to
    the President. And it was either get the bill in its form
    without having that authority and you or having it deferred
    until the spring. But I would like your evaluation as to how
    that is working.

                       HOW THREAT DETERMINATIONS ARE MADE

        And the final question I have within my 5 minutes, Mr.
    Chairman, is: What can you tell us within the bounds of
    security as to how you make the risk assessment on the
    different gradations? There is obviously enormous concern about
    whether, when, where there will be another 9/11. It has sort of
    recessed from our minds as time passes. But I know it is very
    much on your mind and very much on the President's mind. And
    you took some extra precautions recently over the holiday
    season. And you had made a comment that you thought that the
    precautions you took may well have averted another 9/11. And I
    think the expression you used was that you had a gut reaction
    to come to that sense or that conclusion.
        Secretary Ridge. Right.
        Senator Specter. I would be interested to know, and I think
    everybody would be interested to know, how you make the threat
    assessments, where you think we are generally at risk today,
    and, to the extent you can specify, how you think the
    precautions which you took may have prevented another 9/11.
        Secretary Ridge. Senator, I will try to be brief, but it
    does call for a fairly lengthy----
        Senator Specter. Oh, take your time. My time is over. Take
    your time.
        Secretary Ridge. Thank you, Senator. First of all, every
    single day, at least three times a day, there is formal
    interaction between the intelligence community, and that
    includes the Department of Homeland Security. Every morning the
    Attorney General, the FBI Director, the CIA Director, the
    Deputy, the Secretary of Homeland Security, and others meet
    with the President, Vice President, to go over the threat
    information from the previous day.
        Twice a day, later on that morning and in the afternoon, by
    secure video, the intelligence community examines the threats
    of that particular day, but obviously looks back at the
    reporting stream for previous days to see whether or not there
    was additional corroboration, whether or not they render any
    judgments with regard to the credibility, but over a period of
    time, Senator, through that process and that constant
    interaction at the Terrorist Integration Center, the
    interaction of the professional analysts, the CIA, even on ad
    hoc basis.

                        PROCESS FOR RAISING THREAT LEVEL

        At some point in time prior to about a week or so prior to
    when we raised the threat level in December--I say a week. I do
    not recall specifically. But at some point in time, the volume
    of the reporting, the nature of the reporting, assessments
    based on the credibility of the reporting were such that we
    began to look at the possibility of raising the national threat
    level. That process over a 24-, 36-hour period then led to the
    meeting of the President's Homeland Security Council. And that
    is Secretary of State and the Secretary of Defense and the
    Attorney General, the FBI Director, the Secretary of
    Transportation, yours truly.
        It is then discussed among these principals. And based upon
    that discussion, we made the decision to recommend to the
    President for the foreseeable future we raised the threat
    level. That, in very short fashion, is the process that we
    engage in to raise in.
        I note it is a process we have engaged in the past where we
    didn't raise it. And it had been 6 months since we took the
    national threat level up.
        Finally, Senator, I would say to you and your colleagues on
    the committee and, for that matter, the entire country, as we
    do, as this department works with the private sector to harden
    certain chemical facilities and energy facilities and the like,
    as we continue to do a better job of informing State and local
    law enforcement, as we continue to do our job, I believe we
    will raise the threshold even higher to go to the next threat
    level. Because initially, the national warning system was based
    simply on what we heard and perceived to be the threat. But
    there is also a risk analysis that we can now, because of the
    Department, have to plug into that equation.
        That may be the threat, but what is the risk based on, the
    precautionary or preventive or security measures that have been
    in place? You could have the same threat with no security, and
    you might want to raise it. You could have the same threat
    level but with more security and say, we are comfortable
    enough, given the present circumstances, perhaps to target
    information privately to a particular place, a particular site,
    but not take the entire country up.
        That would be the goal, because we are quite aware of the
    fact that raising the level nationally is a blunt instrument.
    Normally it requires a labor intensive response. But as we
    build permanent security measures across-the-board at the State
    and local level and in the private sector, it should be more
    difficult to take it up, because we will have reduced the risk
    by adding additional security measures.
        Senator Specter. Thank you.
        Senator Cochran. Your time has expired, Senator. Thank you.
        Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman. And I will put my
    post-statement in the record.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        Mr. Secretary, I want to thank you for coming to testify before us
    today.
        We are entering the second year of this subcommittee and in that
    time there have been many changes to your department and there are new
    challenges facing the country. I appreciate your appearance here to
    discuss the Administration's priorities in the new fiscal year.
        For the past year, you have supervised many constituents of mine
    who are former employees of the Immigration and Naturalization Service
    and who now work for the Bureaus of Customs and Border Protection,
    Immigration and Customs Enforcement, and Citizenship and Immigration
    Services.
        A year ago, I praised them to you and told you they would exceed
    your expectations--I trust that they have done so.
        At the same time, you and others at the Department told me that you
    would make full use of these excellent employees, and that the Vermont
    workforce would not decline as part of the reorganization. You have
    kept that pledge, and I look forward to continuing to work with you to
    ensure that these employees contribute to protecting and enhancing our
    Nation.
        I would like to turn however to President Bush's proposed homeland
    security budget for fiscal year 2005 that was sent up here by the
    Administration and share with you a few of my concerns.
        I was extremely disappointed that the budget drops the all-state
    minimum formula, which I authored, from the State Homeland Security
    Grant Program administered by the Office for Domestic Preparedness
    (ODP). This formula assures that each state's first responders receive
    a minimum of .75 percent of those grants to help support their basic
    preparedness needs.
        Not only would this change result in the loss of tens of millions
    in homeland security funding for the fire, police and rescue
    departments in Vermont and other small- and medium-sized states, but
    also deal a crippling blow to their efforts to build and sustain their
    terrorism preparedness.
        Mr. Secretary, you and I have spoken many times in public and
    private on how to fairly allocate domestic terrorism preparedness funds
    to our states and local communities. We both agree that each State has
    basic terrorism preparedness needs and, therefore, a minimum amount of
    domestic terrorism preparedness funds is appropriate for each state. We
    both agree that highly populated, highly threatened and highly
    vulnerable areas have terrorism preparedness needs beyond those basic
    needs for each state. Most importantly, though, we both agree that
    homeland security is a national responsibility shared by all states,
    regardless of size.
        On January 28, I spoke with Sue Mencer, the Executive Director of
    the new Office of State and Local Government Coordination and
    Preparedness (SLGCP), about the merging of organizational units within
    the Homeland Security Department. During our exchange I mentioned the
    importance of the all-state minimum requirement and Ms. Mencer assured
    me that the fiscal year 2005 DHS budget proposal would include the .75
    percent all-state minimum.
        You can imagine my surprise, then, when I read in the President's
    budget proposal that the grants to States for addressing State and
    local homeland security requirements and Citizen Corps activities and
    law enforcement terrorism prevention grants would be allocated among
    the states based on population concentrations, critical
    infrastructures, and other significant terrorism risk factors. Not only
    was I troubled to see that grants to States for addressing State and
    local homeland security requirements and Citizen Corps activities and
    law enforcement terrorism prevention grants had been cut by nearly $1
    billion, but without the all-state minimum protection for smaller
    states, there is no assurance of funding under these programs.
        I wrote the all-state minimum formula to guarantee that each State
    receives at least .75 percent of the national allotment to help meet
    their national domestic security needs. I strongly believe that every
    state--rural or urban, small or large--has basic domestic security
    needs and deserves to receive Federal funds to meet those needs.
        After the terrorist attacks of September 11, 2001, we have worked
    together to meet the needs of all State and local first responders from
    both rural and urban areas. Now, however, it appears that the President
    wants to shortchange rural states, rolling back the hard-won progress
    we have begun to make in homeland security. Our fire, police and rescue
    teams in each State in the Nation deserve support in achieving the new
    homeland security responsibilities the Federal Government demands.
        I ask that you support a budget supplement amendment to restore the
    .75 percent minimum to the State Formula Grants Program. I look forward
    to speaking and working further with you and my colleagues on this
    matter.
        Representatives of urban states have argued that Federal money to
    fight terrorism is being sent to areas that do not need it and is
    ``wasted'' in small towns. They have called the formula highly
    politicized and insisted on the redirection of funds to urban areas
    that they believe face heightened threat of terrorist attacks.
        What critics of the all-state minimum seem to forget, though, is
    that since the September 11 terrorist attacks, the American people have
    asked ALL State and local first responders to defend us as never before
    on the front lines in the war against terrorism. Vermont's emergency
    responders have the same responsibilities as those in any other State
    to provide enhanced protection, preparedness and response against
    terrorists. We must ensure that adequate support and resources are
    provided for our police, fire and EMS services in every State if we
    expect them to continue protecting us from terrorists or responding to
    terrorist attacks, as well as carry out their routine responsibilities.
        Most of the cuts to the formula-based and law enforcement
    prevention grants were made to increase to $1.4 billion the
    discretionary grants for use in 50 specific high-threat, high-density
    urban areas. While I recognize that enhancing the security of those
    urban areas represents a critical national priority, I cannot support
    both a drastic reduction in the formula-based and law enforcement
    prevention grants and a barring of small states' access to even a
    portion of the more than $2.7 billion that the formula-based and law
    enforcement prevention grants and Urban Area Security Initiative grants
    would total.
        Fostering divisions between states ignores the real problem: the
    President has failed to make first responders a high enough priority.
    We should be looking to increase the funds to our Nation's first
    responders. Instead, we see the President proposing to cut overall
    funding for our Nation's first responders by $800 million. These cuts
    will affect each state, regardless of size or population.
        The Hart-Rudman report on domestic preparedness argued that the
    United States will fall approximately $98.4 billion short of meeting
    critical emergency responder needs over the next 5 years if current
    funding levels are maintained. Clearly, the domestic preparedness funds
    available are still not enough to protect from, prepare for and respond
    to future domestic terrorist attacks anywhere on American soil.

        Senator Leahy. Governor Ridge, it is always good to have
    you back here.
        Secretary Ridge. Senator, thank you.
        Senator Leahy. I have not flown into the Tom Ridge Airport,
    but----
        Secretary Ridge. You do not have that many flight options,
    Senator. But----
        Senator Leahy. Should you come to Burlington, Vermont, feel
    free to stop by the Leahy Center.

      PROPOSAL TO DROP THE ALL-STATE MINIMUM FORMULA FOR ALLOCATING STATE
                         HOMELAND SECURITY GRANT FUNDS

        Governor, I have to state that I really was disappointed
    that the President's proposed budget for fiscal year 2005 drops
    the all-state minimum formula. I authored that. They dropped it
    from the State homeland security grant. And you probably do not
    need reminding, but this says that each State will receive a
    minimum three-quarters of 1 percent of those grants to help
    support the first responders basic preparedness.
        I thought I would bring this up because with the makeup of
    this subcommittee, that would affect all but, I think, one or
    two on this subcommittee. So it may be more than a passing
    interest. But more than that, it would result in the loss of
    millions of dollars in homeland security funding for fire,
    police, rescue departments in small and medium-sized States. I
    think it would create a crippling blow for their efforts to
    build and sustain their terrorism preparedness.
        And these small States, each have a particular need that
    may be different. Some are like my State. They are a border
    State. Others have major ports in them, may have natural--or
    may have energy facilities important not just to their State
    but to the rest of the country. And you and I have spoken about
    how to fairly allocate domestic terrorism preparedness, funds
    to our States and local communities. You have been very
    forthcoming on that, as have your staff.
        I thought we had agreed that fire, police, emergency
    medical rescue teams in each State deserve support in carrying
    out the new homeland security responsibilities that the Federal
    Government demands of it. So I was surprised, knowing that on
    the one hand these States are being required to carry out these
    demands. You read that in the budget there will be allocated
    among the States based on population concentrations, critical
    infrastructures, and other significant terrorism risk factors,
    as determined by you.

                             IMPACT ON RURAL STATES

        I believe it means the administration wants to shortchange
    rural States, wants to roll back the hard-won progress we have
    begun to make in homeland security by slashing the protections
    in the all-state minimum. Now I am strongly committed to the
    critical national priority of enhancing urban areas. I have
    supported legislation, especially some of the particularly
    targeted urban areas where we are today in New York City and
    elsewhere.
        But I cannot go and tell rural areas that, sorry, you are
    not big enough to have to worry, even though, if I was planning
    a terrorism attack, I would know that, for example, attacking
    the Tom Ridge Airport is going to get as much international
    coverage as attacking JFK or LAX, because it is a United States
    airport within our boundaries.
        So would you agree that homeland security is a national
    responsibility shared by all 50 of the States regardless of
    their size?
        Secretary Ridge. Senator, yes. I think one of the
    challenges for the Department of Homeland Security is to
    integrate the capacity we have within our States and local
    communities, match it up with the Federal effort to combat
    terrorism. So there is a shared fiscal responsibility. There is
    a shared operational responsibility. It is a national plan, not
    just a Federal one.
        Senator Leahy. But then in these States they have to do a
    certain amount of minimum--I do not know whether it was the
    State of Idaho or West Virginia, Vermont. There is only one
    State smaller than Vermont in population, Wyoming. But whatever
    the State is, they have to do a certain amount of minimum
    preparation, communications. Whether it is in a State of half a
    million or four million, they have to do certain basic things.
    You have to have basic ideas for planning, for response
    equipment, fire, police, and so forth.

     SUPPORT OF FUNDING TO RESTORE THE THREE-QUARTERS OF 1 PERCENT MINIMUM
                      TO THE STATE FORMULA GRANTS PROGRAM

        So if you accept the fact that there are certain minimum
    things that have to be done wherever we are, would you support
    a budget supplement amendment to restore the three-quarters of
    1 percent minimum to the State formula grants program, which
    include the State homeland security grant program, the Citizen
    Corps, and the law enforcement terrorism prevention grants
    program?
        Secretary Ridge. Senator, I would much prefer the approach
    as embodied in the President's budget, that as we take a look
    at the dollars that have historically been allocated to States
    Strictly on a formula, that the Secretary be given the
    flexibility, understanding that he has just testified now and
    believes that there ought to be some minimum that goes to every
    State and territory.
        Senator Leahy. What is that minimum?
        Secretary Ridge. We would certainly have to sit down and--
    --
        Senator Leahy. I mean, it is .75 now. Is that too much? Too
    little?
        Secretary Ridge. Senator, frankly, I would like to take a
    look at all of the statewide plans that the Governors have
    submitted to us and make that determination. And we certainly
    cannot deal with this privately. I will have to be engaged with
    you and your colleagues here, because I am mindful that there
    are basic infrastructure needs in all 50 States and
    territories. But the language that we have submitted in this
    document would give the Department some flexibility based on
    needs, not just on population.
        Senator Leahy. I understand. But on that flexibility, you
    have to understand that a lot of smaller States and rural areas
    are concerned because, one, it shows there is no guarantee that
    they will get anything. And secondly, when the President had
    proposed an $805 million cut in funds for the Office of
    Domestic Preparedness, those are programs that directly benefit
    the police, fire and medical rescue units, you put that
    together with the fact of this safety net for smaller States is
    gone, at the same time of an 18.4 percent cut in funds for the
    Office of Domestic Preparedness, $805 million is there.
        You have the Hart-Rudman Terrorism Task Force report saying
    that we are going to almost $100 billion short of meeting
    critical emergency responder needs through this decade's end,
    if these current fundings are going on. You know, if I am a
    Governor--and you have been a Governor; I have not--if I am a
    Governor, I am going to be asking how is my State first
    responders going to be able to fulfill the mandates coming from
    Washington when the President is proposing to decrease, not
    expand, but decrease the money, expand the amount that is
    required.
        I mean, every time we go up to orange alert or whatever,
    the requirements go up. Every time there is even a regional
    threat, the requirements go up.
        What is being asked of these State and local groups goes up
    all the time, but the money is going down. And even the
    guarantee of what money was there within the budget is now
    gone. If you were a Governor of one those States, you would be
    kind of worried.
        Secretary Ridge. Senator, first of all, I would say to you
    that the President's commitment in the 2005 budget to first
    responders' dollar amount in terms of the budget proposal is as
    strong as it was in 2004. The difference that we are talking
    about are the additional funds that Congress added to the
    President's request. So I think we need to understand that the
    President----
        Senator Leahy. Well, not really, if I might.
        Secretary Ridge. Well----

                            FIRST RESPONDER FUNDING

        Senator Leahy. This fiscal year, Congress appropriated $4.2
    billion for first responders and homeland security needs. We
    are a lot more alert since then, but the administration has
    proposed a $3.5 billion package for fiscal year 2005 that cuts
    the Fire Act and grants programs to State and local areas. And
    you have put that along with the President's opposition to
    using Federal dollars to hire fire and rescue, even though we
    know what that was like on September 11 at the World Trade
    towers or over here at the Pentagon.
        No, I do not say that you could say the commitment is still
    there. The cuts are there; the commitment is not.
        Secretary Ridge. Senator, we arrive at differing
    conclusions based on the same figures. Maybe that is the
    trouble with the new math.
        Senator Leahy. Oh, the figures are less.
        Secretary Ridge. If I recall correctly, and I will stand
    corrected, Senator, but by and large, if you take a look at the
    request in 2004 for the fire grants and admittedly, we have
    shifted some money from one pool, the State direct funding
    grant, to the urban area security initiative, but by and large
    the President's request is close to what it was in 2004. The
    Congress added additional money. And I think that is what you
    are referring to as a cut. But the President's commitment, in
    terms of his budget request, is nearly the same as it was in
    2004.
        Senator Cochran. The time of the Senator has expired.
        Senator Leahy. Thank you. I will submit further questions,
    if I might, for the record. And I applaud you for holding this
    hearing. I think it is going to be a subject of more than a
    little discussion in this committee.
        Senator Cochran. Thank you, Senator.
        Secretary Ridge. Yes, it is.
        Senator Cochran. Senator Kohl.
        Senator Kohl. Thank you, Mr. Chairman.

                        CANCELLED INTERNATIONAL FLIGHTS

        Secretary Ridge, I would like to return to the question of
    those canceled flights----
        Secretary Ridge. Yes, sir.
        Senator Kohl [continuing]. Of which I believe there were 13
    from France, Britain, and Mexico. In one case, British Airways
    flight 223, as you know, was canceled four times. Evidently,
    this was done because of specific information that our
    intelligence community obtained about potential threats on
    board these flights.
        Common sense would suggest that when we have detailed
    information about a particular flight, then heightened
    screening measures could ensure that no dangerous instruments
    be taken on board these flights which might allow individuals
    to hijack. Was cancellation the only option?
        Secretary Ridge. As we discussed the threat with the
    airlines, and it was an ongoing discussion through that entire
    period, it turned out from everyone's point of view to be the
    best option.
        Senator Kohl. Does this imply that screening procedures in
    other countries are inadequate?
        Secretary Ridge. Well, since that time, and even prior to
    that time, Great Britain and to that extent France have
    significantly, I do not want to say improved, because they had
    a high level of screening to start with. But it is far more
    intense than it has ever been.
        But there was some concern in the public discussion, about
    our preference to use air marshals. And that those kinds of
    requests need to be vetted. We use thousands of them. Other
    countries do not provide that kind of security in such a robust
    or comprehensive fashion that we do.
        So again, as we explored options to deal with the threat,
    it was decided by the airlines, they thought their best option
    was to cancel the flights. And we agreed with them.
        Senator Kohl. Well, what kind of security can be
    instituted, for example, to protect against biological or
    chemical kinds of threats on an aircraft?
        Secretary Ridge. Well, you highlight from my perspective,
    Senator, probably one of the most effective. And that is far
    more rigorous and intense screening. And I think under the
    circumstances that was certainly an option that they were
    prepared to consider.
        I think in time, as we develop the technology of detection
    and put it aboard different modes of transportation, that will
    ultimately advise us that an attack has occurred, but will
    obviously not have given us the capacity to prevent the attack.
    And I think probably the most important focus that we should
    have with regard to aviation security, mindful of the need to
    identify weapons, but we should be more focused on the
    individuals who might be carrying the weapons. I mean, that is
    at the heart of the CAPS II Program that we want to use for
    domestic aviation purposes.

                            TECHNOLOGY OF DETECTION

        So additional screening, yes, I believe the international
    standards, particularly among our allies in Europe. And they
    have really ramped up their screening, but not everybody has
    done that internationally. One of the first series of grants we
    sent out through the department was to identify the technology
    of detection that would enable us to--we would be advised that
    an incident had occurred. And we would obviously have to
    respond to it as quickly as possible. But it is still not to a
    point where we can put it in any form of transportation.
        And until such time, the most important thing for us to do,
    while we continue to focus on weapons, continue to have people
    go through metal detectors, continue to search through the
    contents of the carry-on luggage, continue to screen the
    luggage that goes in the hold, the most important focus should
    be the individuals and the likelihood that they would be a
    terrorist.

                        SCREENING FOR BIOLOGICAL WEAPONS

        Senator Kohl. You must know the answer to this question. Do
    we have the capacity to screen for biological weapons?
        Secretary Ridge. We do not have the technology yet
    available to do that. We are looking for it. Right now----
        Senator Kohl. So that--not necessarily in the case of those
    canceled flights, but generally speaking, when it comes to
    biological weapons, it then becomes a determination as to
    whether or not the individual----
        Secretary Ridge. Correct.
        Senator Kohl [continuing]. Is somebody that might be
    suspected or capable of taking a biological weapon on a plane.
    And that might cause a cancellation----
        Secretary Ridge. Correct.
        Senator Kohl [continuing]. Not the screening, because we do
    not have that capacity right now.
        Secretary Ridge. Correct. It is a high priority for the
    Department in terms of its research and development. But right
    now, we have to rely on individual screeners. And we have
    certainly, since the Department has been created, discovered
    from interrogation of detainees, training manuals, and other
    sources, means of, potential means of, delivery of those kinds
    of weapons or ingredients. The screeners are aware of them. But
    it still comes down to the capacity of the screener to, again,
    funnel that information, take a look at what is being carried
    on or what is located in the suitcase and make a determination
    that it needs to be pulled out and examined. And we do not have
    the technology to assist the screener yet.
        Senator Kohl. Okay. Do I have time for one more question?
        Senator Cochran. The Senator does have time for one more
    question, yes.
        Senator Kohl. Thank you.

                              FRAUDULENT DOCUMENTS

        Secretary Ridge, initially we were told that all September
    11 hijackers entered the country legally, many of them on
    student visas, then disappeared into the shadows of our society
    to avoid detection. But now the independent commission is
    telling us that many of the hijackers could have, or probably
    should have, been stopped at the border prior to entering.
        It turns out that a number of the hijackers had fraudulent
    visas or lied on their applications. Apparently, immigration
    inspectors, whether it was because of insufficient resources or
    training, lacked the ability to catch these terrorists before
    they entered the country. Recognizing that there is a problem
    here, what is being done to train our INS inspectors to enable
    them to spot fraudulent and deficient visas in order to stop
    potential terrorists at the border?
        Secretary Ridge. Senator, you raise a very significant
    problem in the international community generally. That is one
    of fraudulent documents, whether they are using them to verify
    their existence here in the United States with fraudulent
    social security cards or driver's licenses or whether they are
    using them to come across our borders with visas and passports.
        Number one, there is, I think, very significant training
    that has been required and provided to the men and women at our
    ports of entry. Number two, the Congress has told us that we
    need an entry-exit system so we can mark the arrival, as well
    as the departure of people coming into the country. That is
    part of the US VISIT protocol, where, by using facial
    identification and fingerprint scans, we have already reviewed
    about a million people coming into the country, and we have
    sent over 100 people back. We did not allow them to enter
    because of information we had on the database; not necessarily
    because they were terrorists, but because there were other--
    basically, it was a criminal reference.
        That same kind of identification protocol will be employed
    in consular offices by the end of this year, the photographs
    and the fingerprint scans, so at least we can make sure that
    the folks that receive the passport are the ones who are
    checking in with the passport when they try to come into the
    country. So you take that, you couple it with additional
    training to look for fraudulent passports, we have
    substantially improved that capacity. But we have to be forever
    vigilant.
        I must tell you that on a fairly regular basis, Senator--
    and I get a daily report from Customs and Border Protection. We
    have, on a fairly regular basis, these very, very dedicated men
    and women at the border turn folks away because of the
    fraudulent nature of their visa or their passport. They do not
    pretend to say that they catch them all. But their antenna is
    up, and they are as sharp as we want them to be. We continue to
    give them information as to what to look for.
        You know, from time to time, we discover that other
    countries have had passports stolen. We work with those
    countries to get identifying characteristics on those
    passports. That information is pushed down to the ports of
    entry.
        So again, it is a continuing process of education,
    vigilance. I think the US VISIT Program is going to help us
    quite a bit, as well.
        Senator Kohl. Thank you, Mr. Secretary.
        And Mr. Chairman, I will submit my questions for the
    record.
        Senator Cochran. Thank you, Senator Kohl.
        Senator Craig.

                        IMMIGRATION AND BORDER SECURITY

        Senator Craig. Mr. Chairman, on a variety of questions, I
    will submit them for the record so the Secretary can respond. I
    want to focus just in one area.
        And I apologize, Secretary, for being late for your
    testimony. But during the questioning, I have had an
    opportunity to read it, and I appreciate it.
        Let me focus only on one area now and that is the issue of
    immigration and securing our borders. And I am very pleased
    that our President is now leading on that issue as it relates
    to an undocumented workforce in this country. I say that
    because my State and many States across the Nation need that
    workforce.
        Without question, there is a need in our economy for six or
    eight million foreign nationals to be here working and
    receiving good pay and doing services that our own citizens
    choose not to. So it is so important that we make this system
    work.
        I think one of the unknown consequences of border security
    post 9/11, while we were intending to lock people out, we
    locked a lot of people in who were moving back and forth across
    our borders, providing services, going home to their loved
    ones, and because of now the toughness at the border, choosing
    to stay in because they cannot, once get out, come back. And in
    my State of Idaho, at the peak of the agricultural season, we
    may have anywhere from 19,000 to 20,000 undocumented. I have
    some legislation in that area now that we are working on.

                              UNDOCUMENTED WORKERS

        But here is what I have found and where my question takes
    me today in dealing with local law enforcement and undocumented
    workers. I see you are going to hire some more agents. Well, we
    have gone from 3,000 to 10,000 at the border. And we have begun
    to stem the tide of an undocumented workforce. We arrested over
    800,000 last year and deported them, and there are millions
    within the country. Why? Because of what is here for them to do
    and to make money and to go home to their loved ones, if they
    can, or to stay here.
        In one county of mine, the county sheriff tells me that he
    arrested or apprehended over 1,200 undocumented workers. That
    was borne by county taxpayer expense. They were jailed at
    county taxpayer expense. Let me suggest to you that it is my
    experience, in having focused on this issue for the last 5
    years, that the National Immigration Service and now the new
    service is relatively inadequate in being able to effectively
    find undocumented workers. But I know who does, local law
    enforcement.
        Now I would suggest to you that you review your idea of
    hiring more agents and you concentrate on cooperative
    partnerships with local law enforcement, maybe with some
    assisted training. As it relates to their normal course of law
    enforcement, they are the ones who find, in most instances, the
    undocumented workers or the undocumented foreign nationals in
    this country. And some may be certainly people of bad
    reputation. Others are simply here to work.
        Also, I would suggest, and you just got into the business
    of talking about fraudulent documentation. And I understand
    here you talk about providing certain deterrents to the
    employers as an incentive to maintain a legal workforce. That
    is legitimate when the documentation is legitimate.
        But to find a person whose livelihood would be destroyed
    because they cannot find the work and they hire foreign
    nationals who have documentation to do their work, to harvest
    the food that goes onto the shelves of America, and then to put
    them at risk because they accepted the documents that were
    available, you see where I am going, it becomes the ultimate
    catch-22.
        And so I am proud of what the President is doing. I know it
    is highly controversial. I happen to disagree a little bit on
    the fine points of the issue. But he has been willing to step
    up and address the issue, the 8 to 12 million undocumented that
    we have in this country and the laxness and the slackness that
    we have had at our borders for decades.
        But having said that, reform is at hand. And you are
    leading that. And I greatly appreciate it. But I would suggest
    that if the answer is simply to hire more Federal agents, why?
        The biggest thing that I have been frustrated with over the
    years is that when you had drug apprehension or all of those
    other kinds of things, and every agency developed its own
    police force--and out in my State, the Forest Service, they had
    to have law enforcement. BLM had to have law enforcement.

       COOPERATIVE LAW ENFORCEMENT WITH LOCAL ACCOUNTABLE LAW ENFORCEMENT

        Well, I know what they used to do. They used to develop
    cooperative law enforcement agreements with local accountable
    law enforcement. And that is where the rubber really hits the
    road on a daily basis. And I think that it is not only cost
    effective, but with right and reasonable training, it can be
    phenomenally responsive for a lot less cost.
        That is an observation. I have no questions, Mr. Chairman.
        But I would ask you, Mr. Secretary, to take a comprehensive
    look at that. We have some legislation moving now. I would lots
    rather see you take the initiative now and begin to get it on
    the ground, because our counties are experiencing a lot of
    costs in those hot areas of high intensity undocumented
    workers. And often, it is they who pick up the phone and call
    the INS and tell them: Hey, here are your people. Come get
    them.
        Secretary Ridge. Thank you, Senator. I would look forward
    to having that, continuing this discussion privately, because
    however this plan evolves, it will only be effective if the
    right level of resources are given to the right people in order
    to enforce it. And our limited experience with collaboration
    with the States, in terms of apprehension and detention of
    illegal aliens, has been mixed. Some States are willing to do
    it; other are not.
        Part of the reason may be philosophical. Others may be
    fiscal. Either way, you have 650,000 men and women in local law
    enforcement that should be viewed as a potential asset and
    resource in enforcing the new law, whatever it might be.
        Senator Craig. Thank you.
        Mr. Chairman, thank you.

                      COAST GUARD OFFSHORE PATROL CUTTERS

        Senator Cochran. Thank you, Senator Craig.
        Mr. Secretary, one of the responsibilities that the
    department has is the United States Coast Guard operations,
    particularly for patrolling our coasts and ports, contributing
    to our security of the homeland in that way. The budget request
    includes $26.2 million to support the operation of five patrol
    coastal cutters that are being transferred to the Coast Guard
    from the Navy. My question is whether your office, and you
    personally, have information that will let us know what the
    time frame is for the Coast Guard receiving these patrol
    coastal cutters from the Navy and whether there is funding that
    is sufficient in this budget request to convert the Coast Guard
    cutters into mission-capable boats for the operation of the
    missions that are required.
        Secretary Ridge. Senator, I believe that the deployment
    decision with regard to those five vessels should be
    forthcoming in the next month or two. I know that they are
    looking at two. They are looking to just narrow the gaps in
    existing coverage. I know one of the venues they are looking at
    is in Mississippi. I dare not speak for the Commandant. But
    there is an interest in distributing those five cutters in two
    different ports.
        They certainly are going to maintain their capability. I
    think we have sufficient resources once they are deployed to
    use them effectively. But the decision as to when and where
    they will be deployed, I believe, is in the next 4 to 6 weeks.

                             ALTERATION OF BRIDGES

        Senator Cochran. One of the other counts in the Coast
    Guard's budget request of interest to some of us is in the
    funding for alteration of bridges. There is no funding in this
    budget request that would permit the Coast Guard to carry out
    its responsibility of removing obstructions to commerce on
    navigable waters. There is a backlog of work that needs to be
    done to help ensure the safe navigation of rivers and ports. It
    is my hope that your office will take a look at that and let us
    know what funding may be useful to the Coast Guard to continue
    certain bridge projects that are already under way but which
    are not fully funded in this budget request.
        It forces this committee to add funds to help ensure the
    navigability of waters of the United States. So it is something
    that has to be done, it seems to me. And working with your
    office or with the Coast Guard, getting some indication of what
    that funding level ought to be would be very helpful to us.
        Secretary Ridge. Senator, we will certainly acknowledge
    your inquiry and get back to you as quickly as possible. I do
    not know what the Coast Guard's plans are to continue to remove
    these navigational obstructions or to make those kinds of
    adjustments in ports. I need to get back to you in response.
        [The information follows:]

                             Alteration of Bridges

        The Coast Guard's Alteration of Bridges request is zero in fiscal
    year 2005, because obstructive highway and combination railroad/highway
    bridges are eligible for funding from the Federal Highway
    Administration's Federal-Aid Highway program. It is estimated that a
    total of $15.1 million is needed to complete the three Truman-Hobbs
    bridge alteration projects actively under construction: the Florida
    Avenue Bridge in New Orleans, Louisiana; the Sidney Lanier Bridge in
    Brunswick, Georgia; and, the Limehouse Bridge, in Charleston County,
    South Carolina. All three of these bridges are highway bridges. In
    addition, there are five bridge projects with completed designs for
    alteration: the Burlington Northern Santa Fe Bridge in Burlington,
    Iowa; the Burlington Northern Santa Fe Bridge in Fort Madison, Iowa;
    the Chelsea Street Bridge in Boston, Massachusetts; the EJ&E Bridge in
    Divine, Illinois; and, the CSXT (14 Mile) Bridge in Mobile, Alabama.

               NATIONAL CENTER FOR MISSING AND EXPLOITED CHILDREN

        Senator Cochran. Okay. The Secret Service, as we know, has
    responsibility for monitoring counterfeiting and investigating
    counterfeiting of our currency. It has the National Center for
    Missing and Exploited Children, as well. The budget transfers
    funding for the national center from the Secret Service budget
    to the Bureau of Immigration and Customs Enforcement. The
    question I have is: We want to be sure this does not hinder the
    Service's ability to provide support for the center.
        If we could have an indication that the funds that are
    being transferred will support the Secret Service's mission,
    that would be helpful.
        Secretary Ridge. Senator, I feel confident in telling you
    that the transfer of the responsibility to ICE was done in
    consultation with the Secret Service. It has been at the hub of
    their new initiative called Operation Predator. And we will
    give you the confirmation that you seek in writing.
        [The information follows:]

        Grant Funding for the National Center for Missing and Exploited
                                    Children

        The President's budget proposes that the funding for a $5,000,000
    grant for the National Center for Missing and Exploited Children
    (NMEC), which in fiscal year 2004 is funded in the U.S. Secret
    Service's appropriation, be placed in fiscal year 2005 in an
    appropriation to U.S. Immigration and Custom Enforcement. In fiscal
    year 2004 this grant will be made available by the U.S. Secret Service
    to the NMEC for activities related to the investigations of exploited
    children. Transfer of this grant funding to the ICE does not affect the
    Service's support for the Center for Missing and Exploited Children.
    The Service will continue to provide forensic and other related support
    to the NCMEC.

        Senator Cochran. Thank you.
        Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman.

                           AMNESTY FOR ILLEGAL ALIENS

        Mr. Secretary, you indicated earlier that you are not
    prepared to give us estimates on the cost of the implementation
    of the President's principals on amnesty for illegal aliens.
    Are you in a position to have some indication of how many more
    agents would be transferred from security and enforcement to
    carry out the President's plan?
        Secretary Ridge. Senator, I do not at this time. Your
    colleague, Senator Craig, suggested in a colloquy that we just
    had, however, that we might want to consider, whenever that
    plan is enacted, the use of State and locals and support them
    in that effort rather than additional enforcement officers at
    the Federal level. I suspect it will end up being some measure
    of both. Because whenever the initiative is passed, enforcement
    is a critical piece of it. But we just cannot give you those
    specific numbers of either people or money at the present time,
    Senator.
        Senator Byrd. I believe you indicated, in response to an
    earlier question, that you did not anticipate any supplemental
    requests from the department.
        Secretary Ridge. At the present time, Senator, we do not.
        Senator Byrd. So, how does this play into the amnesty
    proposal, if we do not anticipate any supplemental? If we do
    expect any legislation on the President's proposal, what do you
    think might be the situation with regard to a supplemental?
        Secretary Ridge. Senator, first of all, I was here back in,
    I think it was, 1985 or 1986 as a Member of Congress when we
    went through this issue before. And as you and I are well
    aware, back then amnesty and those folks were able to just
    assume, I think, a different position even in terms of their
    own citizenship. There is a little bit difference, there is a
    significant difference, between what the President wants to do
    in this program and what we did in the past.
        But in any event, we are going to need substantial
    resources to enforce it. And I am still not in a position,
    Senator, until we better understand Congress' will and the
    requirements or mandates that you may impose on the department,
    what the final dollar amount will be.

                                    CAPPS II

        Senator Byrd. The department has been making preparations
    to implement CAPPS II, a new information system for screening
    airline passengers to determine if a passenger is a security
    risk prior to their boarding an aircraft. Based on our staff
    discussions with the department on the status of CAPPS II, we
    have very real concerns that the department has not made
    sufficient progress in meeting their criteria and addressing
    concerns that we all have.
        What are your plans for this system? How do you believe
    that you have met the requirements of the law for deployment of
    this important system?
        Secretary Ridge. Senator, first of all, I would welcome,
    either by letter or personal conversation with you or your
    staff the specific concerns that you have with the CAPPS II
    program. Secondly, it is our intention, Senator, to test, to
    begin testing the program sometime later this year. There have
    been some delays associated with the testing, as we have dealt
    with some of the privacy issues associated with the use of
    name, address, date of birth, and other passenger name records
    that we would use as part of the database to get the program
    off and running.
        We have reached agreement with the European Union that we
    can use their passenger name records as part of our testing
    protocol. And we are trying to allay the legitimate concerns of
    members of Congress and the public generally that the
    information at our disposal will be for a very specific and
    very limited use. And it will enable us to target potential
    terrorists on the other side and enable us, we think, probably
    to reduce the amount of secondary screening and reduce the
    inconvenience and the delays at our commercial airports.
        So I do not know the specific objections you have raised.
    One of the insertions into the Homeland Security Act from
    Congress was the insistence that we have a privacy officer. And
    Attorney O'Connor and her staff have been working on these
    privacy issues, working with me to convince the European Union
    that the information would be for a very limited and restricted
    use. And we need to convince members of Congress and the
    traveling public that it will be for a limited and restricted
    use, as well.
        Senator Byrd. Our concerns are detailed in the fiscal year
    2004 Homeland Security Appropriations Act. Our concerns are
    that the department has not yet addressed the requirements of
    the law.
        Secretary Ridge. Well, part of it may be our need to--we
    may have a difference of opinion on this, Senator. We certainly
    would look to secure bipartisan support for this test so that
    we could add an additional layer of protection to passenger
    travel. We have spent enormous sums of money, and very
    appropriately so, when we targeted commercial aviation, toward
    detecting weapons.
        And while I think we need to maintain our focus on weapons,
    I think ultimately, as we combat terrorism, the primary focus
    should be on those who might carry the weapons, trying to
    identify the terrorist or potential terrorist rather than the
    weapon that he or she may be carrying. And I think the CAPPS II
    program gives us an opportunity in part to do just that.

                         OVERDUE CONGRESSIONAL REPORTS

        Senator Byrd. In the fiscal year 2004 Homeland Security
    Appropriations Act and associated reports, the Congress
    directed the department to report to the committee on important
    issues ranging from the protection of critical infrastructure,
    hiring issues surrounding intelligence analysts and
    cybersecurity specialists, developing an inventory of the
    research and development work being done by department elements
    other than the Office of Science and Technology, and in
    preparing a report on the effectiveness of the homeland
    security advisory system, including efforts to tailor the
    system so that alerts are raised on a regional rather than
    national basis.
        To date, the department has delivered only 14 percent of
    the mandated reports. It seems that for an issue as sensitive
    as the security of our homeland, the Department would want to
    have an informed Congress as an active participant in the
    policy process. Is it your view that this committee should
    expect these reports to come along soon?
        Secretary Ridge. Senator, I certainly hope so. To put it in
    context for you, Senator, we have sent quite a few up. But GAO
    alone, GAO alone has asked the department to submit information
    for 420 reports. That is in addition to probably 2,500
    congressional inquiries. That is in addition to a lot of the
    other work that we are doing to try to keep, as you very
    appropriately point out, to keep our colleagues in this effort,
    because we are partners in building this department, keep
    everybody informed.
        While I regret the delay, and I am trying to explain it,
    not excuse it, but we are doing our very best we can to get to
    GAO and to the members the information they have requested. And
    we will do everything we can to expedite it for you, Senator.
        Senator Byrd. Well, I hope you will do that. The GAO, as
    you well know, is an arm of the Congress. I am sure that the
    information that the GAO is seeking is of great importance to
    the Congress. We just do not act as a rubberstamp for the
    administration. We hope to be a partner in the effort.
        Secretary Ridge. Well, Senator, we respect the inquiry. As
    I said before, we fully intend to comply. It is just some of
    these reports require hundreds and hundreds of man hours to get
    the information and get it back to you. And we will do our best
    to expedite it.
        Senator Byrd. Do I have time for another question?
        Senator Cochran. Yes, sir.

                              PLAN FOR ADJOURNMENT

        Senator Byrd. Incidently, what is the Chairman's plan as to
    proceeding further and whether or not we will have another
    opportunity to have Secretary Ridge before us?
        Senator Cochran. Senator Byrd, our plan was to adjourn the
    hearing at 12:30 today. We were going to have hearings with
    other under secretaries and others who have jurisdictional
    responsibilities in the department. If there are other
    questions that need to be submitted, we have an opportunity to
    submit them in writing. But I have not discussed with the
    Secretary another hearing with him personally, but we would be
    glad to do that, if that is your request.
        Senator Byrd. Very well. I hope we might at least think in
    terms of possibly hearing the Secretary again, if there needs
    to be. I understand that we will have other opportunities with
    other witnesses. And so, the questions that we have in mind may
    be asked and answered there.
        Incidently, Governor, in an earlier conversation relative
    to the title of governor, do you remember?
        Secretary Ridge. Yes, sir. Yes, I do.
        Senator Byrd. Well, my history taught me that in the
    colonies and in the States, the people did not think too much
    of their governors. Is that your recollection?
        Secretary Ridge. No, it is not, sir.
        Senator Byrd. I think you might fail a history test. Maybe
    you should go back and review that a little bit.
        Secretary Ridge. I will, Senator.
        Senator Byrd. They did not have much use for the royal
    governors. Do you remember?
        Secretary Ridge. Yes, sir, I do.
        Senator Byrd. They were much more dependent upon and
    confident in their elected assemblies than they were of their
    governors. Pennsylvania was one of those early States, I
    believe, too. I believe it was one of the 13, was it not?
        Secretary Ridge. It was the second State, Senator.
        Senator Byrd. All right. Well, I just have one more
    question, Mr. Chairman.

                                FIRST RESPONDERS

        Others have touched upon this. Local police, firefighters
    and emergency medical teams are a community's first line of
    defense. But they seem to be almost the last priority for the
    President in his budget. Now others have touched upon this,
    which indicates that there is a widespread concern with respect
    to the first responders, and the fact is that trickle-down
    theory that we have heard so much about in many other respects
    is not working too well in this situation.
        Cuts come despite continued warnings, cuts in these local
    responders' budgets. From think tanks, commissions, and from
    first responders themselves come these warnings, that our
    Nation is not adequately prepared to respond to another act of
    terrorism. How do you justify these cuts?
        Secretary Ridge. Senator, if I could put the predictable
    and, I think, understandable attention that you and all of
    Congress and first responders put on the notion of additional
    money to support their mission. If Congress sees fit to, at the
    minimum, appropriate to first responders the dollars requested
    in the 2005 budget, this Administration and this Congress will
    have made available to State and local first responders nearly
    $15 billion over the past 3 years. This year's grant fire grant
    is $2 billion. It has been delivered directly to firefighters.
        The President's budget this year, as I mentioned to Senator
    Leahy, is a total amount very nearly identical to the amount of
    money the President requested back in 2004. Obviously, the
    Senate and the House chose to rearrange the priorities, which
    is certainly their prerogative because you do have that power
    of the purse, and actually gave to the first responders more
    money than was requested.
        But I do think that the President's commitment has been
    strong. And it has been consistent throughout the years. This
    year we are altering or seek congressional support of altering
    how those dollars are distributed. But I would say to the
    Senator that the President's commitment has been consistent and
    across the board to support the first responders at a very
    significant level of funding.
        Senator Byrd. There are billions of dollars, as you would
    agree, in the pipeline for first responders that have not been
    spent. We continue to hear complaints that come up from these
    people who were the first on the scene. That is why we have put
    the strict time lines on the Office for Domestic Preparedness
    and on the states to get the money to the first responders
    where it is needed. I hope that we will do a better job of
    getting the monies to these first responders.

                          FUNDING FOR FIRE DEPARTMENTS

        The fact is, according to FEMA, only 13 percent of fire
    departments have the equipment and training to handle an
    incident involving chemical or biological agents. Fire
    departments have only enough radios to equip half the
    firefighters on a shift and breathing apparatuses for only one-
    third. How do we justify a 33-percent cut to fire grants?
        Secretary Ridge. Senator, two parts to your question. You
    are absolutely right, Senator. The Congress mandated that the
    Department of Homeland Security be prepared to distribute the
    dollars you appropriated within a time certain. We are prepared
    to do that. I think it was a 45-day period. We are ready to do
    that.
        Where we need to take a leadership role, and we would
    rather not mandate it, I would rather work with the Governors
    and the mayors to come up with a distribution scheme that
    everybody is comfortable with. Right now, the distribution of
    these proceeds varies from State to State, Senator. We are
    ready to send the checks out. Most of the logjam is in the
    collaboration between the cities and the States and their
    applying for the money.
        We will take it upon ourselves in this department to try to
    work with our partners, because they are partners in this
    effort, to see if we can come up with a distribution scheme so
    that when we hit that time table to distribute the dollars, I
    am confident Congress will also mandate that in the 2005
    budget, that we can get them out quicker to the first
    responders.
        It is not your Department of Homeland Security. We are
    ready to distribute. But the logjam really is in the
    communication and collaboration at the State and local level. I
    do not mean to repeat myself. I apologize. But I had planned on
    meeting with the Governors, when they are in town in about 2
    weeks, to address this question specifically. It is out there.
    We still have a few dollars left from 2002, more than half the
    dollars, I think, left from 2003. We have to get this money out
    the door.

                           PROCUREMENT POLICY ISSUES

        Part of it, I think, is tied up in procurement policies,
    Senator. By the way, West Virginia, when I visited your first
    responders down there, have taken a regional approach toward
    building capacity around their States, so that not every
    community has the same thing. But within regions, they have
    built the same capacity. And that is obviously an approach that
    I think is the right way to go. I cannot tell you whether or
    not they have any problems with distributing the dollars. I
    suspect that they are not. But they have taken a regional
    approach. And we want to see if that could be part of the
    answer to breaking the logjam to getting these dollars to our
    first responders.

                    URGENCY TO GET FUNDS TO FIRST RESPONDERS

        Senator Byrd. Well, I thank you, Mr. Secretary.
        Mr. Chairman, you recall that we had hearings in this
    committee last year, the year before. Every time, we have these
    hearings and, in the meantime, we hear from these first
    responders that the money that Congress appropriates seems to
    be taking an awfully long time to get to them. They have taken
    the position all along that they need the money. They need to
    find a way to get it directly to them without all of the
    trickle-down apparatuses that are in between and which have a
    way of slowing down the delivery of these funds that Congress
    takes a very great interest in bringing to the attention and
    into the hands of these responders.
        I am glad that there seems to be a greater sense of
    urgency, as I listen to the Secretary. I hope that that will
    carry through and that these people at the local level who are
    the first people to respond will see the results of this
    greater sense of urgency.
        I hope, Mr. Secretary, that you will continue to press to
    get this money out the door and to these people who are on the
    job. Thank you.
        Thank you very much.
        Secretary Ridge. Thank you, Senator.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Cochran. Thank you, Senator Byrd.
        Mr. Secretary, we appreciate your cooperation with our
    subcommittee. Senators may submit written questions to you, and
    we ask you to respond to them within a reasonable time.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                  Questions Submitted by Senator Thad Cochran

               Information Analysis and Infrastructure Protection

                       HOMELAND SECURITY ADVISORY SYSTEM

        Question. The Homeland Security Advisory System has evolved from a
    nationwide threat level status to more specific targeted areas since
    the latest threat level decrease in January. While the threat level is
    currently at an ``Elevated Condition'', which is declared when there is
    a significant risk of a terror attack, our country's airports, aviation
    industry, and specific high threat cities remain at the ``High
    Condition'', the threat level that indicates a high risk of terrorist
    attacks. This more targeted threat level status helps focus limited
    resources on the most credible threat areas and at the same time allows
    security personnel and first responders in other parts of the country
    to ``stand down'' while remaining vigilant.
        What further enhancements do you envision for the Homeland Security
    Advisory System with the improvement of intelligence detailing specific
    terrorist threats for certain metropolitan areas and specific sectors
    of industry?
        Answer. With each raising and lowering of the Homeland Security
    Advisory System (HSAS), the Department of Homeland Security learns new
    lessons and improves its notification process. As the system has
    evolved, it has come to reflect the need for certain metropolitan areas
    and/or specific areas of industry to be notified at different times or
    at different levels than others. As such, DHS has become adept at
    providing information to such specific audiences as states and sectors
    through Homeland Security Information Bulletins and Advisories.
    Additionally, Department officials speak personally with
    representatives and officials of threatened states and industries, when
    the need arises. This personal communication, along with the ability of
    the system to allow DHS to communicate to certain areas what their
    alert level should be embody the enhancements that have been
    implemented thus far.
        Question. What steps are being taken by the Department's
    Information Analysis and Infrastructure Protection Directorate to
    notify Congress and other key members of the Administration before a
    change in the Homeland Security Advisory System threat condition is
    announced publicly?
        Answer. Key congressional members are notified telephonically when
    a decision has been made to raise the threat level and, circumstances
    permitting, before the public announcement is made. Members notified
    are: the Speaker and Minority Leader of the House, the Majority leader,
    Minority leader and President pro tem of the Senate, the Chair and
    ranking member of the House Select Committee on Homeland Security,
    Senate Governmental Affairs Committee and both House and Senate
    Homeland Appropriations Subcommittees.
        Due to the tight timeline typically surrounding the announcement of
    alert level changes, the list of those personally notified in advance
    is necessarily limited to Congressional leadership and leadership of
    the committees of appropriations, and committees of overarching DHS
    authorization. Normally the scheduling of these calls will involve
    notification of key staff as well, but in those cases where it might
    not, DHS Office of Legislative Affairs (OLA) will make telephonic and
    e-mail notifications at the same time.
        Notification includes the change, when it is expected to be
    announced and the non-classified context in which the decision was
    made. If a member cannot be reached, their most senior staff member
    available is informed on their behalf. Notifications are made by Senior
    DHS Officials, typically the Deputy Secretary, Under Secretary for
    IAIP, and the Under Secretary for BTS. DHS callers may vary depending
    on operational circumstances but calls will not fall below the
    Assistant Secretary level. DHS, in concert with CIA and FBI will
    schedule a classified, Members only intelligence briefing as soon as
    possible after the announcement. If the change occurs when the Congress
    is in recess, a similar briefing is provided to relevant staff
    directors.
        When the threat level is reduced, DHS OLA notifies key
    congressional staff including staff of the Speaker and Minority Leader
    of the House, the Majority leader, minority leader and President pro
    tem of the Senate, the Chair and Ranking Member of the House Select
    Committee on Homeland Security, Senate Governmental Affairs Committee
    and both House and Senate Homeland Appropriations Subcommittees so that
    they may, in turn, inform their members before a formal announcement is
    made.
        Despite these efforts at advance notice, the Department must in
    each case make arrangements with the media prior to the Secretary's
    announcement of the change in the threat level, in order to fulfill the
    DHS responsibility to properly notify the public. As such, DHS is not
    able to control media and public speculation regarding the nature of
    DHS announcements up to the scheduled time of the press conference.

                                 CYBER SECURITY

        Question. The National Cyber Security Division as part of the
    Department's Information Analysis and Infrastructure Protection
    Directorate recently unveiled the National Cyber Alert System which
    intends to deliver information to home computer users and technical
    experts in business and government agencies to better secure their
    computer systems from the latest computer viruses.
        How would you rate the performance of the new National Cyber Alert
    System's response to the most recent computer virus outbreaks,
    including the ``MyDoom'' virus that affected not only computers
    worldwide but also computers within the Federal Government?
        Answer. I would rate the response to the National Cyber Alert
    System as positive, but not good enough. On the first day of NCAS
    launch, the Department's United States Computer Emergency Readiness
    Team (US-CERT) was bombarded by more than one million hits from would-
    be subscribers. More than 250,000 direct subscribers rely on the
    National Cyber Alert System to maintain their cyber vigilance and an
    additional estimated one million additional users receive national
    cyber alerts and information products indirectly through relationships
    with the Information Technology Association of America, various
    industry associations, the Stay Safe Online program, and others.
        NCAS is new and will continue to evolve and improve over time.
    Importantly, the National Cyber Alert System is but a small portion of
    the work being done within the Department's IAIP Directorate, both to
    prevent incidents and in response to specific events in cyberspace. In
    partnership with the Computer Emergency Response Team Coordination
    Center (CERT-CC) at Carnegie Mellon University; my department works
    with over 150 cyber security experts from across the Federal
    Government; and collaborates with key elements from the Departments of
    Justice, Defense, Treasury, Energy, and State; the FBI and the
    Intelligence Community; and the private sector to prevent, respond to,
    manage, and recover from cyber incidents.
        Question. The Department's new initiative ``Live Wire'' will test
    civilian agencies' security preparedness and contingency planning by
    staging cyber attack exercises to evaluate the impact of widespread
    computer disruptions. Recent instances, such as the power outages in
    the Northeast this past August, are an example of how an attack on our
    critical infrastructures, such as a cyber attack by terrorists on our
    Nation's utility industry, could cascade across a wide region if the
    proper precautions are not taken immediately.
        Does the Department currently test the vulnerabilities of computer
    systems in the government and private sector to simulate a terrorist
    attack on the Nation's cyber infrastructure and if so, how will ``Live
    Wire'' build upon any current program if funded?
        Answer. Live Wire is the first of a series of cross-sector, cross-
    discipline exercises that test the Nation's ability to respond to a
    large-scale, coordinated cyber attack and allow the Department to learn
    important lessons that improve our preparation for real emergencies. We
    have hired outside experts to assist in our vulnerability analyses and
    continue to work with the private sector Information Sharing and
    Analysis Centers to augment our technical capabilities and knowledge.
        We created the Cyber Interagency Incident Management Group (IIMG)
    to promote interagency cooperation in advance of and during cyber
    incidents and to assess cyber consequences flowing from an attack or
    natural calamities. This activity is a direct outgrowth of the Live
    Wire experience, where the need to establish a baseline of cyber
    activities across the Federal Government and improve communication
    channels were identified. Other cyber activities also stand to benefit
    from exercises like Live Wire. To date, the Department has focused on
    building the technical capability of the US-CERT and establishing the
    National Cyber Alert System. We are also examining possible system-wide
    impacts on critical infrastructures caused by cyber dependencies and
    interconnectedness

                             BIOSURVEILLANCE SYSTEM

        Question. The President's budget proposes to establish a National
    BioSurveillance Group led by the Department of Homeland Security that
    will include the Department of Health and Human Services and the
    Department of Agriculture to create a national biosurveillance system
    to help shape current and proposed disease surveillance systems and to
    guide research and development of new technologies and capabilities.
        How will the Department's Information Analysis and Infrastructure
    Protection directorate lead the coordination of efforts with the
    Department of Health and Human Services and the Department of
    Agriculture to integrate biosurveillance data from across the country
    in order to verify a chemical or biological terrorist attack?
        Answer. As is directed in Homeland Security Presidential Directive/
    HSPD-9, Defense of United States Agriculture and Food, the Department
    of Homeland Security, through the Information Analysis and
    Infrastructure Protection (IAIP) Directorate is currently leading
    coordination efforts to integrate biosurveillance data across the
    country. This involves the formation of an inter-agency working group.
    The goal of this group is to identify and develop options available to
    each agency, which will culminate in a report which outlines the
    building of a biosurveillance program within IAIP and projects what
    will be needed to develop and maintain a credible system. The working
    group has been meeting weekly in an effort to present the report to the
    Assistant Secretaries of Information Analysis and Infrastructure
    Protection and the Under Secretary of IAIP in April. The draft report
    will then be presented to the Secretary and Deputy Secretary of DHS,
    with the goal of having a finished report delivered to the President in
    May of this year.
        Question. Also, as part of this initiative, how will the
    Department's Science and Technology Directorate expand its
    environmental monitoring activities in the Nation's largest
    metropolitan areas?
        Answer. The Department's Science and Technology Directorate will
    work with its BioWatch partners to expand the number of collectors in
    the highest threat metropolitan areas. This expansion is based on
    detailed modeling studies that determine the optimum number of
    collectors for densely populated regions and a request from the cities
    to provide additional collectors for their high priority facilities and
    sites. The expansion will draw on small modifications to the current
    BioWatch technology, in particular, the use of additional automation
    and detection equipment to enable cost-effective analysis of the
    significantly increased sample load. Plume modeling for a variety of
    potential release scenarios and meteorological conditions will be used
    to optimize the layout and the coverage of the ensemble of collectors
    for each of the selected metropolitan areas. Localities will help
    determine where additional collectors should be placed based on their
    prioritized critical facilities needs (e.g., transit systems;
    stadiums). In addition, each metropolitan area will be provided a small
    number of collectors that they can deploy at special events as they
    arise. A pilot study will be completed this spring and summer in New
    York City to determine the best configuration options to consider for
    deployment use in fiscal year 2005.

                              TERRORIST WATCH LIST

        Question. Over the course of the last 2 years, the Administration
    has been working towards a government-wide consolidation of terrorist
    watchlist information. While the government-wide responsibility has
    been given to another Department, there are still multiple watchlists
    within the Department of Homeland Security.
        Congress provided the Department with $10 million for watchlist
    integration in this year's appropriation--what is the status of that
    project?
        Answer. DHS is a partner in the multi-agency Terrorist Screening
    Center. The Terrorist Screening Center became operational in December
    of 2003 and is now conducting 24 hour a day, 7 days per week
    operations. It is the single coordination point for Terrorist
    Encounters and thus enables a coordinated response for Federal, State,
    and Local Law Enforcement. The TSC has received more than 1,000 calls
    to date and has identified over 500 positive matches.
        Question. How is the Department's watchlist being integrated with
    other agencies watchlists at the Federal Bureau of Investigation's
    Terrorist Screening Center?
        Answer. TSC remains on schedule to bring the first version of its
    consolidated Terrorist Screening Database online by the end of the
    year. This database will be accessible to queries from Federal, State,
    and local agencies for screening purposes and will provide immediate
    responses to Federal border-screening and law-enforcement authorities.
    Each parent organization of the individual watchlists provides
    Assignees to the Terrorist Screening Center for real-time access to
    TTIC and FBI databases. All new nomination and updates to existing
    records are therefore performed at the TSC.
        Question. Is it possible today for every law enforcement officer
    and intelligence analyst at the Department of Homeland Security to
    access one list of suspected terrorists?
        Answer. Currently, DHS intelligence analysts continue to access
    information utilizing the information provided by the TSC specific to
    each individual list. However, as the preceding answer indicates, TSC
    plans to consolidate these lists into a single database in the near
    future.

                     Transportation Security Administration

        Question. Over 54 percent of the President's budget request for the
    Transportation Security Administration for fiscal year 2005 is
    dedicated for aviation passenger and baggage screeners pay, benefits,
    training, and human resource services. At the same time, three major
    grant programs currently administered by the Transportation Security
    Administration dealing with trucking security, port security grants,
    and Operation Safe Commerce are to be reorganized under the Office for
    Domestic Preparedness pursuant to the Department's reorganization
    authority. The fiscal year 2005 budget proposes to reduce or terminate
    funding for these programs.
        Will the Transportation Security Administration continue to have
    responsibility for security over all sectors of transportation or will
    aviation security continue to be the main focus of this agency?
        Answer. The Border and Transportation Security Directorate of DHS,
    in partnership with the Coast Guard, has jurisdiction over the security
    of all modes of transportation and is charged with coordinating all
    activities of the Department under the Homeland Security Act. The Coast
    Guard and organizations within BTS either have primary or subsidiary
    responsibilities in each transportation area. TSA clearly has a primary
    transportation role within BTS, and this role does not change merely by
    the transfer of grant distribution and management activities to ODP.
        Question. What funding will be available for fiscal year 2005 to
    increase security of railways, roadways, and all other modes of
    transportation in light of the Administration's proposal to terminate
    intercity bus and trucking grants?
        Answer. The responsibility of securing our Nation's transportation
    systems is a shared responsibility between government, local operators,
    and private companies who profit from that system. The aviation system
    is treated no differently, though understandably has received the most
    Federal focus to date given the clear nature and level of the aviation
    threat. We will continue to undertake transportation security programs
    on a threat-based, risk management basis.
        With respect to rail and mass transit specifically, DHS, DOT, and
    other Federal agencies are working together to enhance rail and transit
    security in partnership with the public and private entities that own
    and operate the Nation's rail and transit systems. The DHS grant
    program for improving rail and transit security in urban areas has
    awarded or allocated over $115 million since May 2003. Additionally,
    the Administration has requested $24 million for TSA to advance
    security efforts in the maritime and surface transportation arenas. DHS
    will conduct the following activities and initiatives to strengthen
    security in surface modes:
      --Implement a pilot program to test the new technologies and
            screening concepts to evaluate the feasibility of screening
            luggage and carry-on bags for explosives at rail stations and
            aboard trains;
      --Develop and implement a mass transit vulnerability self-assessment
            tool;
      --Continue the distribution of public security awareness material
            (i.e., tip cards, pamphlets, and posters) for motorcoach,
            school bus, passenger rail, and commuter rail employees;
      --Increase passenger, rail employee, and local law enforcement
            awareness through public awareness campaigns and security
            personnel training;
      --Ensure compliance with safety and security standards for commuter
            and rail lines and better help identify gaps in the security
            system in coordination with DOT, with additional technical
            assistance and training provided by TSA;
      --Continue to work with industry and State and local authorities to
            establish baseline security measures based on current industry
            best practices and with modal administrations within the DOT as
            well as governmental and industry stakeholders, to establish
            best practices, develop security plans, assess security
            vulnerabilities, and identify needed security enhancements; and
      --Study hazardous materials (HAZMAT) security threats and identify
            best practices for transport of HAZMAT.
        Question. How will the Transportation Security Administration
    coordinate with the Office for Domestic Preparedness on the grant
    programs (trucking security, port security grants, intercity bus
    grants, and Operation Safe Commerce) that will be moved from TSA
    pursuant to the reorganization?
        Answer. It is anticipated that TSA, other BTS organizations with
    transportation security responsibilities and the Coast Guard will
    continue to provide the necessary operational expertise for the grant
    programs through participation in pre-award management functions. These
    functions include determination of eligibility and evaluation criteria,
    solicitation and application review procedures, selection
    recommendations and post award technical monitoring.
        These organizations will also continue to leverage existing
    transportation expertise by working with industry stakeholders and DOT
    modal administrations to ensure that Federal security grants facilitate
    the seamless integration of security planning activities by industry
    stakeholders and governmental stakeholders at the regional, state, and
    local levels.
        Question. Congress provided $85 million for the Transportation
    Security Administration for fiscal year 2004 to provide additional
    screeners to inspect air cargo and also for the research and
    development of explosive detection systems in order to perform
    screening of the larger palletized, bulk air cargo.
        With the increase in funding provided, how many additional
    screeners have been hired to inspect air cargo to date and when do you
    expect to be fully staffed?
        Answer. The funding provided in the Department of Homeland Security
    Appropriations Act, 2004 (Public Law 108-90) enabled TSA to hire 100
    new cargo inspectors. All 100 cargo inspector positions have been
    selected, and paperwork is being processed by TSA Human Resources. We
    anticipate extending job offers to these applicants and bringing them
    on board within the next 2 months.
        Question. What enhancements are being made to the current Known
    Shipper program to guarantee the safety of air cargo?
        Answer. Since 9/11, significant enhancements have been made to the
    known shipper program. The Known Shipper Program was started in 1996 at
    FAA with the development and implementation of comprehensive known
    shipper requirements. The current requirements for new shippers
    applying for known shipper status have been strengthened. In addition,
    the authenticity of established known shippers has been verified as
    meeting the new requirements. In order to substantiate the legitimacy
    of known shippers further, air carriers have been required to conduct
    site visits of known shippers' facilities. Additionally, TSA is
    currently developing a Known Shipper Database, which will allow TSA to
    vet applicants to the program more thoroughly for legitimacy by
    comparing data submitted by applicants against terrorist watch lists,
    other government data bases, and other publicly available information.
    Eventually, TSA's Known Shipper Database will be one part of a larger
    freight assessment database intended to target high risk cargo
    shipments for additional screening.
        Question. Would it currently be feasible to inspect 100 percent of
    all air cargo being placed on aircraft, as proposed by some in
    Congress, and, in your opinion, how do you feel the flow of commerce
    would be affected if air cargo was restricted from being placed on
    aircraft unless 100 percent inspection of air cargo took place?
        Answer. Not only is 100 percent physical inspection infeasible, it
    is not desirable. The sheer volume of air cargo transported in the
    United States renders the inspection of all air cargo infeasible
    without a significant negative impact on the operating capabilities of
    the entire transportation infrastructure of the United States and the
    national economy. Anything more than a targeted, focused physical
    inspection protocol on high risk cargo for the long term risks homeland
    security resources and critical management focus on known security
    risks. The DHS goal is to ensure that all cargo is screened to
    determine risk and that 100 percent of high-risk cargo is inspected.
    TSA is aggressively pursuing next-generation technological solutions
    that will allow us to enhance security for air cargo. Meanwhile, TSA is
    taking steps to implement measures outlined in the Air Cargo Strategic
    Plan and is doing everything possible to ensure that cargo going on
    planes is secure, including the requirement that all cargo transported
    on passenger aircraft originate from a known shipper.
        Question.The President's fiscal year 2005 budget requests a $25
    million increase for the Computer Assisted Passenger Pre-screening
    System (CAPPS II) currently being tested by the Transportation Security
    Administration. This system, when completely functional, will enable
    air carriers to perform an analysis on the ticketed passengers based on
    authentication from commercial data providers, and will also check
    passenger names against a government supplied terrorist watch list.
    However, CAPPS II has been slow in developing because of delays in
    obtaining passenger data needed for testing due to privacy concerns by
    air carriers.
        How is the Department working with the airlines to alleviate
    privacy concerns in light of recent disclosures that air carriers have
    shared passenger records with other government agencies and private
    contractors without the passengers' knowledge?
        Answer. The disclosure of passenger records by air carriers
    triggered concerns because passengers were not told that the
    information they provided to make a reservation was being shared with
    another entity (the government) for another purpose (national
    security). In at least one instance, the air carrier's own published
    privacy policy stated that passenger information would not be shared
    with anyone else. Bearing this experience in mind, the Department is
    committed to working with privacy advocates, airlines, passengers, and
    the travel industry to provide greater understanding and awareness of
    the purposes and scope of CAPPS II and to ensure that individual
    privacy rights are protected.
        DHS plans to issue a Notice of Proposed Rulemaking (NPRM) seeking
    public comment on the collection of Passenger Name Record (PNR) data.
    Certain aircraft operators, foreign air carriers, and operators of
    computer reservation systems would be required to provide PNR
    information for each individual who makes a reservation. The proposal
    will also require regulated parties to take reasonable steps to ensure
    that the passenger is provided notice of the purpose for which the
    information is collected, the authority under which it is collected,
    and the consequences of a passenger's failure to provide the
    information.
        The CAPPS II system will only be accessible to persons who require
    access for the performance of their duties as Federal employees or
    contractors to the Federal Government. The airlines, airline personnel,
    and the computer reservation systems will not have access to
    information contained in CAPPS II. All contractors, contractor
    employees and Federal Government employees who will have access to and/
    or who will be processing personal data will sign a written privacy
    policy and acknowledge that they are bound by the strict terms of the
    privacy policy. All personnel with access to the system will have a
    government security clearance based on the level and type of
    information accessed. At a minimum, a Department of Defense (DOD)
    Secret Clearance will be required. The guiding principle for access
    will be ``need-to-know.'' Access will be compartmentalized, thus
    allowing access to persons based only on their individual need-to-know
    and only to the extent of their authorization (e.g., a person might be
    permitted to access information with regard to the unclassified portion
    of the system, but be denied access to classified areas). CAPPS II also
    will have substantial security measures in place to protect the system
    and data from unauthorized access by hackers or other intruders.
        Question. How can assurances be made to prevent identity theft by a
    would-be terrorist intent on using legitimate individuals information
    to get around the CAPPS II background checks?
        Answer. While no system can be 100 percent effective, we believe
    that the CAPPS II system will be a great advancement in defeating
    identity fraud. The CAPPS II design includes an information-based
    identity assessment process, which is an improved version of the best
    practices used by the banking and credit industries to combat identity
    theft and fraud. This capability is a substantial improvement to the
    current system.
        CAPPS II will incorporate best practices developed in the private
    sector for discovering cases of identity fraud. In the case of an
    identity thief who steals a legitimate identity, any number of indicia,
    including errors or inconsistencies in the information, could reveal
    the theft. Further, CAPPS II will make use of a database containing up-
    to-date information about stolen identities, which will further protect
    against identity thieves who use this means to enable them to attack
    the civil aviation system.
        No system can be 100 percent effective, which is why CAPPS II will
    be part of a layered ``system of systems'' involving physical scrutiny,
    identity-based risk assessment, and other security precautions on
    aircraft and at airports.
        Question. The Inspector General completed last week a review of
    background checks for Federal airport passenger and baggage screeners
    that listed twelve recommendations for the administrator of
    Transportation Security Administration to improve its management of the
    background check process.
        What procedures have been put into place to guarantee all passenger
    and baggage screeners that are currently employed and also individuals
    who are applying for a screening position have a full background check?
        Answer. All screeners employed by TSA as of May 31, 2003, except
    for a small number of exceptions detailed below, have received
    fingerprint based criminal history record checks based on FBI criminal
    history records, pre-employment background checks which examine
    Federal, county, and local law enforcement records, credit history, and
    TSA watch lists (No-Fly and Selectee); and Access National Agency Check
    with Inquiries (ANACI) background checks conducted by the Office of
    Personnel Management (OPM). These checks were completed by October 1,
    2003. The limited exceptions included individuals on military or sick
    leave, and some screeners under the private screening pilot program.
    All of the exceptions have received fingerprint based criminal history
    checks and pre-employment background checks. In addition, OPM ANACIs
    have been completed or are in the process of being completed on all
    contract screeners and on screeners who have returned from sick or
    military leave.
        Since June 1, 2003, TSA has required that screener applicants
    receive the aforementioned fingerprint based criminal history check and
    pre-employment background check before they are hired. TSA does not
    extend offers of employment to applicants until these checks are
    successfully adjudicated for each applicant. Once hired, all new
    screeners then undergo the more thorough OPM ANACI check, which
    typically takes 3-6 months to complete. This check reviews education,
    employment history, credit history, references, criminal history,
    military records, and citizenship. The combination of timely check
    before hiring and more thorough OPM checks soon thereafter provides a
    layered approach to personnel security for new screeners.
        TSA maintains a database that tracks the progress of screener
    investigations from which routine reports can be generated and reviewed
    to determine the status of all investigations.

                      Emergency Preparedness and Response

                                   BIOSHIELD

        Question. Does the lack of authorization for the administration's
    BioShield initiative inhibit your ability to obligate the funds
    appropriated for the program?
        Answer. The fiscal year 2004 Homeland Security Appropriations Act
    provided $885 million to be spent for development of biodefense
    countermeasures for the current fiscal year. Absent authorizing
    legislation, the Department of Homeland Security (DHS) has relied upon
    this authority to obligate funds for biodefense countermeasure
    activities. DHS, the Department of Health and Human Services (HHS), the
    Homeland Security Council, and the Office of Management and Budget
    (OMB) recognize the importance of expeditious progress in developing
    much-needed countermeasures while following Congressional intent. In
    that vein, all parties have sought to follow the principles set forth
    in the proposed legislation in developing the interagency agreement for
    next-generation anthrax vaccine. A FEMA contracting officer has
    authority to sign contracts related to the obligation of BioShield
    funds.
        Question. For what purposes do you intend to use the funds made
    available for fiscal year 2004?
        Answer. Over the past 10 months, the WMD Medical Countermeasures
    subcommittee has developed countermeasures information of interest to
    administration policymakers who will make the BioShield procurement
    decisions. The WMD subcommittee commissioned an end-to-end analysis of
    medical countermeasures to Category ``A'' biological agents (anthrax,
    smallpox, plague, botulinum toxin, tularemia, Ebola, and other
    hemorrhagic fever viruses). Working groups developed initial
    requirements for four high-priority bioweapon countermeasures for which
    there is high need and a reasonable expectation that products will be
    available in the near term:
      --Next-generation anthrax vaccine (recombinant Protective Antigen,
            rPA)
      --Anthrax immune therapy
      --Next-generation smallpox vaccine (modified vaccinia, MVA or LC16m8)
      --Botulinum antitoxin
        Question. Why does the President's fiscal year 2005 budget propose
    to transfer the Strategic National Stockpile from the Department of
    Homeland Security's Emergency Preparedness and Response Directorate to
    the Department of Health and Human Services (HHS) but not the BioShield
    program? Please explain why the Stockpile is more appropriately managed
    by the Department of Health and Human Services and why BioShield is
    more appropriately managed by the Department of Homeland Security.
        Answer. The President's Budget for fiscal year 2005 proposes to
    transfer the Strategic National Stockpile (SNS) back to HHS where it
    will be better aligned with HHS' medical and scientific expertise and
    responsibilities. The SNS is an operational program, consisting of
    copious amounts of physical inventory and medical materiel. Since its
    mission is time-critical, it should possess a single, undisputed
    management structure for rapid decision-making. Although the daily
    operations of the SNS have not been affected in a significant manner by
    the transfer from HHS to DHS, the single command structure for the
    program that would result from the transfer back to HHS would
    streamline operations. DHS will maintain its ability to deploy the
    Stockpile in accordance with the SNS statute, 42 U.S.C.  300hh-12, as
    amended, and thus, the potential response needs of the DHS mission will
    not be compromised in any manner.
        The BioShield program differs substantially from the SNS in that it
    is a policy-driven program that is most successful as a joint venture
    between homeland security and health experts. The major programmatic
    aspect/activity of BioShield is product development, which is performed
    by private companies. The BioShield program was specifically
    constructed to spur development of countermeasures for which no
    commercial markets exist against current and emerging threats to the
    United States, for inclusion in the SNS.
        Since DHS is responsible for assessing current and emerging threats
    against the United States, including biological and chemical threats,
    the BioShield program, which helps to ensure our Nation's health
    security and is one of the many facets of the Department's efforts to
    combat terrorism, is therefore more appropriately managed by DHS than
    by HHS.
        Question. How are decisions being made as to the appropriate
    expenditure of BioShield funds? Has an assessment been done of our
    vulnerabilities to biological attacks to guide decisions as to the
    investments which should be made to develop, produce and pre-purchase
    vaccines or other medications for the Nation's biodefense? Who is doing
    such an assessment and what priorities have been established?
        Answer. There are several steps taken to determine appropriate
    biodefense countermeasures development and the use of BioShield funds.
    DHS and HHS are seeking to adhere to the intent of the proposed
    BioShield authorizing legislation now awaiting action in the Senate.
        The Information Analysis and Infrastructure Protection Directorate
    of DHS is responsible for determining a material threat. After that,
    the WMD Countermeasures subcommittee group co-chaired by DHS, HHS, and
    the Department of Defense, part of the Homeland Security Council Policy
    Coordinating Committee (PCC), develops countermeasures information of
    interest to the PCC, which then makes procurement decisions. The WMD
    Countermeasures subcommittee has completed an analysis of Category
    ``A'' biological agents (anthrax, smallpox, plague, botulinum toxin,
    tularemia, Ebola, and other hemorrhagic fever viruses). Working groups
    developed initial requirements for four high-priority bioweapon
    countermeasures for which there is high need and a reasonable
    expectation that products will be available in the near term:
      --Next-generation anthrax vaccine
      --Anthrax immune therapy
      --Next-generation smallpox vaccine
      --Botulinum antitoxin

                                ANTHRAX VACCINE

        Question. What is the Strategic National Stockpile requirement for
    anthrax vaccine?
        Answer. DHS and HHS have entered into an interagency agreement to
    purchase recombinant Protective Antigen (rPA) vaccine to protect 25
    million persons. The government will consider later purchase of
    additional anthrax vaccine contingent on new vaccination delivery
    system technology and other cost-saving factors such as reduced dose
    requirements.
        Question. Are we filling at least part of the anthrax vaccine
    requirement with an FDA-approved product currently available?
        Answer. The Stockpile currently maintains a small amount of the
    only FDA-licensed pre-exposure vaccine against anthrax (Anthrax Vaccine
    Adsorbed, or AVA). Currently, it has limited production capacity, and
    rectifying that problem would be very expensive and take several years
    to accomplish. AVA is not currently licensed for children or for the
    elderly. However, in order to ensure that some type of anthrax vaccine
    is available until the development and procurement of rPA, DHS and HHS
    have signed an interagency agreement for the purchase of AVA through
    the Department of the Army. This agreement will provide approximately 2
    million doses in fiscal year 2004, 1.5 million doses in fiscal year
    2005, and 1.5 million doses in fiscal year 2006.

                          United States Secret Service

                          WHITE HOUSE MAIL PROCESSING

        Question. The Secret Service budget includes $16,365,000 for White
    House mail screening. The Committee requested in the fiscal year 2004
    bill that a detailed long-term plan for the establishment of a fully
    operational White House mail facility be provided to the Committee.
    When can the Committee expect to receive this report?
        Answer. An interim report was submitted to the Committee on
    February 10, 2004. This interim report stated that the Department of
    Homeland Security is aggressively developing a plan to support mail
    operations for the entire Department. One facet of this development
    process will evaluate incorporation of a combined mail facility
    supporting the White House and Department components located within the
    Washington D.C. metropolitan area. The Secret Service has contracted
    for a study to review several of the secure mail processes currently in
    operation and following conclusion of this review will make a
    recommendation to the Department as to a method of processing mail and
    the potential for a combined facility. This study is expected to be
    completed in April, 2004. A final report will be submitted to the
    Committee in June 2004.
        Since the interim report was submitted to the Committee, the White
    House and Secret Service have determined that the requirements for
    processing White House mail are not compatible with consolidation into
    a DHS mail processing facility. Therefore the June report will be a
    plan for processing White House mail in a separate facility, not a
    combined facility.

                      COUNTERFEITING AND FINANCIAL CRIMES

        Question. Colombia and Bulgaria continue to be hot spots for
    counterfeit currency. Does the fiscal year 2005 Homeland Security
    budget include funding to concentrate on these areas?
        Answer. For almost 30 years, Colombia has remained the largest
    producer of counterfeit U.S. currency in world. In May of 2001, the
    Secret Service received a 2-year allocation of $1.5 million through the
    State Department's ``Plan Colombia'' fund, and implemented plans to
    train and equip a local anti-counterfeiting force to work in
    conjunction with Secret Service agents in the seizure and suppression
    of counterfeit U.S. dollars manufactured in Colombia. Through the
    funding provided under Plan Colombia, the Secret Service and Colombian
    law enforcement authorities were able to make a tremendous impact on
    counterfeit production and distribution networks. This ultimately led
    to significant reductions in the amount of Colombian-manufactured
    counterfeit U.S. dollars that reached the streets of the United States.
        The 2-year execution of Plan Colombia led to the seizure of $123.3
    million in counterfeit U.S. currency, the suppression of 33 counterfeit
    printing plants, and over 164 arrests. This resulted in a 37 percent
    decrease in the amount of Colombian-produced counterfeit U.S. dollars
    passed on the American people.
        Second only to Colombia, organized criminal groups in Bulgaria are
    the world's second leading producer of counterfeit U.S. currency.
    Counterfeit currency produced in Bulgaria continues to be passed in the
    United States and throughout Eastern and Central Europe. There is
    strong evidence that the same organized criminal groups producing
    counterfeit U.S. currency in Bulgaria are also involved in human
    trafficking and narcotics trafficking.
        Bulgaria is a country undergoing a dramatic transition as they seek
    to enter the European Union, restructure their criminal code and remove
    corrupt officials from government. The Secret Service believes that
    additional efforts must be made to capitalize on these efforts and work
    with local law enforcement officials to dismantle the counterfeiting
    operations in Bulgaria. Additionally, the Bulgarian government has
    expressed its willingness to work with foreign law enforcement and has
    requested additional support from the Secret Service.
        While the Department of Homeland Security fiscal year 2005 budget
    request does not include a specific funding request to continue these
    efforts, the Secret Service receives funding in its base budget that
    allows it to continue its strong overseas investigative efforts and
    cooperative partnerships with the foreign law enforcement communities
    in Colombia and Bulgaria.
        Question. What role will the Secret Service play in protecting our
    Nation's extensive network of financial systems from terrorists and
    hackers? Does the fiscal year 2005 budget request provide adequate
    funding to guard against this growing problem?
        Answer. The Secret Service's core investigative mission is to
    safeguard the financial and critical infrastructures of the United
    States. The Department's fiscal year 2005 funding request provides
    adequate funding for the Secret Service to continue the array of
    programs it has developed to work with its law enforcement, private
    sector and academic partners in strengthening these networks and
    preventing intrusions and compromises of these essential
    infrastructures. These programs include:
    Electronic Crimes Task Forces (ECTFs)
        The groundbreaking task force model developed by the Secret Service
    emphasizes information sharing and a pooling of resources and expertise
    to produce a collaborative effort to thwart cyber criminals and to
    detect, investigate, and most importantly, to prevent electronic
    crimes. Members include other Federal, State and local law enforcement
    agencies, prosecutors, private sector representatives from the
    financial services, telecommunications and IT sectors, and academic
    experts from leading universities. These members build trusted
    partnerships and have made tremendous strides in the communities they
    serve in a short period of time.
        Providing these ECTFs with training, resources and manpower is
    paramount to the Secret Service's statutory mission to protect
    financial payment systems and critical infrastructures. Directed by
    Public Law 107-56 (the USA PATRIOT Act of 2001) to expand its ECTF
    model from a single task force in New York to a nationwide network, the
    Secret Service has since established additional ECTFs in Boston, Miami,
    Washington, D.C., Chicago, Los Angeles, San Francisco, Charlotte, Las
    Vegas, Cleveland, Houston, Dallas, and Columbia, South Carolina.
    Electronic Crimes Special Agent Program (ECSAP)
        Currently, the Secret Service has trained 118 agents in this
    program, which provides certified instruction to special agents in the
    preservation and examination of computer forensic evidence. The Secret
    Service has based these agents in field offices throughout the country,
    and they have become indispensable assets to the communities they serve
    and their law enforcement and private sector partners.
    CERT/CSPI (Critical Systems Protection Initiative)
        In a continuing partnership with Carnegie Mellon's Computer
    Emergency Response Team (CERT), the Secret Service has established a
    training program addressing the cyber security of critical
    infrastructures. The expansion of e-commerce and proliferation of
    websites providing financial and personal information to the public has
    made it essential that Secret Service personnel and their partners
    understand the interdependency of computer networks. Through risk
    assessments and identification of vulnerabilities, the Secret Service
    has adopted a more proactive approach to prevent terrorists and hackers
    from exploiting our financial systems.
    CERT/NTAC Insider Threat Study
        In cooperation with Carnegie Melon's CERT, the Secret Service's
    National Threat Assessment Center and Criminal Investigative Division
    are conducting studies that specifically target the banking and
    financial services industries. Again, due to the trusted partnerships
    the Secret Service has developed with these entities, successful
    efforts have been made to gather information and provide operationally-
    critical threat and asset vulnerability.
        Question. Identity theft has been called the fastest growing crime
    in the United States. The Congressional Research Service reports that
    identity theft has grown in three consecutive years. Does the fiscal
    year 2005 budget include funding to counter this growing problem?
        Answer. The fiscal year 2005 budget request includes funding levels
    that fully support the Secret Service's investigative responsibilities,
    including its identity theft investigations. Although there are no new
    initiatives in the budget for preventing and investigating identity
    crimes, the Secret Service has several existing programs aimed at
    stemming the tide of this growing crime. These initiatives include:
    The Identity Crime Interactive Resource Guide CD-ROM & Video
        This highly successful Secret Service initiative, in partnership
    with the U.S. Postal Inspection Service, the International Association
    of Chiefs of Police (IACP) and the Federal Trade Commission (FTC), was
    designed to provide useable tools and resources to local and State law
    enforcement officers and to assist with their identity crimes
    investigations and case management. This joint effort gives local and
    State law enforcement officers the information they need not only to
    assist victims of identity crimes but also to initiate their own
    investigations.
        The CD ROM/Video is an ongoing project that requires amending,
    updating and adding new investigative resources as they become
    available. The Secret Service is currently working on the production
    and distribution of an updated version of the CD-ROM, the development
    of a similar web-based initiative, and deploying the Resource Guide on
    the Secret Service extranet and the DHS portal webpage. To date, more
    than 40,000 of these CD-ROMs have been distributed to local and State
    police agencies and local, State and Federal prosecutors.
    Forward Edge
        The Secret Service also joined with the IACP and the National
    Institute for Justice to produce the interactive, computer-based
    training program known as ``Forward Edge,'' which takes the next step
    in training officers to conduct electronic crime investigations.
    Forward Edge is a CD-ROM that incorporates virtual reality features as
    it presents three different investigative scenarios to the trainee. It
    also provides investigative options and technical support to develop
    the case.
        While over 30,000 of these training tools have been distributed to
    the Secret Service's law enforcement partners, an updated version of
    Forward Edge is currently under development. This version will
    incorporate the video, virtual reality and 3D models but will also add
    adaptations made in reaction to new challenges posed by emerging
    technology and criminal activity.
    Best Practices for Seizing Electronic Evidence
        This pocket-size guide produced by the Secret Service assists law
    enforcement officers in recognizing, protecting, seizing and searching
    electronic devices in accordance with applicable statutes and policies.
    Over 320,000 ``Best Practices Guides'' have been distributed free of
    charge to local and Federal law enforcement officers.
    Identity Crime Training Seminars
        In a joint effort with the Department of Justice, the U.S. Postal
    Inspection Service, and the FTC, the Secret Service is hosting Identity
    Crime Training Seminars for law enforcement officers across the United
    States. Each seminar consists of 8 hours of training focused on
    providing local and State law enforcement officers with tools and
    resources that they can immediately put into use in their
    investigations of identity crime. Additionally, officers are provided
    resources and information that they can pass on to members of their
    community who are victims of identity crime. Other critical partners in
    these training seminar efforts are Discover Financial Services, the
    American Association of Motor Vehicles Administrators (AAMVA) and the
    State DMVs from each community.

                        Office for Domestic Preparedness

                              GRANT CONSOLIDATION

        Question. The announced reorganization of grant programs within the
    Department of Homeland Security moves the responsibility for all of the
    grant programs under TSA to ODP--Port Security grants, Intercity Bus
    grants, Trucking industry grants, and Operation Safe Commerce, and
    programs such as the Emergency Management Performance Grants from EP&R
    to ODP. How will you ensure that TSA and EP&R are still involved with
    the oversight of these programs, especially with reduced funding as
    proposed for 2005?
        Answer. The Office for Domestic Preparedness and the Office of
    State and Local Government Coordination both maintain close
    communication and contact with EP&R. The creation of the Office of
    State and Local Government Coordination and Preparedness will not
    inhibit or impede the already established relationship between ODP/
    OSLGC and EP&R & TSA.
        ODP currently coordinates closely with EP&R and will continue to do
    so, as it does with other DHS components. For example, ODP and EP&R are
    working closely on the transfer of the Pre-Positioned Equipment Program
    from ODP to EP&R. Additionally, ODP and EP&R have worked closely on the
    Top Officials (TOPOFF) Exercise Program, and are currently working
    together on the planning of TOPOFF 3. Finally, EP&R is part of ODP's
    internal DHS review team for the state homeland security strategies,
    which each State was required to complete and provide to ODP by January
    31, 2004.
        OSLGCP will maintain strong ties to operational subject matter
    experts within the current offices and agencies as appropriate. For
    example, while responsibility for crafting policy and guidelines for
    the Port Security Grant Program would reside within OSLGCP, program
    development will still have significant input from and access to
    subject matter experts in the Coast Guard, MARAD, and TSA. The
    Department fully intends to use existing resources and subject matters
    experts to ensure that OSLGCP has the proper staffing levels and
    resources to effectively administer its activities and programs.

                           BASIC STATE GRANT PROGRAM

        Question. The 2005 budget request proposes a significant reduction
    to the Basic State Grant program of the Office for Domestic
    Preparedness (ODP)--as well as abandoning the State minimum in the
    historically-used formula for distributing the money to states. I
    understand the need to balance resources between the states and the
    needs of our urban areas. We tried to achieve that balance in the
    fiscal year 2003 Emergency Wartime Supplemental Appropriations Act and
    the fiscal year 2004 Appropriations Act. The President's fiscal year
    2005 budget proposal seems to have tipped the balance too far in the
    direction of the high-threat urban areas--and does not allow for the
    basic mission of the ODP to be carried out. ODP's mission is to ensure
    a basic level of preparedness in all states. What is the rationale for
    the proposed reduction in funding for the Basic State Grant Program?
        Answer. The President's fiscal year 2005 budget request provides
    significant support for the mission and programs administered by the
    Office for Domestic Preparedness. As you know, The Homeland Security
    Act of 2002 (Public Law 107-296) designated ODP as the principal
    Federal agency responsible for the preparedness of the United States
    for acts of terrorism, including coordinating preparedness efforts at
    the Federal level, and working with all State, local, tribal, parish,
    and private sector emergency response providers on all matters
    pertaining to combating terrorism, including training, exercises, and
    equipment support. The President's request includes $3.561 million,
    which is a $3.3 million increase from the fiscal year 2004 request.
    With these resources, ODP will be able to maintain its role in
    enhancing the security of our Nation.
        It is important to remember that we are operating in a fiscal and
    security environment where we must ensure maximum security benefits are
    derived from every security dollar. To do that, we must be able to take
    a new look at the way in which we allocate resources. Additionally,
    given the Department's improved ability to analyze risks, threats, and
    vulnerabilities, the Department is better able to provided targeted
    funds to increase the security of the Nation. The Department will
    continue to work with the states and territories to provide the
    resources they need--equipment acquisition funds, training and exercise
    support, and technical assistance--to deter, prevent, respond to, and
    recover from acts of terrorism.
        Question. The President's budget proposes an unprecedented amount
    of discretion for the Department in allocating grants. Is it
    appropriate to be requesting these changes through appropriations
    language--or should the administration instead submit a formal
    legislative proposal to change grant allocations to the Congress for
    consideration by the respective authorizing Committees of jurisdiction?
        Answer. The Department of Homeland Security has been discussing and
    working with Members of Congress and different committees, including
    the House Select Committee on Homeland Security and the Senate
    Governmental Affairs Committee, on these issues. At this point, both
    Committees are considering legislation that would authorize various
    aspects of ODP's mission. The Department supports much of this
    legislation (HR 3266 and S. 1245, respectively) in their current forms
    and, in particular, supports the Committee's intent, and is working
    with Chairman Christopher Cox, of the House Select Committee on
    Homeland Security, and Chairman Susan Collins, of the Senate
    Governmental Affairs Committee. The Department will continue to work
    with these Committees on these pieces of legislation and on other
    pieces of legislation that address authorization of ODP's grant
    programs.
        Question. What threat information will be taken into account when
    allocating the basic State grant funds?
        Answer. As a requirement to receive their fiscal year 2004 Homeland
    Security Grant Program funds, and additional funds in fiscal year 2005,
    states conducted threats and vulnerabilities assessments and, based on
    that information, developed homeland security strategies. The states
    were required to provide completed homeland security strategies to the
    Office for Domestic Preparedness on January 31, 2004. At this point,
    ODP has received strategies from all the states and territories, the
    District of Columbia and the Commonwealth of Puerto Rico. ODP and an
    internal DHS Review Board have approved a majority of these strategies.
    A few states and territories are working to provide additional
    information and details to finalize their strategies, but ODP
    anticipates that all strategies will be approved in the next few weeks.
        These strategies are critical resources to the states in the
    efforts to distribute funds in the most effective manner to address the
    homeland security needs. They too are important because they will allow
    the Department to match the preparedness needs as outlined in the state
    homeland security strategies with resources available from the Federal
    Government. The information provided in these strategies will allow the
    Department to make informed decisions on how funds will be distributed
    and what factors the Department will use to make this determination.
        Question. The budget materials talk about the expanded activities
    that the Basic State Grant can be used for--including protection of
    critical infrastructure. If the Basic State Grant can be used for this
    purpose, why is a separate $200 million critical infrastructure grant
    program being proposed?
        Answer. The President's fiscal year 2005 budget request includes
    $200 million for targeted infrastructure protection as part of the
    Urban Areas Security Initiative (UASI) program. The goal of this $200
    million is to provide targeted funding to specific critical
    infrastructure based on analyses performed by the Department of
    Homeland Security's Information Analysis and Infrastructure Protection
    Directorate. These funds will supplement the assistance provide under
    the UASI program and the State Homeland Security Grant Program. While
    the state-based grants will be dedicated to generally enhancing
    security and preparedness, the $200 million for infrastructure
    protection will be targeted to specific cites thereby assisting states
    in their efforts to secure potentially higher threat targets.
        Question. Please provide the Committee with state-by-state
    breakouts of all grants provided through the fiscal year 2000, 2001,
    2002, 2003, and 2004 appropriations, including supplementals. Include
    in the breakouts the status of the grants, dates awarded, obligation
    amounts, and drawndown amounts.
        Answer. Please see the table below entitled ``State-by-state
    Breakout''.
        Question. In addition, please provide obligations and disbursements
    for National Exercises, the Center for Domestic Preparedness, the
    National Consortium for Domestic Preparedness, technical assistance,
    equipment--for each of these years.
        Answer. ODP has completed the preliminary data collection for the
    response to this question. The data collected involves over 4,400 lines
    of accounting and, if printed on 810 paper, would require
    2,264 pages of data. To ensure an accurate response, the data needs to
    be analyzed and a quality analysis be performed. This effort will take
    additional time to ensure proper analysis and response.
        Further, in order to ensure the most responsive answer to the
    question, ODP would request the opportunity to discuss the data with
    Appropriations Committee staff while the data is being analyzed. This
    discussion would provide preliminary information and to ensure that ODP
    properly understands the request and that the final answer is fully
    satisfactory.

                                                            2000-2004 GRANT ALLOCATIONS: STATE GRANTS
                                                                       [In dollar amount]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                2000 State      2001 State      2002 State
                                                 Domestic        Domestic        Domestic       2003 State      2003 State     2004 Homeland
                      State                    Preparedness    Preparedness    Preparedness      Homeland        Homeland     Security Grant      Totals
                                                 Equipment       Equipment       Equipment    Security Grant  Security Grant      Program
                                                   Grant           Grant           Grant         Program I       Program II
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Alabama.................................       1,172,000       1,228,000       5,317,000       9,457,000      25,049,000      36,853,000      79,076,000
    Alaska..................................         380,000         389,000       2,783,000       4,995,000      13,230,000      19,465,000      41,242,000
    Arizona.................................       1,239,000       1,319,000       5,770,000      10,584,000      28,033,000      41,243,000      88,188,000
    Arkansas................................         788,000         821,000       4,141,000       7,394,000      19,585,000      28,815,000      61,544,000
    California..............................       7,167,000       7,666,000      24,831,000      45,023,000     119,256,000     175,457,000     379,400,000
    Colorado................................       1,091,000       1,158,000       5,220,000       9,480,000      25,111,000      36,944,000      79,004,000
    Connecticut.............................         943,000         984,000       4,626,000       8,265,000      21,893,000      32,211,000      68,922,000
    Delaware................................         407,000         419,000       2,887,000       5,185,000      13,733,000      20,206,000      42,837,000
    District of Columbia....................         561,000         366,000       2,747,000       4,910,000      13,006,000      19,136,000      40,726,000
    Florida.................................       3,409,000       3,631,000      12,967,000      23,654,000      62,655,000      92,182,000     198,498,000
    Georgia.................................       1,868,000       1,993,000       7,797,000      14,188,000      37,579,000      55,288,000     118,713,000
    Hawaii..................................         503,000         515,000       3,172,000       5,693,000      15,079,000      22,186,000      47,148,000
    Idaho...................................         510,000         530,000       3,226,000       5,803,000      15,375,000      22,621,000      48,065,000
    Illinois................................       2,801,000       2,964,000      10,604,000      18,879,000      50,005,000      73,571,000     158,824,000
    Indiana.................................       1,499,000       1,580,000       6,400,000      11,399,000      30,194,000      44,422,000      95,494,000
    Iowa....................................         856,000         892,000       4,308,000       7,656,500      20,282,000      29,841,000      63,835,500
    Kansas..................................         807,000         844,000       4,151,000       7,401,000      19,603,000      28,842,000      61,648,000
    Kentucky................................       1,084,000       1,136,000       5,048,000       9,001,000      23,838,000      35,073,000      75,180,000
    Louisiana...............................       1,175,000       1,228,000       5,331,000       9,451,000      25,037,000      36,836,000      79,058,000
    Maine...................................         513,000         530,000       3,213,000       5,751,000      15,232,000      22,409,000      47,648,000
    Maryland................................       1,337,000       1,407,000       5,881,000      10,585,000      28,037,000      41,251,000      88,498,000
    Massachusetts...........................       1,552,000       1,632,000       6,579,000      11,711,000      31,020,000      45,638,500      98,132,500
    Michigan................................       2,329,000       2,457,000       8,958,000      15,918,000      42,162,000      62,032,000     133,856,000
    Minnesota...............................       1,251,000       1,318,000       5,631,000      10,076,000      26,690,000      39,267,000      84,233,000
    Mississippi.............................         833,000         869,000       4,255,000       7,582,000      20,083,000      29,547,000      63,169,000
    Missouri................................       1,402,000       1,474,000       6,079,000      10,834,000      28,697,000      42,221,000      90,707,000
    Montana.................................         436,000         447,000       2,967,000       5,303,000      14,047,000      20,668,000      43,868,000
    Nebraska................................         602,000         623,000       3,502,000       6,254,500      16,568,000      24,376,000      51,925,500
    Nevada..................................         620,000         655,000       3,693,000       6,771,000      17,935,000      26,387,000      56,061,000
    New Hampshire...........................         501,000         519,000       3,187,000       5,727,000      15,172,000      22,321,000      47,427,000
    New Jersey..............................       1,968,000       2,072,000       7,948,000      14,222,000      37,671,000      55,424,000     119,305,000
    New Mexico..............................         618,000         639,000       3,574,000       6,401,000      16,956,000      24,946,000      53,134,000
    New York................................       4,099,000       4,321,000      14,953,000      26,492,000      70,172,000     103,243,000     223,280,000
    North Carolina..........................       1,848,000       1,962,000       7,706,000      13,908,000      36,840,000      54,203,000     116,467,000
    North Dakota............................         385,000         392,000       2,794,000       4,983,000      13,200,000      19,421,000      41,175,000
    Ohio....................................       2,624,000       2,769,000       9,897,000      17,510,000      46,378,000      68,235,000     147,413,000
    Oklahoma................................         959,000       1,001,000       4,656,000       8,304,000      21,996,000      32,362,000      69,278,000
    Oregon..................................         945,000         992,000       4,637,000       8,336,000      22,081,000      32,487,000      69,478,000
    Pennsylvania............................       2,791,000       2,934,000      10,512,000      18,570,000      49,189,000      72,370,500     156,366,500
    Rhode Island............................         459,000         472,000       3,063,000       5,489,000      14,540,000      21,392,000      45,415,000
    South Carolina..........................       1,062,000       1,119,000       5,028,000       9,017,000      23,882,000      35,138,000      75,246,000
    South Dakota............................         406,000         414,000       2,868,000       5,131,000      13,591,000      19,996,000      42,406,000
    Tennessee...............................       1,400,000       1,477,000       6,140,000      10,978,000      29,080,000      42,786,000      91,861,000
    Texas...................................       4,434,000       4,735,000      16,196,000      29,538,000      78,238,000     115,110,000     248,251,000
    Utah....................................         695,000         727,000       3,849,000       6,937,000      18,374,000      27,033,000      57,615,000
    Vermont.................................         375,000         383,000       2,772,000       4,963,000      13,147,000      19,342,000      40,982,000
    Virginia................................       1,688,000       1,788,000       7,062,000      12,716,000      33,683,000      49,556,000     106,493,000
    Washington..............................       1,455,000       1,538,000       6,276,000      11,294,000      29,917,000      44,015,000      94,495,000
    West Virginia...........................         634,000         654,000       3,567,000       6,340,000      16,792,000      24,705,000      52,692,000
    Wisconsin...............................       1,356,000       1,425,000       5,925,000      10,565,000      27,985,000      41,173,000      88,429,000
    Wyoming.................................         352,000         357,000       2,696,000       4,827,000      12,784,000      18,809,000      39,825,000
    Puerto Rico.............................       1,267,000       1,120,000       4,894,000       8,727,000      23,118,000      34,014,000      73,140,000
    Virgin Islands..........................         372,000         277,000         861,000       1,542,000       4,085,000       6,009,000      13,146,000
    American Samoa..........................         230,230         187,600         892,000       1,482,000       3,926,000       5,776,000      12,493,830
    Guam....................................         328,000         284,000         828,000       1,596,000       4,226,000       6,217,000      13,479,000
    N. Mariana Islands......................         138,770          92,400         835,000       1,496,000       3,963,000       5,830,000      12,355,170
                                             ---------------------------------------------------------------------------------------------------------------
          TOTALS............................      72,525,000      75,726,000     315,700,000     566,295,000   1,500,000,000   2,206,902,000   4,737,148,000
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                         HIGH THREAT URBAN AREA GRANTS

        Question. The 2005 President's budget proposes a doubling of the
    funds available in the High Threat Urban Area grants. From $727 million
    in 2004 to $1.4 billion in 2005. This funding increase is offset by a
    reduction in the Basic State Grant program funding.
        Will this funding be used to expand the number of jurisdictions
    that are eligible to receive these grants?
        Answer. The purpose of the Urban Areas Security Initiative is to
    provide an ongoing, dedicated funding stream to support densely
    populated urban areas with key national infrastructure assets and a
    demonstrated threat history. Under this program, DHS, through ODP, is
    currently supporting 50 urban areas. At this point, it is difficult to
    provide a definitive answer to your question on expansion of UASI. As
    you know, the Department based funding decisions based on a combination
    of three variables three variables, which resulted in an assignment of
    a terrorist risk estimate for each city. The variables were (1) a
    combined threat index derived from classified CIA and FBI threat data,
    along with the number of FBI terrorism cases opened in a region, (2) a
    count of critical public and private sector assets, weighted for
    vulnerability, and (3) population density. Each of these three
    variables was normalized and then weighted and summed to give an
    overall terrorist risk estimate. The Department will likely use a
    similar method to distribute funds made available for continuation of
    this program in fiscal year 2005. Given the fluid nature of threats and
    risk, it is difficult to predict the number of urban areas that will
    receive funding through the fiscal year 2005 program.
        Question. Will expanding the number of cities involved dilute the
    purpose of the program, which is to focus resources on those areas of
    the country with the most significant threats?
        Answer. Again, the Department has not made a final decision on the
    number of urban areas that will receive support under the UASI program
    in fiscal year 2005. The number of urban areas receiving support will
    ultimately depend on the information that IAIP receives from the CIA
    and the FBI, along with the other factors, that have been considered
    when determining UASI allocations.
        Question. On the one hand you are proposing to reduce the funding
    available through the Basic State grant program--of which one purpose
    is to ensure that contiguous jurisdictions are working together--while
    on the other, increasing the funds available in the High Threat Urban
    Area grants so you can enhance the ability of contiguous jurisdictions
    within urban areas to respond jointly. How is your proposal an
    improvement over the way these programs have been funded in fiscal
    years 2003 and 2004?
        Answer. As you know, with the support of the House and Senate
    Appropriations Committees, the Department of Homeland Security has
    administered dual funding programs--a formula-based state minimum
    program and a high-threat, high-density program--since fiscal year
    2003. The Department and Administration firmly support this dual
    approach because it allows for baseline preparedness levels while
    targeting funds to high-threat, high-density urban areas across the
    country.
        The Department and the Administration have also consistently
    supported an increase in funds for the high-threat, high-density urban
    areas program to meet the unique needs and challenges of the Nation's
    urban areas. With the funds provided to the Urban Areas Security
    Initiative and the state formula grant program, the Administration's
    fiscal year 2005 budget request supports both minimum levels of funding
    for states to continue their efforts to enhance security and targeted
    funds for the Nation's urban areas.
       u.s. visitor and immigrant status indicator technology (us visit)
        Question. In January you deployed the first phase of the US VISIT
    system to 115 airports and 14 seaports.
        How is the system performing so far?
        Answer. By January 5, 2004, the US VISIT system encompassed 99
    percent of all foreign visitors, with visas, entering the country by
    air, and as of March 1, more than 1.69 million foreign visitors have
    been processed under US VISIT procedures, with over 150 initial matches
    against existing watch lists, resulting in the identification of 62
    criminals guilty of rape, homicide, hit and run death, drug
    trafficking, probation violations, assault, wire fraud, conspiracy,
    etc. The Department of State has also processed 235,883 individuals
    utilizing the US VISIT system, with 75 watch list matches on 32
    criminals.
        The increase in security at our airports and seaports provided by
    US VISIT has not had a negative effect on wait times, nor our
    commitment to service. The pilot program exercised in Atlanta prior to
    the implementation of the capabilities on January 5, 2004 identified an
    increase of less than 15 seconds in inspection time to capture the
    finger scans and digital photo. An analysis of 20 major airports
    utilizing data for the December, 2003, January and February 2004
    timeframes, indicate that there was no impact on CBP's ability to meet
    45 minute time frames on airline inspections.
        After early system evaluation it is clear that visitors appreciate
    the effort we are making to enhance security while simultaneously
    facilitating the process for law-abiding, legitimate travelers.
        Question. The budget states that you expect to deploy an exit
    capability at up to 80 airports and 14 seaports this year. Can you give
    us an update on the exit pilots you are currently running as a part of
    US VISIT?
        Answer. On January 5, 2004, US VISIT implemented two exit pilots:
    one at an airport and one at a seaport of entry.
        In fiscal year 2004, US VISIT will continue to pilot and evaluate
    various exit alternatives, e.g. intelligent work stations/kiosks and
    hand held devices at various locations in airports and seaports.
        In fiscal year 2005, based upon these pilot evaluations, US VISIT
    will initiate implementation of the selected exit solution at the
    remaining 79 airports and 11 seaports, continuing implementation in
    fiscal year 2005.
        Exit processing is to be provided at land border ports following
    the entry implementation of US VISIT functionality in secondary at the
    50 largest land ports in conjunction with RF technology implementation
    in fiscal year 2005. As various exit components are implemented, we
    further strengthen the immigration system by identifying people who do
    not comply with the terms of their admission.
        Question. One of the requirements of the Enhanced Visa Security Act
    is for the countries participating in the Visa Waiver Program to issue
    biometrically-enabled machine-readable travel documents--and for the
    Department of Homeland Security to have the equipment at ports-of-entry
    to be able to read those documents by October of 2004. Do the
    Department of Homeland Security and the Department of State expect that
    the October deadline will be met by the Visa Waiver countries?
        Answer. By October 26, 2004, VWP countries must certify that they
    have a program to issue biometrically enhanced passports in order to
    continue in the VWP Most, if not all, of the VWP countries have
    informed the United States that they will not be able issue
    International Civil Aviation Organization (ICAO) compliant passports by
    October 26 due to technical and other factors. Changing the deadline
    would require Congressional action, and a memorandum concerning this
    issue was forwarded to Congress signed by Secretaries Ridge and Powell
    requesting an extension of the deadline to November 30, 2006. As part
    of the decision to request the extension of the deadline, and to
    provide an additional measure of security while standards and
    technology solutions progress, the Secretary will require beginning
    September 30, 2004, all VWP travelers process through US VISIT. US
    VISIT has funding in the fiscal year 2004 expenditure plan to implement
    this requirement at all POE's (in excess of 330 individual ports).
        Question. The US VISIT program office is currently reviewing the
    proposals for the prime integration contract. Given that it may be
    several more months before this contract is awarded and work can
    begin--how do you expect to meet the deadline of deploying the entry
    and exit capabilities to the 50 busiest land ports by the end of this
    calendar year?
        Answer. Significant up-front planning has been and is being
    accomplished in all aspects of this increment, especially in the
    information technology and facilities work areas which well positions
    the Prime Integrator to assist us in meeting our implementation
    deadlines.

                 INTEGRATION OF INFORMATION TECHNOLOGY SYSTEMS

        Question. The Chief Information Officer has been working for over a
    year on the integration and consolidation of information technology
    systems. The budget request for 2005 includes significant resources for
    implementing a new Department-wide human resources system, and a new
    financial management system.
        The Department staff identified over 40 different general ledger
    systems, 30 different procurements processes, and 20 different
    approaches to managing travel costs. Have you seen any savings yet from
    consolidating computer systems?
        When do you expect to see savings?
        Answer. We are still in the development phase of this project and
    therefore cannot estimate when savings may be realized.
        Question. Is the $56 million requested for eMERGE going to cover
    the remaining costs of developing and implementing the financial
    management system?
        Answer. No. This is for fiscal year 2005 only--implementation will
    continue through fiscal year 2006.
        Question. If not, what is the current estimate for the full cost of
    implementation?
        Answer. 2004 and 2005 Projected Costs for eMerge are below. Costs
    in 2006 have not yet been determined.

                                  [In millions]
    ------------------------------------------------------------------------
                                                   2004            2005
    ------------------------------------------------------------------------
    Annual Recurring........................            $2.0           $10.5
    IT Investments..........................             8.0            56.0
    Working Capital.........................            24.8            10.0
                                             -------------------------------
          Total.............................            34.8            76.5
    ------------------------------------------------------------------------

                          PERFORMANCE BASED PAY SYSTEM

        Question. Under Departmental Operations, $102 million is requested
    for training of supervisory personnel to administer a performance-based
    pay system and to create the framework for the new system. While the
    proposal for Department-wide Technology includes a request for $21
    million to design, develop and implement a new human resource
    information technology system. Exactly how much will the new human
    resources system cost?
        Answer. We are projecting fully loaded life cycle costs of $408.5
    million for complete system implementation. It is important to note
    that the $102.5 million is requested for full implementation of the new
    system (including project management, systems design, training and
    communications, etc.), not just the training aspects of system
    implementation. Major components of this figure include $102.5 million
    for system implementation, $10 million for Coast Guard performance
    pool, an estimated $165 million for other component performance pools,
    and a 6-year life cycle cost of $131 million for human resources
    information technology.
        Question. When do you anticipate the computer system will be
    finished and fully implemented?
        Answer. We are anticipating that technology systems to support
    implementation of the new DHS human resources system will be completed
    during fiscal year 2007.
        Question. The Department of Defense is currently planning to fund a
    conversion to a performance-based pay system without requesting
    additional funding. Why does your budget call for an increase?
        Answer. Fully funding a new system, such as the one proposed by
    DHS, is viewed as a critical component in ensuring its successful
    implementation. Adequate funding to support implementation, with
    particular emphasis on requirements for supervisory and managerial
    training, have been raised as key concerns by the Administration, key
    DHS stakeholders, and union representatives.
        Question. When do you anticipate that the ``demonstration project''
    to test the new Department of Homeland Security pay-for-performance
    system will be operational within the U.S. Coast Guard?
        Answer. We anticipate that the U.S. Coast Guard will be completely
    operational by January 2006.
        Question. When do you anticipate that the new pay system will be
    fully implemented and operational across the entire Department?
        Answer. At this point we anticipate that the new system will be
    operational in all of DHS by January 2007.

                    FUNDING TRANSFERS/LEGISLATIVE PROPOSALS

        Question. The President's budget proposes legislation to transfer
    the $153 million emergency food and shelter program to the Department
    of Housing and Urban Development, and indicates that enactment of
    authorizing legislation will be pursued to return the $400 million
    Strategic National Stockpile back to the Department of Health and Human
    Services. The fiscal year 2005 funding request for the Department of
    Homeland Security assumes no funding for either of these programs. Will
    the requisite legislative proposals be transmitted to the Congress as
    soon as possible and support given for their enactment into law prior
    to the start of the appropriations process?
        Answer. FEMA is currently working with the appropriate authorizing
    and appropriations committees on the legislative language to transfer
    the Emergency Food and Shelter program to the Department of Housing and
    Urban Development in accordance with the President's fiscal year 2005
    budget request.
        The President's fiscal year 2005 Budget includes $400 million for
    the Strategic National Stockpile (SNS) and proposes transferring this
    program to the Department of Health and Human Services (HHS). Language
    to effectuate the transfer of SNS from DHS to HHS has been added to
    S.15, the Project Bioshield Act of 2003.
        Question. Another request in the fiscal year 2005 budget is for
    appropriations language to credit revenues and collections of security
    fees to the Federal Protective Service. As I understand it, these
    revenues and collections are currently credited to the General Services
    Administration's Federal Buildings Fund. Is this requested
    appropriations language sufficient to authorize the transfer of fee
    collections from the General Services Administration to the Department
    in lieu of a legislative proposal? Why?
        Answer. Prior to the transfer of the Federal Protective Service
    (FPS) from the General Services Administration (GSA) to the Department
    of Homeland Security (DHS), GSA collected security fees from its client
    agencies as a part of the rent bill. GSA deposited the collections into
    the Federal Building Fund and allocated the security funds in support
    of FPS law enforcement and security operations. In fiscal year 2005,
    GSA will serve as the billing agent for these fees. The GSA will
    continue to bill the security fees concurrent with the rent billing
    process, but the security revenue will be deposited directly to the FPS
    account. The revenues and collections will not be deposited into the
    Federal Buildings Fund and no transfer to FPS will be required. The FPS
    will continue to be funded by offsetting collections, and the
    appropriations request represents the obligational authority necessary
    to spend the estimated revenues and collections received for law
    enforcement and security services that FPS will provide.
        This process is consistent with the authorities transferred to the
    DHS in the Homeland Security Act of 2002 (Public Law. 107-297, Sec. 403
    and Sec. 422) and the authorities vested in and retained by the
    Administrator of GSA.

                  DEPARTMENT OF HOMELAND SECURITY HEADQUARTERS

        Question. The fiscal year 2005 budget requests $65.1 million to
    consolidate Department of Homeland Security headquarters operations at
    the Nebraska Avenue complex (NAC). It also indicates that the
    administration will propose legislation to transfer the ownership of
    the Nebraska Avenue complex from the Navy to the General Services
    Administration.
        When will the legislative proposal to transfer the ownership of the
    Nebraska Avenue complex be submitted to the Congress?
        Answer. The legislation was transmitted to the House on February
    12, 2004 and the Senate on February 18, 2004. Since the NAC is
    currently owned by the Navy, the Majority Leader's office referred the
    proposal to the Senate Armed Services Committee (SASC). While the SASC
    has included its version of the Administration proposal in the annual
    defense authorization bill, the Department is concerned that delays in
    passage of that larger legislation will hamper DHS' mission to ensure
    our Nation's security. The Department will continue to work with the
    appropriate Committees to expedite the consolidation of DHS
    headquarters operations at the NAC.
        Question. Is the $65.1 million requested for relocation of the Navy
    and improvement of existing structures at the Nebraska Avenue complex
    contingent on the enactment into law the authorization of this
    transfer?
        Answer. The $65.1 million will fund improvements at the NAC as well
    as the cost to relocate Naval operations to alternate facilities.
    Without enactment of the legislation transferring ownership of the
    property to GSA, the Navy will not be able to complete their moves from
    the NAC due to the Defense Base Realignment Act (BRAC.
        Question. The fiscal year 2004 appropriations Act provides $20
    million to the Department for alteration and improvement of facilities
    and for relocation costs necessary for interim housing of the
    Department's headquarters' operations. Please update us on the use of
    these funds.
        Answer. To date, $7,411,789 has been obligated: $4,657,220 for Navy
    Relocation, $2,344,569 for space preparation in Building 1 (Sec/Dep
    Sec), Building 3 (1st and 3rd floor swing space), Building 7,
    Facilities and Security Badging, and $410,000 for Architectural and
    Engineering Services for Buildings 1, 4 and 5.
        The remaining $12,588,211 is committed for Building 19, 1st and 2nd
    floors for Information Analysis and Infrastructure Protection (IAIP)
    and Buildings 4 and 5 for Border Transportation Security (BTS), Public
    Affairs and Citizenship and Immigration Services (CIS). The design/
    space layout for Building 19 is at approximately 70 percent completion,
    and design/space layout for Buildings 4 and 5 is at 100 percent.
        Question. Once the Nebraska Avenue complex is transferred from the
    Navy to the General Services Administration (GSA) as proposed, won't
    the Department be required to make rental payments to the GSA on this
    location? Is this additional cost assumed in the Department's fiscal
    year 2005 budget? If not, why? What will be the estimated annual rental
    of space payment on the Nebraska Avenue complex once it is transferred
    from the Navy?
        Answer. Yes, rental payments to General Services Administration
    (GSA) will be required. Our fiscal year 2005 request includes $14
    million ($4 million increase from fiscal year 2004) for department-
    related rent expenditures.
        GSA is currently conducting building condition evaluations and a
    site appraisal. We will not have refined cost until these activities
    are complete. However, through consultation with GSA, DHS is currently
    estimating the following rental costs:
      --fiscal year 2005 $5.8 million (staggered occupancy)
      --fiscal year 2006 $13.1 million (mostly occupied)
      --fiscal year 2007 $14.4 million (fully occupied)
        These estimates are based on the following rent breakout:

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Base Rent.................................  $29.00 per rentable square
                                                 feet (prsf)
    Operating Rent............................  8.90 prsf
    T/I Allowance.............................  4.64 prsf
    GSA Fee of 8 percent......................  3.80 prsf
                                               -----------------------------
          Total...............................  46.34 prsf (for 5 year
                                                 period)
                                                43.06 prsf (for 10 year
                                                 period)
    Average Approx............................  45.00 prsf \1\
    ------------------------------------------------------------------------
    \1\ Does not include parking.

                           United States Coast Guard

        Question. The fiscal year 2005 budget request proposes
    consolidating all of the research and development components of each
    agency within the Department of Homeland Security into the Science and
    Technology Directorate, to include the Coast Guard's Research,
    Development, Test and Evaluation account. The fiscal year 2004 enacted
    level for research and development within the Coast Guard was $14.9
    million; however, this budget proposes only $13.5 million for Coast
    Guard research and development within Science and Technology.
        Can you explain the approximately $1.4 million decrease in
    requested funding for the Coast Guard's research and development?
        Answer. The fiscal year 2004 and earlier CG R&D appropriations
    included project funds in addition to operating costs of the CG R&D
    Center at Avery Point, CT. The $13.5 million requested in the fiscal
    year 2005 S&T budget does not include any project funds; the request is
    intended to fund only facility and personnel (support and technical)
    costs at the Coast Guard (CG) R&D Center. This level is consistent with
    prior year costs. The fiscal year 2004 enacted level was a significant
    reduction from the fiscal year 2004 request of $22 million and prior
    year appropriations causing an imbalance between operating costs and
    project funding for fiscal year 2004.
        Question. Will this line item for Coast Guard research and
    development continue to be decreased in subsequent fiscal years until
    there is one lump-sum research and development account within Science
    and Technology for all of the agencies at the Department of Homeland
    Security?
        Answer. No. The Science and Technology Directorate (S&T) and Coast
    Guard (CG) are preparing a formal agreement that will detail the
    coordination and funding mechanisms for future CG R&D capabilities. The
    foundation for that agreement is the consolidation of funding requested
    in the fiscal year 2005 budget. S&T and the CG have further agreed upon
    a base level of additional project funding in the amount of $5 million
    that will be specifically targeted toward non-security related projects
    including maritime science and research. This funding will be designed
    to support CG mission-programs such as Marine Environmental Protection,
    Living Marine Resources, Search and Rescue, Aids to Navigation and
    Marine Safety. The specific projects in support of these mission-
    programs will be prepared annually for S&T concurrence.
        In addition to this $18.5 million in funding, the Coast Guard will
    submit security-related research requests through S&T for coordination
    across all portfolios and DHS components. The Coast Guard has submitted
    a maritime security R&D portfolio detailing approximately $50 million
    in vital maritime security research initiatives. This portfolio has
    been validated by S&T portfolio managers and will be considered in the
    development of future spending priorities and commitments from S&T.
    Project funding levels for CG and other DHS component requests will
    depend on the risk and cost associated with the project, effect on
    agency missions, linkage to S&T strategic objectives, and
    executability.
        Question. How will consolidating the research and development
    account into Science and Technology affect the Coast Guard in general,
    in terms of control over research projects of particular interest to
    the Coast Guard and access to all ongoing research at the Department?
        Answer. Through its portfolio manager at S&T, the CG will have
    direct access to, and visibility of all S&T research and initiatives.
    The CG will, at a minimum, retain control of the projects in support of
    its non-Security mission programs. The integration of funding and
    effort will go far to minimize redundancy and maximize the
    effectiveness of Coast Guard R&D while ensuring that all Coast Guard
    mission requirements remain a key part of S&T planning and resource
    decisions.
        Question. How will this consolidation directly affect the Coast
    Guard Research and Development Center in Groton, Connecticut?
        Answer. There are currently no plans by DHS S&T to make changes to
    the location or personnel staffing levels of the CG R&D Center.
                                     ______

                   Questions Submitted by Senator Ted Stevens

                         ALASKA-CANADA BORDER SECURITY

        Question. The Department of Homeland Security has recently
    indicated that it is formulating plans to increase security along the
    Alaska-Canada border. What steps will the Department of Homeland
    Security take to ensure that the heightened security along the border
    will not negatively impact the shipments of goods to Alaska?
        Answer. Inordinate delays with Alaska-Canada at Alaska-Canada's
    border with truck cargo are not anticipated. Truck traffic is
    relatively small at the border ports of entry. In addition, most of the
    cargo is low risk and easily and quickly scanned for radiation with
    personal radiation detectors.
        This is in spite of the fact that since 9/11, several measures have
    been implemented to increase security along the Canadian/Alaskan
    border. Staffing has increased significantly due to various
    Congressional initiatives. Additional physical barriers have been
    installed at multiple crossing points, and several other security
    implements have been employed to further ``harden'' the border between
    Alaska and Canada.
        The ports of Skagway and Dalton Cache are now operational 24 hours
    a day, 7 days a week (24/7). Additional staffing and operational hours
    have increased CBP's vigilance at these two important ports of entry.
    The port of Alcan continues to operate on a 24/7 schedule.
        The port of Poker Creek, a busy, seasonal crossing, is now jointly
    staffed by CBP and Canada Border Services Agency personnel. This
    collaboration has led to a safer, more efficient, border security
    operation.
        The staffing enhancements and scheduling changes have helped to
    meet the new challenges posed by the recent implementation of the Bio-
    Terrorism Act. CBP continues to work with carriers, importers,
    commercial fishermen, and even professional dog sled mushers to
    minimize potential disruptions and delays. To date, there haven't been
    any problems and we don't anticipate any.

                                  COAST GUARD

        Question. The fiscal year 2005 Homeland Security budget includes
    $6.2 billion for the United States Coast Guard. Does this amount ensure
    that the Coast Guard will comply with Section 888 of the Homeland
    Security Act? This provision requires that the Coast Guard maintain its
    traditional missions of Search and Rescue, Fisheries Enforcement, Drug
    Interdiction, and Aids to Navigation.
        Answer. The Coast Guard will continue to support all the programs
    specified in Section 888 of the Homeland Security Act. The Coast
    Guard's fiscal year 2005 budget proposes budget authority of $7.46
    billion, a 9 percent increase over fiscal year 2004, and continues the
    Coast Guard's effort to enhance capability and competencies to perform
    all safety and security missions. Due to the Coast Guard's multi-
    mission nature, full support of the Coast Guard's fiscal year 2005
    budget proposal, which includes funding for Integrated Deepwater
    System, Rescue 21, Response Boat-Medium and Great Lakes Icebreaker
    projects, will assist in the performance of all mission areas. Coast
    Guard is gaining capacity with operational funding of eleven 87-foot
    Coastal Patrol Boats and five 179-foot Patrol Coastals transferring
    from the Navy. These additional assets will provide more resource
    hours, which will be applied to all mission areas. However, even with
    this additional funding, the Coast Guard must be judicious in the
    allocation of a finite resource base across traditional and homeland
    security missions to effectively deliver essential daily services to
    the American public.
        To successfully do this, the Coast Guard is working to develop a
    Strategic Blueprint, which provides a description of the strategies and
    processes for allocating Coast Guard resources to reduce risk within
    each mission program, and to accomplish stated performance goals. The
    post-9/11 environment demands that the Coast Guard focus on reducing
    risk and strive to achieve performance goals in each program through a
    continual examination of its authorities, capabilities, competencies
    and partnerships. The Strategic Blueprint documents how the Coast Guard
    enables the operational commander to make decisions regarding the
    employment of resources to counter risks in an ever-changing
    environment.
        Question. The United States Coast Guard recently completed a
    successful test of two ``Predator A'' unmanned aerial vehicles in King
    Salmon, Alaska. The Coast Guard will test a ``Predator B'' unmanned
    aerial vehicles in Alaska during the month of June. Do you consider the
    use of Predators and other unmanned aerial vehicles to be a cost
    effective tool to assist the Department with maintaining traditional
    and security related missions?
        Answer. Yes, the use of Unmanned Aerial Vehicles (UAV) is a cost
    effective tool to meet some operational requirements for DHS and the
    Coast Guard. The Coast Guard's current Integrated Deepwater System
    (IDS) implementation plan includes the acquisition of two types of
    UAVs, the High Altitude Endurance UAV and the Vertical Takeoff and
    Landing Unmanned Aerial Vehicle (VUAV), with the goals of increased
    Operational Effectiveness (OE) and reduced Total Ownership Costs (TOC).
    The Coast Guard is currently acquiring the Bell HV-911 ``Eagle Eye'' as
    the Vertical Takeoff and Landing Unmanned Aerial Vehicle (VUAV) for
    shipboard deployable operations. The VUAV is a short-range, low
    maintenance aircraft, which will allow the Coast Guard to extend the
    surveillance, classification and identification capability of its major
    cutters through its speed, range, and endurance and do so more cost
    effectively. This asset will be used for maritime homeland security,
    search and rescue missions, enforcement of laws and treaties including
    illegal drug interdiction, marine environmental protection, and
    military preparedness.
        To mitigate risk and learn more about using Medium and High
    Altitude Long Endurance (MALE/HALE) UAVs, the Coast Guard has conducted
    demonstrations in Alaska to evaluate the efficacy of using MALE/HALE
    UAVs, like the Predator UAVs, for Maritime Domain Awareness (MDA).
    These demonstrations are also building organizational partnerships
    within DHS, NASA, DOD and the private sector for the future use of
    UAVs. DHS and the Coast Guard have had limited experience with UAV
    operations, and no experience with Beyond Line of Sight UAV operations.
    The results of the exercises and subsequent data analysis will assist
    in the development of tactics, techniques and procedures for use in any
    future DHS/USCG UAV operations (including Predator B), and will be used
    to develop, validate, verify or accredit ongoing environmental,
    operational, regulatory, and cost benefit studies.

                             NATIONAL ALERT SYSTEM

        Question. Last year, Congress included $10 million to improve our
    national alert system. We directed the Department of Homeland Security
    to report on how the existing nationwide radio network, administered by
    NOAA, can be expanded so that it can reach more citizens. It was
    intended that Homeland would consult with the FCC to develop a system
    that would be ubiquitous and would cross a full range of mediums and
    technologies to alert the public to a terrorist threat. For instance,
    Americans should be alerted to a threat through the use of not just
    radio but also wireline and cellular telephones, e-mail and instant
    messaging systems, radio and television broadcasts, and personal
    digital assistants. The report was also supposed to evaluate how the
    system is being tailored to send out regional threats in addition to
    nation-wide threats.
        This report was due on December 15, 2003. Mr. Secretary, it is my
    understanding that the Appropriations Committee has not yet received
    the report. Please tell us what the status is.
        Answer. The congressional report has been cleared by OMB and the
    Department. We anticipate delivery of the report to the congressional
    Appropriations Subcommittees by May 21, 2004.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

             NATIONAL INFRASTRUCTURE SIMULATION AND ANALYSIS CENTER

        Question. Secretary Ridge, the Department of Homeland Security has
    taken ownership of the National Infrastructure Simulation and Analysis
    Center, or NISAC. NISAC was developed by Sandia and Los Alamos National
    Laboratories to simulate and analyze various events and the cascading
    effects on critical infrastructure in the United States. Following the
    September 11th terrorist attacks, NISAC took on added importance as the
    Administration and Congress focused on homeland security.
        The fiscal year 2004 Homeland Security Appropriations Act had
    approximately $23 million for NISAC. Would you please give the
    Subcommittee the status of the allocation of the fiscal year 2004
    funding?
        Answer. The Homeland Security Appropriations Act of did not contain
    a specific line item for the National Infrastructure Simulation and
    Analysis Center. However, the Department obligated $20 million in
    November 2004 for NISAC efforts that will be performed by Los Alamos
    National Laboratory ($10 million) and Sandia National Laboratory ($10
    million). Some of the planned NISAC activities include chlorine
    industry studies, analyses of rail system and electric power
    disruptions, assessments of Hurricane Isabel impacts on infrastructure,
    port and inland waterway modeling, as well as urban infrastructure
    modeling.
        Question. How much is in the President's fiscal year 2005 budget
    request to support activities by NISAC?
        Answer. The fiscal year 2005 request for the NISAC is $27 million.
        Question. What are some of the activities envisioned in the fiscal
    year 2005 budget for NISAC?
        Answer. NISAC fiscal year 2005 activities are expected to include
    expansion of the Center's efforts to develop National and Regional
    Tools into additional regions and cities of the Nation. Additionally,
    NISAC will begin developing consequence analysis and decision support
    tools to support the following:
      --Expansion of the urban infrastructure suites models for
            transportation, telecommunications, water, public health and
            energy to additional high threat urban areas.
      --Expansion of the dynamic simulation models to selected east and
            west coast ports.
      --Expansion of the interdependent energy infrastructure simulation
            system
      --Expansion and testing of the waterways asset prioritization tool in
            concert with the U.S. Coast Guard and Army Corps of Engineers.
      --Continued expert analysis and support to short term actions for the
            Department's primary missions by using the Center's developing
            infrastructure models and creating new ones where necessary.
        Question. One of the items that transferred from the Department of
    Energy to the Department of Homeland Security with NISAC was an
    appropriation of $7.5 million for the construction and equipping of a
    NISAC facility at Kirtland Air Force Base in Albuquerque, New Mexico,
    which is adjacent to Sandia National Lab. Those funds have not been
    released for their intended purpose.
        What is the delay in moving forward on this important facility?
        Answer. The Homeland Security Appropriations Act did not explicitly
    appropriate $7.5 million for a NISAC facility Nonetheless, the
    Department is drafting a letter to the Department of Defense to begin
    the necessary coordination to build a DHS building on DOD property. We
    expect to initiate site surveys, followed by a possible site selection
    this summer. DHS has retained sufficient funds to complete the survey
    and site selection process.
        Question. What is the status of the $7.5 million appropriation
    specifically for the NISAC facility? Are those funds being held for the
    intended purpose?
        Answer. Yes.
        Question. When can the Subcommittee expect the Department of
    Homeland Security to break ground on the NISAC facility in New Mexico?
        Answer. The program manager has initiated discussions with the
    Kirkland Base Commander concerning the availability of suitable sites
    on Kirkland for the NISAC and we have begun coordination with the
    Department of Defense to address requirements for building a DHS
    facility on DOD property. The groundbreaking date will be dependent on
    the identification of a suitable site for the NISAC.

                        UNMANNED AERIAL VEHICLES (UAVS)

        Question. Secretary Ridge, I have written to you on two different
    occasions in support of exploring the option of using unmanned aerial
    vehicles (UAVs) to monitor our borders, particularly the Southwest
    border. I also noticed in your testimony that there is $10 million in
    the President's Budget to ``plan, procure, deploy and operate unmanned
    aerial vehicles.'' In New Mexico, we have some experience with UAVs. In
    fact, the Physical Sciences Laboratory at New Mexico State University
    operates a Department of Defense sponsored UAV validation and test
    facility. Because of the already established presence of UAVs in New
    Mexico, I have also invited you to visit Las Cruces to see for yourself
    this work and evaluate Las Cruces as a potential site for housing the
    UAV wing responsible for border surveillance.
        Given the $10 million request for UAVs, can you expand upon the
    plans you have for them?
        Answer. U.S. Customs and Border Protection has been evaluating the
    possibilities of using UAV technology to enhance its border security
    mission since June 2003. The initial evaluation process indicates that
    UAVs may indeed have a role in that mission. A pilot program is
    underway to acquire a UAV system and deploy it to various border areas
    to further evaluate their effectiveness and to further develop concepts
    of operation utilizing UAVs in CBP's mission. The $10 million budget
    request will support that effort in fiscal year 2005 during which a
    fully self-supporting UAV package will be leased either via an existing
    DOD-owned contract or through a competitive CBP procurement process.
        Question. How many UAVs does the Department currently have?
        Answer. DHS does not possess any UAV systems.
        Question. How many UAVs does the Department plan to acquire?
        Answer. Several agencies including CBP, Coast Guard and TSA
    regularly coordinate UAV programs in a working group. The working group
    is currently developing high-level requirements to be applied towards
    any future DHS-wide acquisition of UAVs. No concrete commitment has yet
    been made towards the type or quantity of UAV system acquisition due to
    the variety of needs and requirements among the agencies.
        The Coast Guard's current Integrated Deepwater System (IDS)
    implementation plan includes the acquisition of two types of UAVs, the
    High Altitude Endurance UAV and the Vertical Takeoff and Landing
    Unmanned Aerial Vehicle (VUAV), with the goals of increased Operational
    Effectiveness (OE) and reduced Total Ownership Costs (TOC). The Coast
    Guard is currently acquiring the Bell HV-911 ``Eagle Eye'' as the
    Vertical Takeoff and Landing Unmanned Aerial Vehicle (VUAV) for
    shipboard deployable operations.
        Question. Where does the Department plan on stationing these UAVs?
        Answer. UAV usage within DHS is in the very early developmental
    stages. A number of potential sites are being considered and no final
    decisions have been made at this time.
        Question. When can you join me in Las Cruces to evaluate the Las
    Cruces International Airport as a potential home for the UAV program?
        Answer. I appreciate the Senator's offer and respectfully suggest
    that our staffs try to coordinate a future departmental visit to that
    site.

    CHARTER FLIGHTS TO FEDERAL LAW ENFORCEMENT TRAINING CENTER IN ARTESIA,
                                   NEW MEXICO

        Question. Secretary Ridge, as you know, one of the Federal
    Government's premier training sites for law enforcement officers is
    located in Artesia, New Mexico. It is known as FLETC-Artesia (Federal
    Law Enforcement Training Center). When terrorists attacked us in
    September of 2001, Congress quickly required the training of hundreds
    of new Air Marshals. It was FLETC-Artesia that met the impressive
    challenge of training these new Air Marshals, quickly ramping up the
    program and bringing in three 727's to be used in this training.
        FLETC-Artesia is also the campus chosen to provide training for
    airline pilots who choose to carry firearms in the cockpit (also known
    as Federal Flight Deck Officers). They provide this training in
    addition to basic and advanced training for a number of other agencies.
        Feedback from trainees who have been to Artesia is almost
    universally positive. In fact, one of the few complaints has to do with
    one of its greatest assets--its location. Because Artesia is over 3
    hours from the nearest large cities (Albuquerque and El Paso), there is
    a lot of wide open space to conduct training exercises. Unfortunately,
    it is also difficult to get to Artesia--this is the biggest complaint.
    The good news is that I believe there is a solution to this problem. I
    have been working with the officials at FLETC-Artesia, FLETC
    Headquarters in Glynco, Georgia, and in the Border and Transportation
    Safety Directorate on a plan to provide charter services from a major
    air hub, like Dallas-Fort Worth, to Roswell, which is a 30 minute bus
    ride from FLETC-Artesia. Ultimately, I believe the airlines will see
    how beneficial this is to them and will schedule regular service along
    this route. I also believe the client-agencies will quickly see the
    benefits of shorter travel times, fresher students, and better trained
    employees.
        FLETC-Artesia recently put out a Request for Information seeking
    feedback from airlines who might provide this service. My understanding
    is that the response was positive and that estimates are that it would
    take $800,000 to provide this service for the rest of the fiscal year.
        As a member of the Homeland Security Appropriations Subcommittee, I
    joined with my colleagues in deciding not to earmark that bill. This
    meant that there was no opportunity for me to work with my colleagues
    to place money in that bill for this project. Instead, we left it up to
    you to determine how best to spend the money to protect our Homeland.
    Will you commit to improving the training of our Federal law
    enforcement officials by approving funds for this charter service?
        Answer. In the post September 11, 2001 period, there has been real,
    sustained growth in the use of all FLETC training centers, including
    the Artesia, NM center. Although the absence of regular and reliable
    service to the Artesia area has been an obstacle to wider use of that
    location in the past, recently we have increased utilization to almost
    capacity because the FLETC Glynco site is at maximum capacity and the
    agencies need to train within specific timeframes. FLETC is
    experimenting with conducting more basic training programs at Artesia
    in fiscal year 2004 and there has been increased use of the site for
    Flight Deck Officer training, among others, for specialized training.
    With this in mind, FLETC will track closely the issues and usage of the
    Artesia site and report back their findings in fiscal year 2005. Should
    the travel service continue to be a problem, the Department will
    consider looking at other possible solutions, including some
    subsidizing of air service into the Artesia area. This may require
    additional authorizing language.
        Question. How can we in Congress help provide the best training
    possible for our Federal law enforcement officers, particularly within
    the Federal Law Enforcement Training Center?
        Answer. Both Congress and the Administration share a common goal of
    ensuring all Federal law enforcement officers have the opportunity for
    the highest quality training, especially in this period of national
    concerns with security of the homeland. The Department of Homeland
    Security (DHS) is indebted to your leadership and that of others in
    Congress, who have long and actively supported the concept of
    consolidated training that is represented by the Federal Law
    Enforcement Training Center (FLETC). Since the events of September 11,
    2001, FLETC has undertaken increasingly more training responsibilities
    and we are proud of the achievements that have been made by the FLETC
    staff and, indeed, its 76 partner agencies. With the generous support
    of Congress, FLETC has added many new facilities and improved upon the
    delivery of critical training, such as terrorism, first responder, and
    international financial crimes over the last few years. In addition to
    FLETC's Glynco, GA, Artesia, NM, and Cheltenham, MD training sites, the
    DHS has entrusted two other sites to FLETC for law enforcement training
    in Charleston, SC and Harpers Ferry, WV in fiscal year 2004 and fiscal
    year 2005, respectively. At this point, we believe the resources,
    funding, and support for consolidated training are meeting fully the
    changing dynamics of Federal law enforcement training.

                                FIRST RESPONDERS

        Question. Secretary Ridge, as you know, long before the terrorist
    attacks of September 11, New Mexico Tech was working as part of a
    consortium with Louisiana State University and Texas A&M to provide
    training to first responders. Since the attacks the need for this
    training has become more important.
        How much is included in the President's fiscal year 2005 Budget for
    the training of first responders?
        Answer. $92 million is included in the President's fiscal year 2005
    Budget for the training of first responders. As well, states and
    localities may choose to use their grant funding to support additional
    training.
        Question. There has been a lot of discussion about standardization
    of equipment used by first responders. What are your thoughts about
    standardization of training for first responders?
        Answer. The Office for Domestic Preparedness (ODP) is the principal
    component of the Department of Homeland Security (DHS) responsible for
    preparing the United States for acts of terrorism. In carrying out its
    mission, ODP is the primary office responsible to providing training,
    funds for the purchase of equipment, support for the planning and
    execution of exercises, technical assistance and other support to
    assist states and local jurisdictions prevent, plan for and respond to
    acts of terrorism ODP provides more than 30 different types of training
    courses. These courses are tailored for a broad spectrum of emergency
    responders, including fire service, hazardous materials, law
    enforcement, emergency medical services, public health, emergency
    management, public works agencies, governmental administrative,
    healthcare, and public safety communications
        ODP's training efforts fall into three different categories: (1)
    in-residence (training provided at one the National Domestic
    Preparedness Consortium (NDPC) facilities), (2) on-site or mobile
    training (training provided at a local agency by request through an
    NDPC member or other ODP training partner), and (3) Website-based
    training. In-residence or ``residential training'' occurs at one of the
    five members of the National Domestic Preparedness Consortium (NDPC).
    On-site training is provided by either one of the members of the NDPC
    or through one of ODP's other training partners. This training is
    provided directly at a State or local first responder agency upon
    official request through that state's state administering agency for
    ODP funds. ODP's Website-based training efforts are administered by the
    Texas Engineering and Extension Service, which offers three online
    courses for emergency responders.
        ODP draws on a large number of resources to develop and deliver a
    comprehensive national training program. In addition to the NDPC, ODP
    works with a large number of national associations and organizations,
    along with other agencies from the local, State, and Federal levels, to
    provide training to our Nation's emergency prevention and response
    community. This approach aligns closely with the President's National
    Strategy for Homeland Security issued in July 2002, which called for a
    consolidated and expanded training and evaluation system to support the
    Nation's emergency prevention and response community.
        To ensure compliance with nationally accepted standards, these
    courses have been developed and reviewed in coordination with other
    Federal agencies, including the Centers for Disease Control and
    Prevention (CDC), the Department of Energy, the Environmental
    Protection Agency (EPA), the Federal Bureau of Investigations (FBI),
    the Federal Emergency Management Agency (FEMA), as well as with
    professional organizations such as the International Chiefs of Police,
    the International Association of Fire Chiefs, and the National
    Sheriff's Association.
        Question. What potential do you see for future use of this
    consortium?
        Answer. New Mexico Tech recently entered into negotiations for the
    purchase of the town of Playas, New Mexico. This former mining town was
    virtually abandoned when the mine was closed. New Mexico Tech plans to
    use this town as a real-world training site.
        Question. What role do you foresee Playas playing in the training
    of first responders?
        Answer. Playas will be jointly developed by the New Mexico
    Institute of Mining and Technology and the New Mexico State University
    using funds already made available to the New Mexico Institute of
    Mining and Technology through the Department of Homeland Security's
    Office for Domestic Preparedness (ODP). As you are aware, ODP has
    funded the New Mexico Institute of Mining and Technology since Fiscal
    year 1998 as part of the National Domestic Preparedness Consortium.
        As part of the Consortium, the New Mexico Institute for Mining and
    Technology supports ODP's mission of assisting State and local
    governments plan and prepare for incidents of domestic terrorism by
    providing critical training to the Nation's first responders.

                         SCIENCE AND TECHNOLOGY FUNDING

        Question. Secretary Ridge, the Department of Homeland Security has
    a significant research budget to develop new technologies to secure the
    United States against terrorist attacks. I know that the Department has
    made significant progress in setting up the mechanisms to allocate
    science and technology funding to industry, universities, and national
    laboratories. This is a vital mission of your Department.
        I understand that the Department is still in the process of
    allocating fiscal year 2003 science and technology funding. What is the
    current time line for completing this allocation of funding?
        Answer. The Science and Technology Directorate has ``execution
    plans,'' that is, identified scope of work, for all remaining fiscal
    year 2003 funds and fully expects to have all remaining funds allocated
    by the end of fiscal year 2004.
        Question. The Department is now engaged in the allocation of fiscal
    year 2004 science and technology funding. How do you plan to allocate
    fiscal year 2004 funding in a more timely manner?
        Answer. The Department of Homeland Security has existed now for
    just over a year. Like the rest of the Department, the Science and
    Technology Directorate has been working hard to develop effective and
    efficient procedures and policies, including those necessary for
    selection of performers of the work to be done and the subsequent
    contractual processes and allocation of funds. As these procedures get
    established, projects will be awarded and funded in a more timely
    manner. I am pleased to say that in the last 3 months, the Science and
    Technology Directorate has made significant progress in allocating its
    available funding into the hands of those researchers who are
    developing and transitioning the vital technologies and tools to make
    the Nation safer. Both the Under Secretary for Science and Technology
    and I will continue to monitor the status of project selection and
    funding, and expect to see continued progress.
        Question. I note that this year, the Department's budget submission
    is improved over last year as one would expect. Although there are
    security considerations, could you describe your plans to ensure
    transparency in the Department of Homeland Security budget? Both the
    Departments of Defense and Energy make their supporting budget
    documents public. Will you follow suit
        Answer. The Science and Technology Directorate prepares its annual
    Congressional Justification in an open and unclassified manner and will
    continue to do so as long as programs do not move into the sensitive
    realm. In addition, the Science and Technology Directorate prepares its
    written testimony for the record for each of its budget-related
    hearings in an unclassified document. This written testimony contains
    the supporting documentation for its budget request and becomes
    publicly available.
        Question. One of the biggest challenges in the science and
    technology area has to be coordinating the allocation of funding
    between near-term and applied technology and basic, long-term R&D
    funding.
        What level of coordination is being provided by your office, Mr.
    Secretary, to ensure an appropriate split between near-term and long-
    term R&D?
        Answer. I have delegated the responsibility for determining the
    appropriate split between near-term and long-term research and
    development to the Under Secretary for Science and Technology and he
    keeps me and others informed, although the final responsibility is
    mine. In the approximately 1 year that this Department has been in
    existence, the Science and Technology Directorate has focused its
    initial efforts on near-term development and deployment of technologies
    to improve our Nation's ability to detect and respond to potential
    terrorist acts. However, we recognize that a sustained effort to
    continually add to our knowledge base and our resource base is
    necessary for future developments. Thus, we have invested a portion of
    our resources, including our university programs, toward these
    objectives. The following table indicates the Science and Technology
    Directorate's expenditures in basic research, applied research, and
    development to date, excluding construction funding.

                                   SCIENCE AND TECHNOLOGY DIRECTORATE R&D INVESTMENTS
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year     Fiscal year
                                                                        Fiscal year        2004            2005
                                                                       2003 (actual)    (estimated)     (proposed)
    ----------------------------------------------------------------------------------------------------------------
    Basic...........................................................             $47            $117             $80
    Applied.........................................................              59              56             229
    Developmental...................................................             398             608             643
                                                                     -----------------------------------------------
          Total.....................................................            $504            $781            $952
                                                                     -----------------------------------------------
    Percent basic...................................................             9.3            15.0             8.4
    ----------------------------------------------------------------------------------------------------------------

        Our initial expenditures in basic research are heavily weighted by
    our investments in university programs. These university programs will
    not only provide new information relevant to homeland security, but
    will also provide a workforce of people who are cognizant of the needs
    of homeland security, especially in areas of risk analysis, animal-
    related agro-terrorism, bioforensics, cybersecurity, disaster modeling,
    and psychological and behavioral analysis. In addition, the Science and
    Technology Directorate is allocating a portion of its resources to
    high-risk, high-payoff technologies and expects to gradually increase
    its investments in long-term research and development to a level
    appropriate for its mission and the Department.
        Question. What do you envision as the role of the Department of
    Homeland Security in investments in future R&D to meet homeland
    security requirements?
        Answer. At the current time, the Science and Technology Directorate
    is working hard with available funds to fill critical gaps in our
    Nation's ability to prevent, protect against, respond to and recover
    from potential terrorist attacks; however, we are all well aware that
    it is only with a strong investment in long-term research that we can
    we feel confident we are maintaining a robust pipeline of homeland
    security technologies to keep us safe for the decades to come.
    Successful businesses reinvest 10-15 percent of their total budget in
    research and development; the Science and Technology Directorate will
    strive in future years to invest a similarly significant portion of its
    resources into long-term research.

                           INTERAGENCY COLLABORATION

        Question. Mr. Secretary, the Department of Homeland Security
    combines the programs and personnel for many Federal agencies. Creating
    a culture as one department is a real challenge, but there are
    capabilities throughout the Federal Government that can assist your
    Department in meeting homeland security threats.
        I would encourage the Department to develop strong positive
    relationships with other Federal departments and agencies where there
    is opportunity for collaboration and cooperation to make your job
    easier.
        Is it correct that your Department has worked with both the
    Department of Energy and the National Nuclear Security Agency (NNSA) as
    it develops its programs to meet homeland security threats?
        Answer. The Department of Homeland Security has worked very closely
    with the Department of Energy (DOE) and NNSA from the very early stages
    of the development of the Science and Technology (S&T) program. The DOE
    laboratories provided extensive technical expertise and advise
    regarding the S&T program development.
        Question. How would you characterize these interactions?
        Answer. The Department's interactions with DOE and NNSA have been
    very positive. The Department of Homeland Security's (DHS's) S&T staff
    has an open communication relationship with DOE senior managers as well
    as with the DOE field personnel. Since some of the S&T staff came from
    DOE, there are close ties and good relationships that facilitate
    developing the processes of how DOE and DHS work together. When issues
    arise, they are quickly elevated so that communication occurs between
    the appropriate parties in both Departments and a resolution achieved.
        Question. What potential do you see for future collaborations?
        Answer. The Department of Homeland Security fully expects to
    continue and enhance its collaborations with the DOE and NNSA, as well
    as other Federal agencies conducting work of relevance to homeland
    security. For example, the S&T Directorate is committed to utilizing
    the extensive capabilities of all DOE laboratories and to engage them
    in all aspects of our research, development, testing and evaluation
    (RDT&E) program. The Directorate's Office of Research and Development
    is developing an enduring RDT&E capability through stewardship of the
    homeland security complex. To meet the Federal stewardship goal, the
    DOE laboratories will play a significant role in assisting in the
    strategic planning of the threat-based programs such as radiological/
    nuclear and biological countermeasures programs. The DOE laboratories
    also have significant existing capabilities and facilities for
    addressing terrorist threats, thus DHS will contribute support for some
    existing DOE facilities and reach-back into these unique capabilities.
    In addition, the DHS University Scholars and Fellows program is working
    with the DOE laboratories to place students with DOE mentors.
        Question. The science and technology directorate at the Department
    has had discussions with the DOE national laboratories in such areas as
    radiological and nuclear and bioterrorist threats. The labs have
    significant capabilities to assist the Department of Homeland Security.
    Do you envision these collaborations continuing? Are there any barriers
    to such activities? If so, can Congress assist in addressing these
    issues?
        Answer. The Department's Science and Technology Directorate will
    continue to utilize the DOE laboratories to address S&T requirements
    including key threat areas such as radiological, nuclear and biological
    countermeasures. Collaborations between DHS and DOE have been very
    successful to date, and the Science and Technology Directorate plans to
    continue these collaborations well into the future. There are currently
    no barriers to these collaborations. If circumstances change, the
    Department will bring this to the attention of Congress.

                            FEMA--CERRO GRANDE FIRE

        Question. Mr. Secretary, when FEMA joined your Department, you
    inherited the Cerro Grande fire assistance program. The devastating
    Cerro Grande Fire occurred in New Mexico in May 2000. This fire
    consumed almost 48,000 acres of forest, destroyed nearly 400 homes and
    caused damage or injury to 1,000 families, countless businesses, the
    county of Los Alamos, the State of New Mexico, four Indian pueblos, and
    Los Alamos National Laboratory.
        I would remind my colleagues that this fire was started by the
    Federal Government when a controlled burn at Bandelier National
    Monument burned out of control. For that reason, the Congress enacted
    the Cerro Grande Fire Claims Assistance Act of 2000, and appropriated
    $455 million to FEMA to establish a claims program to compensate
    victims of the fire.
        The fiscal year 2004 Homeland Security Appropriations Act included
    $38.1 million to continue paying claims under the Act. Based upon
    information from the Department, the conferees on the fiscal year 2004
    bill stated that, and I quote, ``this funding will fully cover all
    remaining Cerro Grande fire claims'' (end quote).
        Would you please provide the Subcommittee with a summary of the
    claims activity under the Cerro Grande Fire Assistance Act of 2000?
    Please include the number of claims filed, processed, approved, and
    declined by category of claim (individual, business, Native American,
    governmental).
        Answer. The Office of Cerro Grande Fire Claims (OCGFC) has received
    a total of 21,515 claims: 13,700 individual/household claims; 1,861
    business claims; 6 Pueblo/Native American claims; 20 governmental
    claims; and 4,562 subrogation claims from the insurance industry. The
    balance of the claims consisted of small-dollar-amount claims, not-for-
    profit claims, or streamlined claims (both business and individual
    claims under $10,000). With the exception of the pending appeals and
    arbitrations (see answer below), virtually all of the claims have been
    resolved. OCGFC has not kept records by category on the numbers of
    claims approved in whole or in part, or denied in whole or in part.
        Question. Please provide the Subcommittee with information on the
    number of claims that have been appealed and the general status of
    those appeals.
        Answer. OCGFC has received 718 Administrative Appeals, of which
    only 28 are still pending. The remainder have been accepted, denied, or
    withdrawn. Of the 135 arbitrations that have been filed with OCGFC, 120
    arbitrations are complete, and 15 arbitrations are pending.
        Question. What is the status of subrogation claims for insurance
    companies that assisted individuals and businesses in the immediate
    aftermath of the fire? Will insurance companies be adequately
    reimbursed for their expenses, and what factors are taken into account
    in determining their appropriate payments?
        Answer. Of the 4,562 subrogation claims filed with OCGFC, all but
    42 were determined to be eligible. OCGFC has made 56 percent partial
    payments on the subrogation claims. We have reimbursed insurers and
    reinsurers only the amounts that they paid out under their insurance
    policies, and we have not reimbursed subrogation claimants for their
    expenses of administering the claims they received from their insureds.
    These expenses are currently the subject of litigation.
        Question. Finally, what is the status of the funding remaining for
    Cerro Grande fire claims and for administrative expenses?
        Answer. As of March 25, 2004, $55,596,000 remained in available
    claims funds and $950,000 was available to cover administrative
    expenses. 5. Is it correct that there is sufficient funding remaining
    under current appropriations to satisfy pending claims, anticipated
    favorable appeals, and subrogation claims by insurance carriers? If
    not, what is the estimated amount needed to fulfill these obligations?
        Answer. We believe that there are sufficient funds to settle all
    remaining claims.
                                     ______

                Questions Submitted by Senator Richard C. Shelby

        Question. Mr. Secretary, the President's request provides $50
    million for the Center for Domestic Preparedness (CDP). This is $5
    million below the fiscal year 2004 enacted level and well below the
    level necessary to train our Nation's first responders. As you point
    out in your budget justification the CDP is the only live agent
    training facility available to our Nation's first responders. With a
    budget of $75 million, the CDP can train almost 100,000 first
    responders. This is almost twice the 55,000 they plan to train this
    year with $55 million. The CDP serves a vital role in our Nation's
    first response capability. Could you please explain then, why the CDP's
    budget has been cut for fiscal year 2005?
        Answer. As you know, the Center for Domestic Preparedness is a
    Department of Homeland Security-owned and operated facility that
    provides training to our Nation's emergency responders. CDP offers live
    chemical agent training--the only facility in the world that provides
    such training to civilian emergency responders. CDP has provided
    training for emergency responders since it was established in 1999, and
    is widely recognized as a world leader in the training of emergency
    response personnel in the handling of live chemical agents.
        The CDP has received significant funding over the years. The
    President's fiscal year 2005 budget request provides $50 million for
    the continued operations of the Center. This level is equal to the
    amount requested by the Administration in the fiscal year 2004 request.
    Beginning in fiscal year 2005, the NDPC funding will be used solely to
    cover their fixed operating expenses. States will be required to pay
    for the costs of sending their emergency responders to NDPC facilities.
    The NDPC facilities, therefore, will not have to cover the full-costs
    of participating emergency responders, which reduced enrollment
    flexibility. This flexibility will likely allow NDPC members to train
    additional emergency responders without incurring the additional travel
    and financial costs of enrollment.
        Additionally, the Department and ODP are strongly encouraging
    states to institutionalize awareness and performance level training at
    State facilities. One of the overarching goals of the Homeland Security
    Grant Program, which will provide more than $2.2 billion to states and
    territories in fiscal year 2004, is to provide sufficient resources to
    allow states and territories to develop their own capacity to offer
    awareness and performance level training courses. The Department and
    Administration will continue to support this effort in fiscal year
    2005, which will allow NDPC members to concentrate on specialized
    training courses.
        Question. Mr. Secretary, in your statement you mentioned that you
    have provided $20 million for planning and exercises associated with
    medical surge capabilities. What assets does DHS plan to commit to
    training medical personnel to respond to large scale disasters or a WMD
    event?
        Answer. DHS currently is planning to use the Noble Training Center
    to assist in training medical personnel for medical surge capability.
    In the President's Budget for fiscal year 2005, DHS has requested an
    increase of $15 million to develop one fixed and one mobile medical
    surge hospital module, and an increase of $5 million for associated
    planning, training, and exercises to validate and demonstrate the
    medical surge capacity provided by these modules. The fixed module
    would essentially consist of a package of hospital supplies, equipment,
    materials, etc., that could be pre-positioned in a high risk area and
    quickly inserted into or assembled in a pre-existing space, facility,
    or structure to provide hospital capabilities. Similarly, the mobile
    module would consist of a complete package of hospital supplies,
    equipment, materials, etc., that could be rolled in from another
    location and placed in a pre-existing structure, or the mobile module
    would include the structure (trailers, tents, etc.) in which the
    hospital would be housed. Planning, training, and exercises associated
    with the use of these modules will allow the concept to be refined.
    Additionally, this activity will help in identifying potential
    locations, factoring in significant criteria including: overall
    population of the jurisdiction; population density in and around the
    location; hazards and risk prevalent in the location (including
    natural, technological, and terrorist incidents); existing hospital
    capacity, strength, and organization; and existing medical response and
    public health system.
        The major elements of the medical surge capacity enhancement
    program will include facility, equipment, supply, and pharmaceutical
    procurement; leased space for storage of field facilities; salaries and
    benefits for additional staff required for equipment maintenance, and
    program and fiscal management; dedicated ground transportation for
    field facilities; life-cycle costs for equipment, pharmaceutical, and
    supply replacement; field exercises and system evaluations;
    identification and implementation of corrective actions; and
    development of web-based interactive and hands-on training curricula
    for facility set-up, maintenance, operation, and demobilization.
        Also, through the National Disaster Medical System (NDMS) Online
    Training Program, NDMS is responding to the need to improve the ways in
    which its response team medical personnel respond to large-scale
    disaster and weapons of mass destruction (WMD) events. The training
    program is designed specifically for disaster responders; providing the
    critical information needed to help them better perform their jobs
    under the most austere conditions. The online training program ensures
    that NDMS response team medical personnel will have appropriate
    orientation and training for optimal field performance.
        Training opportunities are also offered during the annual NDMS
    Conference. With several pre-conference, main, and plenary sessions and
    training demonstrations available, NDMS response team medical personnel
    are provided access to the latest in emergency management, disaster
    response, and coordination capabilities. Additional training is also
    provided to NDMS response team medical personnel through their State-
    and locally sponsored exercises and training courses. These exercises
    and training courses are designed to enhance organization and rapid
    response capability.
        Question. Recently, the President in Homeland Security Presidential
    Directive #8 defined a ``first responder'' as: those individuals who in
    the early stages of an incident are responsible for the protection and
    preservation of life, property, evidence, and the environment,
    including emergency response providers as defined in section 2 of the
    Homeland Security Act of 2002 (6 U.S.C. 101), as well as emergency
    management, public health, clinical care, public works, and other
    skilled support personnel (such as equipment operators) that provide
    immediate support services during prevention, response, and recovery
    operations.'' Wouldn't you agree that medical and hospital personnel
    are crucial to ``preservation of life''? Why then have we done so
    little to ensure they are prepared?
        Answer. Medical, public health and hospital personnel are an
    essential component of the Nation's response capability. The Department
    of Homeland Security recognizes their importance, as has Congress. The
    Department, through programs administered by the Office for Domestic
    Preparedness (ODP) and the Federal Emergency Management Agency (FEMA),
    provides support to the emergency medical services and to hospital
    providers.
        ODP, in particular, administers the Homeland Security Grant Program
    and the Urban Areas Security Initiative, which provide funds to states
    and urban areas, respectively, to enhance homeland security efforts
    across the Nation. In fiscal year 2004, ODP will provide more than $2.2
    billion to states, localities, and the emergency response community
    through HSGP. Additionally, through UASI, ODP will provide an
    additional $746 million. Emergency medical personnel, including
    Emergency Medical Technicians (EMTs) and ambulatory services, and
    hospitals and hospital providers are eligible to receive assistance
    through these two programs. HSGP and UASI fund a range of activities,
    including the acquisition of specialized equipment, the provision of
    training, and exercise support.
        ODP also administers a robust training program through the National
    Domestic Preparedness Consortium (NDPC). Through the NDPC, along with
    other training partners, ODP offers nearly 40 courses for the emergency
    response community. As part of the training effort, emergency medical
    personnel and public health officials are eligible to attend a number
    of different courses offered. A few examples of the training courses
    that emergency medical and public health officials are eligible to
    attend include: ``Emergency Response to Terrorism: Basic Concepts,''
    ``Emergency Medical Services: Basic Concepts for WMD Incidents,''
    ``Emergency Response to Domestic Biological Incidents--Operations
    Level,'' ``Emergency Medical Services Operations and Planning for
    WMD,'' and ``Hospital Emergency Management: Concepts and Implications
    of WMD Terrorist Incidents.''
        In fiscal year 2005, DHS and FEMA will be responsible for two
    programs that strive to prepare medical and hospital personnel to deal
    with mass casualty incidents: the National Disaster Medical System
    (NDMS) response teams and the Noble Training Center. Both have major
    linkages in supporting the ``first responder'' infrastructure.
        NDMS is a coordinated effort by FEMA and other Federal agencies, in
    collaboration with the States and other public and private entities, to
    provide health and medical services to the victims of public health
    emergencies. The System organizes approximately 8,000 intermittent
    Federal employees into more than 107 medical and specialty response
    teams. The System can also provide for patient evacuation and
    definitive medical care of disaster victims.
        The incorporation of NDMS into DHS has improved response capability
    by enhancing coordination between health and medical response
    organizations and other functional disaster response activities. This
    will ensure that future planning and response efforts are well-
    coordinated and efficient. The reorganization has centralized emergency
    response functions within one Department. This will also allow for the
    sharing of training activities and programs to include local, State,
    and Federal disaster drills and field exercises, and will enhance the
    coordination of logistical functions that support emergency response,
    thereby improving the efficiency and effectiveness of the response.
    This reorganization will also ensure that threat information is
    received in a timely manner and will enable increased readiness actions
    to be taken in order to reduce response time.
        The Noble Training Center (Noble) also transferred from HHS to DHS.
    While the program resided at HHS, a 5-year strategic plan was developed
    for it by a consortium of universities that included Vanderbilt
    University, the University of Alabama at Birmingham, and Louisiana
    State University. The strategic plan identified immediate and continued
    training needed for medical first responders, as well as for the
    medical community, to be able to quickly identify and treat victims of
    a WMD attack. The plan identified training needs for hospital emergency
    room physicians and nurses, emergency medical technicians and
    paramedics, and hospital engineers and administrators. This training
    would include treatment modalities relating chemical, biological,
    radiological, and nuclear assaults to ensure that all hospital
    personnel, including medical, engineering, and administrative, would be
    prepared to effectively treat victims. In addition, Noble is currently
    working with HHS' Health Resources and Services Administration and its
    Hospital Preparedness program to train some of the grantee hospital
    personnel at Noble this year.
        In addition to the work that ODP is doing in this area, the
    Department is working with the Department of Health and Human Services
    (HHS) on a related project called Project BioShield. The fiscal year
    2005 request includes $2.5 billion for this effort to encourage the
    development and pre-purchase of necessary medical countermeasures
    against weapons of mass destruction, and improved bio-surveillance by
    expanding air monitoring for biological agents in high-threat and high-
    value targets such as stadiums and transit systems. This provides
    significant funds for this effort, which was funded at $885 million in
    fiscal year 2004. Further, the President's fiscal year 2005 budget
    request includes $20 million for the Department's Emergency
    Preparedness and Response Directorate for studies and pilot programs
    for medical surge capabilities. Also, since 2001, over $4.5 billion has
    been made available in Federal public health preparedness grants for
    counterterrorism.
        Comment.--The Noble Training Center (Noble) at Fort McClellan,
    Alabama was established as a medical training center for medical first
    responders. According to FEMA, ``Noble Training Center is unique in
    that it is the only hospital facility in the United States devoted to
    medical training for hospital and healthcare professionals in disaster
    preparedness and response.'' From fiscal year 1999 to fiscal year 2001,
    I helped send additional resources to Noble to help them build their
    capability, much like what was done at CDP.
        However this money seems to have disappeared and today Noble has,
    to my knowledge, not grown in capability or capacity to train medical
    personnel. While I understand that much of this took place while Noble
    was under the direct control of the Public Health Service, it is my
    understanding that virtually no activity has taken place at the Noble
    Training Center since DHS took control.
        Question. Will the Department make a habit of allowing valuable
    assets to sit unused?
        Answer. DHS is making extensive use of the Noble Training Center
    and is very pleased to have Noble as an element in the DHS training
    system. During fiscal year 2003, the Department delivered the most
    ambitious schedule of training ever at Noble, and it is delivering an
    even greater slate of activities during fiscal year 2004.
        For fiscal year 2003, DHS delivered the schedule of training
    activities that the Department of Health and Human Services (HHS) had
    set up and offered a number of FEMA courses at Noble. Activities for
    the year included several offerings of the ``Healthcare Leadership and
    Administrative Decision-making in Response to WMD Incidents'' course,
    which was conducted under contract by Auburn University and its
    subcontractors, which included the University of Alabama at Birmingham,
    Vanderbilt University, and Louisiana State University. DHS delivered
    additional courses at Noble in partnership with the Centers for Disease
    Control and Preparedness (CDC) to prepare CDC's emergency response
    teams. One of the Department's goals for fiscal year 2004 is to train
    more than 1,300 students at the facility. The total number of students
    trained in all prior years was 2,274.
        Question. What is the Department doing to correct this poor use of
    taxpayer's money?
        Answer. When Noble was transferred to DHS in March 2003, it was
    assigned to FEMA. FEMA officials quickly analyzed the situation at
    Noble, inspecting the facility and examining instructional programs. At
    the time, Mike Brown, Acting Under Secretary for EP&R, established the
    following priorities for Noble: (1) correct deficiencies in the
    infrastructure to ensure that the facilities and systems would support
    a world-class training activity; (2) maximize the utilization of Noble
    by offering a full schedule of first-rate instructional programs
    targeted at planning and response for mass casualty events; and (3)
    integrate Noble into the DHS/FEMA training system managed by the United
    States Fire Administration, which includes the National Fire Academy
    and the Emergency Management Institute (EMI). Efforts to meet these
    goals began at once. In addition to offering the aggressive schedule of
    training described above, DHS also:
      --Awarded a contract to the SEI Group, Inc. of Huntsville, Alabama,
            to manage the Noble physical facility
      --Awarded a contract to DECO Security Services, Lorton, Virginia, to
            provide security for the facility
      --Arranged for classroom support to be provided through an existing
            EMI contract
      --Continued work on a $1 million healthcare weapons of mass
            destruction (WMD) curriculum development project with Auburn
            University and its subcontractors (Work on this project is
            scheduled for completion by June 30, 2004.)
        During fiscal year 2004, in addition to a full slate of
    instructional programs, the following key activities are underway to
    improve the Noble facilities:
      --Update Noble's phone system and computer network
      --Renovate 2 dormitory buildings to provide housing for 160 students
            at a time
      --Retrofit the third floor of Noble to create a state-of-the-art
            exercise and simulation training area
        Question. I would like to know specifically, how many hospital and
    healthcare professionals have been trained at Noble Training Center and
    how many Federal dollars have been spent at Noble to date?
        Answer. Since its inception, Noble has conducted the following
    training:

    ------------------------------------------------------------------------
                        TRAINING ACTIVITY                      PARTICIPANTS
    ------------------------------------------------------------------------
    Hospital Leadership and Decision-making.................             717
    National Pharmaceutical Stockpile Training..............             293
    Integrated Health and Medical WMD Training..............             250
    Emergency Coordinator Augmentee.........................             150
    Nunn, Lugar, Domenici Hospital Preparedness.............              54
    Epidemic Intelligence Service (WMD).....................             277
    Mass Immunization Training..............................              63
    Tactical Emergency Medical Service in a WMD incident....              36
    Hazardous Materials for Healthcare Train-the-trainer....              41
    Integrated Emergency Management for CDC response staff..             162
    Emergency Response to Domestic Bioterrorism.............              20
    Critical Actions Aimed Toward Emergency Response........              76
    Radiological Emergencies (Commissioned Corps)...........             135
                                                             ---------------
          Total Participants................................           2,274
    ------------------------------------------------------------------------

        Based on careful analysis of HHS records and FEMA's current
    spending plan, by the end of fiscal year 2004, HHS and DHS will have
    spent approximately $17.8 million on the Noble Training Center. This
    figure excludes salary and expenses for two full-time Federal employees
    at Noble and student expenses paid directly by HHS. The by-year
    breakdown is as follows:

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Fiscal year 1999........................................      $2,800,000
    Fiscal year 2000........................................         845,000
    Fiscal year 2001........................................       1,500,000
    Fiscal year 2002........................................       4,000,000
    Fiscal year 2003........................................       1,369,092
    Fiscal year 2004........................................       7,300,000
                                                             ---------------
          TOTAL.............................................      17,814,092
    ------------------------------------------------------------------------

        Comment.--Just around the corner from Noble is the Center for
    Domestic Preparedness, the pinnacle of first responder training. The
    CDP has been a training facility for roughly the same amount of time as
    Noble. This fiscal year CDP is scheduled to train in excess of 50,000
    first responders. I can only guess that the differences are due to
    management.
        Question. Can you explain to me why these two centers are in such
    contrast?
        Answer. We cannot address HHS' utilization of Noble. However, since
    DHS assumed responsibility for Noble in March 2003, it has played a key
    role in the Department's overall efforts to prepare emergency
    personnel, and it is an important part of the Department's plans for
    the future. Noble has joined FEMA's training team, which will train
    more than 250,000 personnel in fiscal year 2004.
        Question. How many responders do you plan to train at Noble this
    year?
        Answer. We expect to train 1,320 personnel at Noble in fiscal year
    2004 in the following courses:
      --7 ``Healthcare Leadership for WMD Incidents'' courses for 490
            participants
      --6 Metropolitan Medical Response System exercise-based, integrated
            emergency management courses for 420 participants
      --3 CDC partnership courses for 180 personnel
      --9 Radiological Emergency Response Operations courses for 230
            participants
        Based on funding of approximately $4.3 million we have maximized
    our deliveries as we ramp up effort for fiscal year 2005 and for fiscal
    year 2006. The Noble facility cannot currently accommodate as many
    students as can the CDP facility, given existing facility sizes and
    infrastructure.
        Question. How much do you propose to spend in these efforts?
        Answer. In fiscal year 2004, $4.3 million is allocated for the
    Noble Training Center. Additional funding from other DHS sources is
    expected to bring total expenditures for Noble this year to
    approximately $7.3 million.
        Question. Is there any action being taken to tap into the expertise
    of the CDP?
        Answer. Yes. Collaboration between the CDP and FEMA training
    officials has been in progress for some time. We are currently working
    on the following plans:
      --Consolidating student support services and logistical support
            between CDP and Noble
      --Conducting joint medical training for first responders
      --Conducting outreach training for Tribal emergency personnel
        Question. What are your intentions for Noble in the next 2 years?
        Answer. We are making extensive use of the Noble Training Center
    (Noble) and are very pleased to have it as an element in the Department
    of Homeland Security (DHS) training system. During fiscal year 2003,
    DHS delivered the most ambitious schedule of training ever offered at
    Noble, and is undertaking an even more ambitious slate of activities in
    fiscal year 2004.
        Noble was transferred to DHS in March 2003, and was assigned to the
    Emergency Preparedness and Response Directorate (EP&R)/FEMA. FEMA
    officials quickly analyzed the situation at Noble, inspecting the
    facility and reviewing instructional programs. At that time, Acting
    Under Secretary for EP&R Mike Brown established three priorities for
    Noble: (1) Correct infrastructure deficiencies to ensure that the
    facilities and systems would continue to support world-class training
    activities; (2) maximize the utilization of Noble by offering a full
    schedule of first-rate instructional programs targeted at planning and
    response for mass casualty events; and (3) integrate Noble into the
    training system directed by DHS' United States Fire Administration,
    which manages the National Fire Academy and the Emergency Management
    Institute (EMI). Efforts to meet these goals began at once and continue
    today. In addition to offering an aggressive schedule of training, FEMA
    has also:
      --Awarded a contract to manage the Noble physical facility to the SEI
            Group, Inc. of Huntsville, Alabama
      --Awarded a contract to provide security for the facility to DECO
            Security Services, Lorton, Virginia
      --Arranged for classrooms and support to be provided through a pre-
            existing contract supporting the EMI
      --Continued work on a $1 million healthcare weapons of mass
            destruction (WMD) curriculum development project with Auburn
            University and its subcontractors (Work on this project is
            scheduled for completion by June 30, 2004.)
        During fiscal year 2004, in addition to a full slate of
    instructional programs, the following key activities are underway to
    improve the Noble facilities:
      --Update of Noble's phone system and computer network
      --Renovation of 2 dormitory buildings to provide housing for 160
            students
      --Retrofitting of the third floor of Noble to create a state-of-the-
            art exercise and simulation training area
        DHS expects to train 1,320 personnel at Noble in fiscal year 2004
    in the following courses:
      --7 ``Healthcare Leadership for WMD Incidents'' courses for 490
            participants
      --6 Metropolitan Medical Response System (MMRS) exercise-based
            integrated emergency management courses for 420 participants
      --3 Centers for Disease Control and Prevention (CDC) partnership
            courses for 180 personnel
      --9 Radiological Emergency Response Operations courses for 230
            participants
        In fiscal year 2005, using the existing funding level and
    leveraging other funding sources, DHS plans to train 2,125 participants
    as follows:
      --7 Healthcare Leadership courses for 420 participants
      --8 MMRS exercise-based integrated emergency management courses for
            600
      --5 Hospital Emergency Management courses for 150 personnel
      --4 Hospital Emergency Incident Command System train-the-trainer
            offering for 120 participants
      --7 Radiological Emergency Response Operations courses for 155
            responders
      --1 Advanced Radiological Incident Operations training course for 30
            responders
      --1 Radiological program train-the-trainer course for 30 trainers
      --5 Response Team training for CDC staff, with a total of 300
            participants
      --8 Disaster cadre training courses (various titles) for 320 students
        In addition, EMI is currently assessing training needs for the
    National Disaster Medical System cadre. While the cadre's initial
    training is currently offered online, Noble is being considered for use
    in meeting some of the cadre's exercise-based course requirements.
        Also, for fiscal year 2005, DHS will continue to collaborate with
    the Center for Domestic Preparedness (CDP), and plans to join forces
    with CDP to deliver training. This joint training will simulate the
    responder/hospital personnel interface that is critical during a mass
    casualty event.
        Comment.--When we began this adventure, it was my belief that the
    proximity of CDP and Noble would allow us to provide one of the best
    comprehensive incident response training programs in the country. Not
    only do we have the only live agent training facility, but just around
    the corner is ``the only hospital facility in the United States devoted
    to medical training for hospital and healthcare professionals in
    disaster preparedness and response.'' This would provide the
    opportunity for municipalities, communities, regions and states to know
    that their responders are prepared from the site of the incident
    throughout the hospital, not just to the emergency room door. This is
    an opportunity for comprehensive training that must not be ignored if
    we expect our first responders and medical personnel to act fluidly in
    the event of a disaster.
        Question. I would like your thoughts on this concept.
        Answer. While each organization has its special expertise, we
    believe that bringing CDP and other FEMA training activities closer
    together will greatly enhance services for the Nation's emergency
    responders.
        Question. Mr. Secretary, I continuously hear of concerns from my
    localities regarding the speed at which funds are dispersed to their
    final destination. What is the Department doing to ensure that these
    funds are put to use more quickly?
        Answer. The Department of Homeland Security takes seriously our
    responsibility to provide resources to our Nation's emergency
    prevention and response community and to ensure that this assistance is
    provided in most efficient, effective and responsible manner. I believe
    that Congress also supports this goal. Indeed, Congress has provided
    strict timeframes within the last several appropriations acts for the
    Office for Domestic Preparedness (ODP) and the Department of Homeland
    Security. In the fiscal year 2003 Omnibus Appropriations Act, the
    fiscal year 2003 Emergency Wartime Supplemental Appropriations Act, and
    the fiscal year 2004 Department of Homeland Security Appropriations
    Act, Congress required that ODP allocate funds to states within 30 days
    of the enactment of these acts. Congress further required that states
    apply for their allocated funds within 30 days of the allocation or
    availability of funds. Congress required that ODP make awards to states
    within 30 days of receipt of application, or receipt of updated
    homeland security strategies, whichever was later. Additionally,
    Congress required that states obligate or pass-through funds to units
    of local government within 60 days of receipt of an award from ODP.
        These timeframes have certainly expedited the award of funds to
    states under the Homeland Security Grant Program and the Urban Areas
    Security Initiative. However, some complaints of the slowness of funds
    reaching localities are legitimate and understandable. There are
    certain impediments to localities receiving their funds from their
    states that are outside of the control of the Department of Homeland
    Security. For instance, some states can not accept Federal funds unless
    they have been previously included in their State budget. Depending on
    when the State legislature convenes, the transference of funds and
    support to localities might be delayed. Additionally, as pointed out in
    the December 1, 2003 survey by the National Emergency Management
    Association, a number of other factors at the State and local level
    serve to impede the timely transfer of homeland security funds to
    localities, including State and local bid requirements for Federal
    funds, Further, equipment inventory stock might also prevent speedy
    delivery of equipment to State and local emergency responder agencies.
        The Department and ODP are making every effort to expeditiously
    award funds to states. With the assistance of Congress, we have made
    great strides in providing funds and other assistance to states and
    units of local governments. Unfortunately, because of certain State and
    local restrictions, funds might experience a delay at the State and
    local levels. On March 16, 2004, Secretary Ridge announce that
    formation of the Homeland Security Funding Task Force charged with
    examining the first responders funding process and ensuring Federal
    grant money monies move quickly to the end user: first responders.
        Question. I applaud the consolidation of grants under the ODP. I
    believe a one-stop shop is an important part to making the grant
    process more accessible to all entities. Will you develop a mechanism
    to ensure that funds are used in a manner that ensures the proper
    distribution of assets? Will the different grants be working in
    conjunction? Or in other words how will ODP ensure that the right hand
    knows what the left hand is doing?
        Answer. On January 26, 2004, I announced my intention to
    consolidate the Office for Domestic Preparedness with the Office for
    State and Local Government Coordination to form a new office--the
    Office for State and Local Government Coordination and Preparedness. As
    I explained at the time, this consolidation is in direct response to
    requests from the field, which date back to 1998, to provide State and
    local governments with a ``one-stop-shop'' and one central focal point
    for grants, assistance, and other interactions related to homeland
    security.
        This consolidation will place 25 various State and local support
    programs and initiatives within one office to ensure simplified and
    coordinated administration of these programs. I firmly believe that
    this consolidation will benefit both DHS and the State and local
    emergency response community. As part of this effort, the new Office
    will issue application kits and provide awards that combine several
    different grant programs. ODP took the first step in this direction
    through the fiscal year 2004 Homeland Security Grant Program, which
    combined three separate ODP-administered programs under one single
    application kit. The new Office of State and Local Government
    Coordination and Preparedness will use this combined application kit as
    a model for future grant programs.
        Further, the new Office of State and Local Government Coordination
    and Preparedness will depend on the subject matter experts within the
    agencies previously administering these consolidated programs to ensure
    that invaluable experience and expertise with these programs is not
    lost. The Department is currently working to ensure that that this
    expertise is not lost, but continues to guide the development and day-
    to-day management of these programs. Through these efforts, I am
    confident that the new office will provide assistance to states and
    localities in a more efficient, coordinated, and streamlined manner. I
    appreciate your support for the consolidation and look forward to your
    continued support on this and other Department initiatives.
        Question. Mr. Secretary, your budget provides the Coast Guard with
    $678 million for the Integrated Deepwater System. I remain concerned
    with the Coast Guard's management of the Deepwater procurement and how
    the Coast Guard is prioritizing use of its funds. The Coast Guard and
    OMB appear to have lost sight of the priorities of legacy replacement
    and the goal of reduced operational expenses. Every dollar spent poorly
    in this procurement process delays the Coast Guard's ability to obtain
    the best, most modern equipment to protect the homeland. The funding
    will acquire two UAV's, a National Security Cutter, three SRP's, one
    LRI, and IDS patrol boats. Noticeably absent is the Maritime Patrol
    Aircraft, the CASA CN-235. Why were funds for the MPA not included? How
    does the Coast Guard intend to make up for the loss of this critical
    asset? How many MPA does the USCG intend to purchase? When can we
    expect the Coast Guard to request funding for the MPA?
        Answer. The Coast Guard's fiscal year 2005 budget requests funds
    for the Maritime Patrol Aircraft (MPA) to missionize the third CASA
    aircraft, which was funded for acquisition in fiscal year 2004. This
    missionization includes the logistic complement required for Full
    Operating Capability and partial spare parts used for the logistics
    system start up. The Coast Guard is currently acquiring the CASA CN235-
    300M as the Deepwater MPA. The delivery of the first two MPA is
    scheduled for 2006, with full operational capability in late 2006 or
    early 2007.
        The Coast Guard will use existing aircraft in the Coast Guard
    inventory to ensure the Nation's highest maritime security and safety
    priorities are met until new aircraft are delivered.
        The number of Maritime Patrol Aircraft in the current
    Implementation Plan is 35. Simultaneously, the Coast Guard is working
    to align the Deepwater Program with the strategic goals and objectives
    of the Department of Homeland Security (DHS). DHS Management Directive
    1400 established an Investment Review Process, which included an
    interagency Investment Review Board (IRB) and Joint Requirements
    Council (JRC). The Investment Review Process is designed to ensure that
    spending on investments directly supports and furthers DHS missions;
    optimal benefits and capabilities are provided to stakeholders and
    customers; acquisition oversight of new investments is provided
    throughout their life cycle; and portfolios are managed to achieve
    budget goals and objectives. The Coast Guard is working aggressively
    with the IRB and JRC and its newly chartered Aviation Council to ensure
    capital funds provide the best Departmental investment. The DHS Joint
    Requirements Council (JRC) partially reviewed DHS Aviation Requirements
    in January 2004 at their first meeting. Until DHS and Coast guard
    decisions are made on future aviation requirements, it is difficult to
    project the exact mix of aircraft in the final Deepwater solution.
        The Maritime Patrol Aircraft is an essential element of the
    Deepwater system of systems approach to the recapitalization of Coast
    Guard assets. The Deepwater plan projects future funding for MPAs to
    achieve its long-term project goals.
                                     ______

                   Questions Submitted by Senator Judd Gregg

        Question. Mr. Secretary, I would like to address the matter of the
    Customs Services' ability to meet the increased needs of new and
    growing airports and seaports for inspections services. If Customs is
    not able to expand its services into new, economically growing
    communities around the country then not all areas of the country will
    be able to share in the economic benefits of international trade and
    tourism--and as a result then the economic growth of the Nation as a
    whole will also be restricted.
        My concerns in this regard have been raised by my experience in
    working with Customs unsuccessfully to provide inspection services to
    the Pease International Tradeport in Portsmouth/Newington, New
    Hampshire. When I was governor, I helped take the first steps to create
    the Tradeport following the BRAC closing of Pease Air Force Base with
    the vision of it becoming a commercial air terminal open to
    international flights and thus helping to drive the economy of not only
    New Hampshire, but the entire region.
        Unfortunately, despite spending over $35 million in Federal and
    State funds to build a commercial terminal, according to Customs' own
    specifications, we have been unsuccessful in getting Customs' to either
    approve the use of the facility as is--or to even tell us what the
    post-9/11 modifications are that Customs insists are now needed. Even
    more frustrating has been Customs refusal to provide inspection
    services, even over the short-term, so that DOD chartered aircraft
    currently carrying U.S. military personnel home from Iraq and
    Afghanistan can land and refuel at Pease on their way to the troops'
    ultimate destinations within the United States. While Customs says on
    the one hand that it does not have the manpower to service these 11-15
    flights every 45 days, it also says it could do these inspections at
    current manpower levels--if Pease paid economically exorbitant and
    untenable fees to the Customs service.
        I would note that two Customs inspectors actually have offices on
    Pease Tradeport's premises and the local Air National Guard unit has
    been trained to provided such inspection services; however Customs will
    neither use the local Customs officers or allow the Air National Guard
    unit to provide the necessary inspection services so that the DOD
    charter flights can land at Pease.
        As many of us in New Hampshire had hoped for at Pease Tradeport's
    actual opening in 1998, Pease's close proximity to Boston's Logan
    airport is now becoming an attractive as a convenient point for
    servicing planes and crews of various commercial airlines' domestic and
    international flights, which are increasingly facing difficulties with
    flight scheduling, customs, and gate access due to Boston's limited
    space and heavy traffic. However, Pease Tradeport's value as an
    alternative for airlines is largely negated when Customs is either
    unwilling or unable to provide even minimal inspection services.
        Again, my parochial experience in this regard has raised my
    concerns about Customs--and thus DHS'--ability to expand its inspection
    services into new, economically growing communities throughout the
    country and whether the benefits of international trade and tourism are
    going to be confined to areas of the country that already enjoy them
    for the foreseeable future.
        In light of the 35 percent increase in Customs positions that the
    Congressional Research Service says Congress provided funding for in
    fiscal year 2002 alone, do you feel the President's budget request, if
    approved by Congress, provides the Department with the needed
    flexibility to respond to the need for Customs services to all areas of
    the country that need them, including up and coming areas of the
    country like NH?
        Answer. The Pease International Tradeport issue is currently under
    review by U.S. Customs and Border Protection (CBP), Office of Field
    Operations (OFO). OFO has conducted a study of the facility to
    determine what additional security modifications will need to be
    implemented. The results of this study should be compiled shortly.
        The Department of Homeland Security, in particular CBP, is
    committed to providing security for our Nation without impeding the
    free flow of commerce. The fiscal year 2005 President's Budget should
    provide CBP with the flexibility to align our staff to existing
    workload and provide services where needed.
                                     ______

                   Question Submitted by Senator Larry Craig

               UTILIZATION OF DEPARTMENT OF ENERGY NATIONAL LABS

        Question. Secretary Ridge, on January 30, 2004, you received a
    letter signed by the entire Idaho Congressional delegation expressing
    our objections to guidelines issued by the DHS Office of Research and
    Development. These guidelines describe DHS's approach to the
    utilization of Department of Energy national laboratories. A copy of
    this letter is enclosed herewith. I am aware that you have received
    similar letters from other members of Congress and that issues
    surrounding the implementation of the DHS research agenda may be the
    subject of current GAO investigation.
        How do you intend to address the issues raised in the Idaho
    delegation's letter and when can I expect a response?
        Answer. The Department of Homeland Security, through Section 309 of
    the Homeland Security Act of 2002, is provided access to the national
    laboratories and sites managed by the Department of Energy to carry out
    the missions of DHS.
        The DHS Science and Technology Directorate, wishing to make the
    best use of each of these laboratories and sites in consonance with
    statute, regulation, and policy, asked laboratories and sites to make a
    decision regarding their desired mode of interaction with the
    Directorate--to participate in S&T's internal strategic planning and
    program development processes or, if otherwise permissible under
    applicable law, regulation, contract, and DOE policy, to respond to
    certain types of S&T solicitations open to the private sector.
        On March 31, 2004, the following national laboratories and sites
    communicated their decision to Under Secretary McQueary to participate
    in S&T's internal strategic planning and program development processes:
    Argonne National Laboratory, Bechtel Nevada, Brookhaven National
    Laboratory, Idaho National Engineering and Environmental Laboratory,
    Lawrence Livermore National Laboratory, Los Alamos National Laboratory,
    Oak Ridge National Laboratory, Pacific Northwest National Laboratory,
    and the Sandia National Laboratories. The designation of intramural/
    extramural is therefore no longer necessary for the nine labs under
    consideration.
        An external review will be conducted to assess the baseline
    capabilities of the national labs to provide the Department with an
    enduring capability to meet long-term mission requirements. The results
    of this review will be utilized by the Homeland Security Science and
    Technology Advisory Committee to advise the Department on options for
    establishing a long-term strategic relationship with the national
    laboratories.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                            CHEMICAL PLANT SECURITY

        Question. Mr. Secretary, you and I have previously discussed the
    role of the Department of Homeland Security as it pertains to the
    protection and security of chemical plants in this country. Your
    Department continues to take a ``hands-off'' approach by relying on
    voluntary efforts by the chemical plant industry to assess
    vulnerabilities and take protective actions.
        We know that the EPA has estimated that over 100 plants located all
    over the country could affect over 1 million people, if attacked. We
    know that the Department of Justice released a study in April of 2000,
    concluding that, ``the risk of terrorists attempting in the foreseeable
    future to cause an industrial chemical release is both real and
    credible.'' We know that in February of 2003, the National
    Infrastructure Protection Center (NIPC), which is now part of the
    Department of Homeland Security, issued a threat warning that, ``Al
    Qaeda operatives also may attempt to launch conventional attacks
    against the U.S. nuclear/chemical-industrial infrastructure to cause
    contamination, disruption, and terror. Based on information, nuclear
    power plants and industrial chemical plants remain viable targets.''
        We know that the Homeland Security Act requires DHS to analyze the
    vulnerabilities to our critical infrastructure and take protective
    actions to strengthen them. However, when you testified last year, you
    indicated that the chemical industry was better suited to assess
    vulnerabilities and take appropriate security measures.
        Last November, 60 Minutes reporter Steve Croft and Carl Prine, an
    investigative reporter at the Pittsburgh Tribune-Review, found their
    way in to numerous chemical plants containing dangerous materials
    without a hint of resistance. This revelation clearly highlighted the
    fact that the chemical industry was doing little to nothing to improve
    security at chemical plants.
        A July 2003 survey by the Conference Board found that since 9/11,
    U.S. corporations have increased their spending on security by only 4
    percent.
        Mr. Secretary, do you maintain the position that the chemical
    industry is better suited to assess vulnerabilities and take protective
    actions to secure chemical plants? Does your budget request address
    this issue in any way? If so, how much is included for chemical plant
    security?
        Answer. We look to the private sector as the primary agent of
    change when it comes to assessing vulnerabilities and taking protective
    measures at their individual facilities. As you know, 85 percent of
    critical infrastructures are privately owned. Our role is to provide
    the tools (standards, techniques, best practices) necessary to do an
    effective job. We have a genuine program to assess whether this
    approach is effective and will make adjustments as necessary.
        Several initiatives are underway to help protect the Nation's
    chemical plants. We will spend about $18 million for protective
    measures at the 360 chemical plants on the fiscal year 2004 Protective
    Measures Target List. This amount funds site assistance visits by my
    security specialists to assess vulnerabilities and help establish
    buffer zone protection plans. Approximately $4.1 million is for the
    acquisition of web cam monitors for local law enforcement agencies to
    install on public right-of-ways adjacent to 17 critical chemical sites
    to extend their buffer zones.
        Question. What more can you do to make sure that the chemical
    industry responds with a robust program to secure their plants?
        Answer. DHS Protective Security Advisory Teams visited the 17
    critical sites last year to provide training and assist site personnel
    and local law enforcement develop Buffer Zone Protection Plans to make
    it more difficult for terrorists to conduct surveillance or attack one
    of our facilities.
        For the remaining 343 sites, we will visit each one to provide
    training, support, and recommendations to owners and operators and
    local law enforcement. Each site has its own particular needs. Some
    visits will focus on ``inside the fence'' issues with plant security
    personnel to identify and reduce vulnerabilities. Others will involve
    the development of buffer zones in cooperation with local law
    enforcement. Some sites will need both types of assistance. We intent
    to have visited all 360 chemical facilities by the end of the year. We
    have also published two reports, the Characteristics and Common
    Vulnerabilities Report and the Potential Indicator of Terrorist
    Activity (PI) Report, to assist owners and operators of chemical
    facilities. The former characterizes and discusses common
    vulnerabilities for chemical manufacturing facilities producing and
    handling large quantities of inherently hazardous materials while the
    latter discusses potential indicators and warnings of terrorist
    activity that law enforcement and plant security personnel can use to
    better protect their facilities.
        We have established a protection, training, and planning program
    for State homeland security personnel, local law enforcement, chemical
    facility operators and site security personnel. Periodic drills among
    the protective community will be conducted to exercise the chemical
    facilities plans in the case of a potential terrorist attack and we
    intend to factor chemical plant security into national exercises.
        Finally, the Department is in the process of developing plans for
    deploying a cadre of Protective Security Advisors (PSAs). Each one will
    have responsibility for a specific region of the country and will
    maintain a close relationship with the chemical plant owners and
    operations in their area. The advisors will facilitate information
    sharing, organize protective security training, assist in emergency
    coordination, and represent the Department in the communities in which
    they are posted. Security Augmentation Teams (SATs) are also being
    developed that will consist of approximately 25 personnel drawn
    primarily from major urban SWAT units. The teams will focus on
    protecting high-value sites, such as critical chemical facilities.
    Their operations concept is to develop working relationships with the
    site's permanent protective security team and become familiar with the
    site's specific vulnerabilities. The development of these two programs
    are in the early stages but are being closely monitored by my office.

                                  IMMIGRATION

        Question. How much of a reduction in the more than 6,000,000
    petitions pending with U.S. Citizenship and Immigrant Services do you
    expect to achieve this year with the $160,000,000 requested in the
    President's budget?
        Answer. With the additional resources requested in 2005, USCIS will
    achieve the President's goals of eliminating the backlog and achieving
    a 6-month processing time for all immigration applications by 2006. In
    order to achieve this goal, USCIS will:
      --Reengineer processes to achieve greater efficiencies;
      --Update policies and procedures to streamline adjudications and
            increase the percentage of cases completed at initial review by
            an adjudicator; and
      --Manage production against milestones--beginning with
            collaboratively setting goals, reporting progress, and
            identifying additional improvement opportunities.
        USCIS is finalizing its Backlog Elimination Plan and will provide
    this plan to Congress in the coming months. The plan will include a
    road map to eliminating the backlog with defined milestones.
        Question. How many new petitions do you expect the President's
    Immigration Reform Plan to generate?
        Answer. This information will be available once Congress has
    drafted the legislation and the specifics are known.
        Question. What lessons from the 1986 Immigration Reform and Control
    Act (IRCA) legalization programs have been applied to the President's
    Immigration Reform Plan?
        Answer. The IRCA planning teams developed a strategy that enabled
    the Service to quickly expand its adjudicative capacity through the
    establishment of temporary regional processing centers and local
    interview offices. Temporary employees were hired and trained
    specifically to adjudicate that workload. INS reassigned experienced
    executives and managers at all levels to oversee operations, but relied
    heavily on the skills or retired executives and managers (reemployed
    annuitants). This strategy enabled the Service to continue its efforts
    to process the normal casework plus handle the surge in workload caused
    by the passage of IRCA. Key components of IRCA were: the development of
    the regional processing center concept, development of a modular office
    plan for field interviewing sites, automated data systems to record
    transactions, and receipt of authority from Congress to expedite
    certain leasing and contracting requirements. In addition, INS received
    authority to reemploy annuitants without salary offset. The reemployed
    annuitant program was absolutely critical to the overall success of the
    program.
        INS worked closely with Congress prior to the passage of IRCA, and
    that cooperation was also instrumental in INS being able to meet the
    requirements for the legalization provisions of IRCA.
        Question. What were the total costs of IRCA's two legalization
    programs (please break down by main components) and how much revenue
    was generated in total by the fees charged to process IRCA
    applications?
        Answer. The IRCA program was totally fee-funded. Therefore, the
    number of applications filed and their respective fees determine the
    total cost of the program. Our analysis to date of the program has
    determined a total application workload of approximately 2,700,000,
    with costs/fee revenues totaling $245,000,000. The breakdown of this
    program is as follows: (1) Application for Permanent Residency
    (2.68,000,000 applications/$241 million), (2) Application for Status as
    a Temporary Resident (6,700 applications/$3.7 million).
        Question. How much will the President's Immigration Reform Plan
    cost, and what components comprise the total cost?
        Answer. It is expected that costs associated with the workload
    would be covered with fees like all other application and petition
    processing.
        Question. If the President's Immigration Reform Plan is funded
    through fees, what proportion of the funds will be distributed to U.S.
    Citizenship and Immigrant Services (to adjudicate petitions), to
    Immigration and Customs Enforcement (for investigations and
    enforcement), to the Federal Bureau of Investigations (for background
    checks), to the Department of Labor (for labor certification and
    worksite enforcement), and to the Department of State's Bureau of
    Consular Affairs (for visa issuances)?
        Answer. CIS costs associated with the temporary worker program will
    be covered by application fees. The 2005 Budget requested additional
    funding to support Immigration and Customs Enforcement, an additional
    $23,000,000 to more than double the resources devoted to worksite
    enforcement.
        Question. How many full-time equivalent [FTE] personnel will be
    necessary to implement the President's Immigration Reform Plan? What
    level of fees or additional appropriations would be necessary to hire
    those additional FTEs without further increasing the deficit?
        Answer. This information will be available once Congress has
    drafted the legislation and the specifics are known.

                            Departmental Management

                               DHS HIRING FREEZE

        Question. According to a March 26, 2004 Wall Street Journal
    article, certain DHS agencies have declared a ``hiring freeze'' in the
    Bureaus of Customs and Border Protection and Immigration and Customs
    Enforcement because of a potential budget shortfall of approximately
    $1.2 billion. Could you please explain to the subcommittee whether this
    shortfall is actually a ``computer glitch'' resulting from the
    combining of the budgets from legacy agencies or has the agency simply
    failed to request sufficient funding for front line staffing as it
    continues to roll out new border security initiatives such as One Face
    at the Border, US VISIT, C-TPAT, and C.S.I.?
        Answer. During a review of the status of execution of the fiscal
    year 2004 budget, ICE and CBP determined that implementation of hiring
    restrictions was a prudent managerial measure to ensure that they
    manage their overall requirements within their fiscal year 2004
    appropriations. It was also determined that additional focus was
    required to work through funding realignments related to the
    establishment of the three new Bureaus.
        The Department established a review team composed of staff from the
    Chief Financial Officer's Office, Border and Transportation Security,
    CIS, CBP, ICE, and the Coast Guard to assess the situation. The review
    team engaged in a detailed budget reconciliation effort between the
    three Bureaus resulting in an internal realignment of $212 million with
    possible subsequent internal realignment of approximately $270 million
    pending final documentation and billing. The work has been on-going,
    but agreements have been reached to realign funds to cover costs of
    services incurred by the Bureaus. Formal memoranda of agreement will be
    implemented between the three Bureaus and help ensure that funding is
    aligned with services rendered.
        There is no $1.2 billion shortfall as reported by the Wall Street
    Journal.
        Security initiatives such as One-Face-at-the-Border, US VISIT, C-
    TPAT and CSI were sufficiently funded through the appropriations
    process and are not contributing to accelerated rates of expenditures.
        Question. Funds for these accounts are apportioned on a quarterly
    basis. Was the anti-deficiency act violated for any of the CIS, CBP or
    ICE accounts for fiscal year 2003 or fiscal year 2004?
        Answer. The anti-deficiency act has not been violated for the CIS,
    CBP or ICE accounts in fiscal year 2003 or fiscal year 2004.

                           TSA REPROGRAMMING PROPOSAL

        Question. What is the status of the TSA reprogramming proposal?
        Answer. TSA has proposed a modest reprogramming request for fiscal
    year 2004 in order to meet critical needs. The Department delivered a
    reprogramming request to the appropriations committees on April 23,
    2004. TSA will follow up on answers to questions posed by Committee
    staff who have been briefed on the request.
    FTE
        Provide a chart, broken by DHS agency, that have the following
    headings: fiscal year 2003 on-board end of year, fiscal year 2004 on-
    board current, fiscal year 2004 projected on-board end of year, fiscal
    year 2003 FTE, fiscal year 2004 funded FTE, fiscal year 2005 FTE
    request.

                                                     DEPARTMENT OF HOMELAND SECURITY FISCAL YEAR 2003--2005
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Fiscal
                                                     Fiscal                 year On-
                                         Fiscal     year 2003    Fiscal       board                  Fiscal
             Component/Bureau           year 2003   On-Board    year 2004   Projected    Fiscal     year 2005                     Comment
                                           FTE       End of     On-board     end of     year FTE       FTE
                                                     fiscal     Currently    fiscal
                                                      year                    year
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Border & Transportation Security:
        Office of the Under Secretary           5           5          27          40          67          75
        US VISIT.....................  ..........  ..........  ..........          64          64         102
        U.S. Bureau of Customs &           38,452      40,178  \1\ 41,847  \2\ 41,298  \3\ 40,076      41,001  SEE FOOTNOTE (CBP)
         Border Protection.
        Immigration and Customs            35,955      34,708      15,861      15,000      14,749      15,550  Fiscal year 2003 includes Legacy INS; Fiscal
         Enforcement \4\.                                                                                       year 2004 onboard does not include FTE for
                                                                                                                Federal Air Marshal Service
        Transportation Security            58,612      55,920      51,646      53,046      51,346      52,503
         Administration.
    U.S. Coast Guard--Civilian.......       6,341       6,773       6,717       7,237       6,492       6,821  Direct and reimbursable
    U.S. Coast Guard--Military.......      39,219      39,644      39,981      39,938      39,874      40,259
    U.S. Secret Service..............       6,019       6,209       6,292       6,493       6,381       6,506
    Emergency Preparedness & Response       5,432       5,726       5,682       5,970       4,780       4,776  Direct
    U.S. Citizenship & Immigration          9,625       9,100       8,875       9,000       9,795       9,937  Decrease in on-board due to hiring freeze
     Services.
    Federal Law Enforcement Training          831         908         931         934         934         936
     Center.
    Information Analysis &                    226         226         263         543         729         737
     Infrastructure Protection.
    Science & Technology.............          79          34          57         180         180         218  FTE numbers do not include: sin public health
                                                                                                                service FTE spt S&T; staff at the envir
                                                                                                                measurements lab; staff at PIACD and IPAs
    Departmental Management:
        Departmental Operations......         274         359         445         617         708
        Office for Domestic                   129          57          69         146         146         197
         Preparedness.
        Wireless/IT..................          15           5           5          15          15          15
        Inspector General............         372         396         402         500         457         502
                                      ----------------------------------------------------------------------------------------------------------------------
          Totals.....................     201,312     200,163     179,014     180,849     176,702     180,843
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Note: On-Board are positions not FTE (full time and part time).
    \1\ Fiscal year 2004 on-board is as of 2/7/04 Current on-board numbers are positions not FTE. Full-time 40,227; Part-time 1,620.
    \2\ Consistent with CBP staffing report required by the fiscal year 2004 Appropriations Act. End of year on-board will vary significantly resulting from
      transfer of employees between CBP and ICE. These transfers are result of the organizational realignment required by the creation of DHS.
    \3\ Discretionary and Mandatory FTE that was built off the fiscal year 2003 actual FTE and includes additional positions appropriated by Congress.
      Estimated FTE usage at the end of fiscal year 2004.
    \4\ Does not include FAMS.

                           DHS PERSONNEL REGULATIONS

        Question. Concerns have been raised with regard to the adequacy of
    funding for the Department of Homeland Security, specifically funding
    for first responders and other frontline personnel. In light of funding
    limitations for frontline positions, do you believe spending over $100
    million to design a new pay system is the right priority for DHS? When
    does the department anticipate that the new pay system will be fully
    implemented and operational within all bureaus within DHS? How much of
    the $100 million will actually be used for salaries for front line
    personnel?
        Answer. Our current schedule anticipates that full deployment of
    the new system will be completed in calendar year 2006. None of the
    $100 million will be used for salaries of front-line personnel, but
    rather will support key activities associated with the design and
    deployment of the new HR flexibilities. A sizeable amount ($31 million)
    of this request will be directed to training for front-line employees
    and managers. While $100 million may seem to be a lot, we view this as
    a necessary, and appropriate, investment in our people and the human
    capital systems they work under. We envision the flexibilities
    contained in this language to be a key catalyst to our ability to
    attract and retain the right talent for DHS and believe we will reap
    the benefits from this investment for many years to come.
        Additionally, investments in human resources information technology
    are required to identify further organizational savings and allow the
    eventual redirection of staff resources to front-line work. A 6-year
    life cycle cost of $131 million for human resources information
    technology is projected and is essential to ensure the necessary common
    technology platform to support the successful deployment of HR
    flexibilities and ensure they achieve the intended results. Absent this
    investment in HR technology, it would be difficult, if not impossible
    in some components, to implement the HR flexibilities because of the
    varying quality and maturity of components' existing HR technology
    capabilities.
        Question. What will be the annual cost for conducting the local and
    national pay surveys to private contractors to implement the pay for
    performance system?
        Answer. We have not yet costed-out this service. We do know that
    there are several commercial market survey instruments available to us
    for this purpose, and we have already initiated lessons-learned
    discussions with other Federal agencies that already use a component of
    market-based pay. We have been told by one agency (FAA) that their
    recurring annual survey costs are estimated at $30,000 per year.
        Question. What does DHS believe will be the full cost for
    implementing a new pay system?
        Answer. We are projecting a fully loaded life cycle costs of $408.5
    million to support full system implementation. Major components of this
    figure include the $102.5 million for system implementation, $10
    million for Coast Guard performance pool, an estimated $165 million for
    other component performance pools, and a 6-year life cycle cost of $131
    million for human resources information technology. Some of the
    component performance pools could come from existing salary and expense
    funding spent on within grade and quality step increases.
        Question. How many different pay rates will there be for DHS
    employees in the pay for performance system as opposed to the clear 15
    Grade Ten Step GS pay scale?
        Answer. We are anticipating that there will be between 10 and 15
    major occupational clusters of positions (i.e. administrative, law
    enforcement, etc,). According to our estimates, we are envisioning 4-5
    broad pay bands within each cluster to define entry-level, journey-
    level, senior expert, and supervisory pay groupings.
        Question. What will the annual administrative cost be for the pay
    for performance system?
        Answer. We do not have this level of information yet, but are
    currently benchmarking with organizations with similar systems. We are
    envisioning that the bulk of these recurring costs will be in
    supervisory and managerial training, not salary administration, and
    view that as a positive commitment to the organization and our people.
        Question. How much of the $100 million will be allocated by
    contracts?
        Answer. We anticipate the bulk of the $100 million will be
    allocated by contract. Major breakdown of overall costs includes: $27
    million for program management, oversight and evaluation; $31 million
    for training and communications to support system implementation; $42
    million for detailed systems design and implementation support
    (business process reengineering, compensation expertise, etc.) It's
    important to note that of the one-third allocated for managerial and
    employee training which will likely be managed by contract, there will
    be a direct and tangible deliverable to the government beyond the
    contractor services. Most of the services being provided by contractors
    are those where specialized skills and knowledge are required for a
    fairly short duration.

                            DEPARTMENTAL COMPARISONS

        Question. When compared to the Departments of Treasury,
    Transportation, Justice, and Commerce, the Office of the Secretary of
    the Department of Homeland Security is spending incredible sums of
    money in areas such as Legislative Affairs, Public Affairs, and the
    Chief of Staff. For example, based on fiscal year 2004 enacted numbers,
    the Departments of Treasury, Transportation, Justice, and Commerce have
    an average of 17 and 17.5 FTE respectively in their Public Affairs and
    Legislative Affairs offices. DHS, in contrast, has 43 and 49 FTE in
    these two offices. The Office of the Secretary at DHS spends $8.1
    million on Public Affairs and $5.9 million on Legislative Affairs while
    the other four Departments average $1.6 million each on Public Affairs
    and $1.7 million each on Legislative Affairs.
        The Departments of Treasury, Justice, and Commerce have an average
    of 11 FTE and spend an average of $1.1 million each in their Chief of
    Staff office while DHS has 31 FTE in this office and spends $5 million.
    (Information on the Office of the Chief of Staff for the Department of
    Transportation was not available). Why is DHS spending so much more on
    their Public Affairs, Legislative Affairs, and Chief of Staff Offices
    in comparison to other Departments?

                                   DEPARTMENTAL COMPARISONS FISCAL YEAR 2004--ENACTED
    ----------------------------------------------------------------------------------------------------------------
                                                     Chief of Staff        Public Affairs       Legislative Affairs
                                                 -------------------------------------------------------------------
                                                    FTE        Cost       FTE        Cost        FTE         Cost
    ----------------------------------------------------------------------------------------------------------------
    Dept of Homeland Security...................       31   $5,047,000       43   $8,168,000       49     $5,907,000
    Dept of Transportation......................  .......  ...........       19    1,889,000       24      2,267,600
    Dept of Treasury............................       12    1,393,279       17    1,725,620       13      1,459,292
    Dept of Commerce............................        7    1,109,000       12    1,882,000       12      1,605,000
    Dept of Justice.............................       14      820,859       20      944,187       21      1,506,177
    Average.....................................       11    1,107,713       17    1,610,202       17.5    1,709,517
    ----------------------------------------------------------------------------------------------------------------

        Answer.

                            CHIEF OF STAFF'S OFFICE

        The Chief of Staff's Office currently consists of 31 FTE positions.
    The function of the Office is to support the mission of the Department
    through coordination of the 22 agencies and directorates that have been
    consolidated into the Department of Homeland Security. The Chief of
    Staff's Office is also responsible for all operational functions that
    relate to the Immediate Office of the Secretary (budget, information
    technology, personnel and advance), and offices that fall under the
    budget supervision of the Chief of Staff's Office.
        Confronting one of the largest organizational transformations in
    United States Government history, the Chief of Staff's Office functions
    as the central point for coordinating the massive consolidation and
    reorganization challenges of the new Department. To ensure a high-level
    of initial access and to meet the critical and complex goals of
    Homeland Security's mission, the Chief of Staff's Office includes the
    Office of Policy and the Office of Counternarcotics.
        The Chief of Staff's Office manages the day-to-day activities of
    the Department and assists in guiding the long-term goals of Homeland
    Security. With the inherent challenges of a concurrent creation of a
    new Department, reorganization, consolidation, and several new offices,
    the Chief of Staff's Office seeks to streamline, coordinate, and
    deliver highly effective initiatives and policies that will ensure our
    safety, response capacity and our freedoms.
        To accomplish these goals, the Chief of Staff's Office utilizes the
    Office of Policy to coordinate all policy decisions that affect the
    Department. Due to the rapidly evolving nature of the Department, the
    Office of Policy continues to be a vital facet for developing and
    monitoring the range of issues the Department of Homeland Security
    confronts.
        The Office of Counternarcotics serves a vital function for Homeland
    Security as the Department works to address drug related activities
    that impact the security of our Nation.

                            OFFICE OF PUBLIC AFFAIRS

        The Department of Homeland Security (DHS) is a new department with
    unique responsibilities and a complex mission that includes facets of
    responsibility not undertaken by other government agencies. Consistent
    with the overarching mission of the department, the DHS Office of
    Public Affairs (OPA) has created and maintained several programmatic
    responsibilities to support the department's critical mission areas
    that exceed traditional press office functions.
        The congressional inquiry specifically compares the full-time
    equivalent (FTE) and budget allotment of DHS OPA to the Departments of
    Treasury, Transportation, Commerce and Justice, and requests
    justification for the apparent differences between DHS and the other
    departments.
        There are three primary justifications for the DHS FTE allotment
    and budget:
        Scope of Mission.--DHS Office of Public Affairs contains many
    functions that either do not exist at other agencies or are contained
    in other parts of the organization and are thus funded by those
    offices. These additional functions were strategically placed within
    the Office of Public Affairs to ensure consistency of message to
    external audiences and to develop synergies between these various
    functions. Information follows about the multiple functions that are
    contained within DHS OPA.
        Different Comparables.--Comparing the DHS Office of Public Affairs
    to Treasury, Commerce, DOJ, and DOT is an inaccurate comparison. DHS
    OPA is more analogous to the Department of Defense and the Department
    of State, in terms of the media's interest in department activities,
    the importance of communicating accurate, timely information to the
    public, and the international implications of the department's
    activities.
        In addition, both DOD and DOS public affairs support programmatic
    efforts similar to the Department of Homeland Security, including
    public education campaigns, a speaker's bureau and other public liaison
    functions. It should be noted that DHS's current FTE allocation (43) is
    considerably lower than the public affairs FTEs at the Pentagon (56
    FTEs in just OSD public affairs, excluding the large public affairs
    staffs at the armed services level) and at the Department of State (170
    FTEs at headquarters, excluding embassy public information officer
    staff).
        It should also be noted that DHS has a total of 180,000 employees--
    substantially more than the other departments that DHS is being
    compared to.
        The Department of Homeland Security's mission is to prevent
    terrorist attacks within the United States, reduce America's
    vulnerability to terrorism, and to minimize the damage from potential
    attacks and natural disasters. To support these missions and ensure
    consistency in public information, DHS OPA performs functions not
    included in other department's staffing numbers; either because those
    functions sit elsewhere in the department or they are they are unique
    to DHS. Below is a brief description of these functions and
    specifically how they further the department's mission.
      --Public Education.--The Office of Public Education's goal is to
            create and sustain public education campaigns that raise the
            level of national citizen preparedness. This program directly
            supports the department's mission to reduce America's
            vulnerability to terrorism and to minimize damage in the event
            there is another attack.
          In February 2003, DHS OPA launched the Ready campaign, a
            comprehensive, bilingual public education campaign designed to
            educate and empower Americans to prepare for potential
            emergencies and reduce America's vulnerability to terrorism in
            the event that there is another attack. This campaign
            experienced the most successful launch in Ad Council history
            and continues to grow. With congressional support in 2004, DHS
            hopes to expand the campaign to offer a three-pronged strategy
            for preparing communities: Ready, Ready for Business, and Ready
            for School.
          The Office of Public Affairs has also partnered with the National
            Academies of Science and the Radio and Television News
            Directors Foundation to host ten tabletop exercises designed to
            facilitate real discussion between media and government
            officials about crisis. This program will supply members of the
            media with resources to aid in the dissemination of reliable
            information during a crisis and will provide the government
            with a better understanding for how to best work with media in
            providing critical information to the American public during
            times of crisis.
          Finally, DHS OPA is working to engage the American public
            directly in homeland security issues through a partnership with
            the Council for Excellence in Government (CEG). These CEG town
            hall meetings have taken place across the Nation and top
            officials at the Department of Homeland Security have
            participated to directly hear citizen's concerns and ideas
            firsthand. Additional public education initiatives of this
            nature are in the works for the future as well.
      --Public Liaison.--The goal of the Office of Public Liaison (OPL) is
            to educate key constituent organizations about DHS policy
            initiatives, organize opportunities for dialogue and provide
            groups with one point of contact to exchange information and
            address concerns. Due to the wide range of issues handled by
            the department, the OPL interacts with think tanks,
            associations, ethnic groups, universities, and others. OPL also
            runs the DHS Speakers Bureau, which organizes and responds to
            hundreds of incoming speaking invitations. Placement of the
            Office of Public Liaison within DHS OPA is consistent with DOD
            and DOS.
      --Incident Communications.--The Homeland Security Act of 2002
            outlines DHS authority and responsibilities in the event of a
            possible terrorist attack. DHS OPA has put several processes in
            place to support that legislative mandate as well as Homeland
            Security Policy Directive-5 (HSPD-5), which specifically
            requires the department to inform the American people about any
            terrorist-related events. ``The Secretary shall ensure that, as
            appropriate, information related to domestic incidents is
            gathered and provided to the public . . .'' This requires a
            full crisis management capability that is always in place and
            ready to respond and lead the national effort to comply with
            HSA 2002 and HSPD-5. This is especially true since we lead the
            Interagency Incident Management Group (IIMG).
          The DHS OPA staff has the primary Federal leadership role in
            overseeing the public information components of the National
            Response Plan (NRP) and National Incident Management System
            (NIMS). This includes interagency content coordination as well
            as state/local government and private sector coordination.
            These documents and procedures are cornerstones for all major
            incident public affairs response activity, and ensure that
            Federal, State, and local communicators function as one voice
            in delivering critical information and instructions to the
            public. This function is essential--the public cannot be told
            different information from authority figures during an
            emergency situation.
          DHS OPA coordinates planning and operational actions with State
            and local authorities, which includes training and briefing to
            State public affairs staffs, exercise activity, and real-world
            incident management. DHS OPA also conducts interagency table
            top exercises to evaluate and improve upon Federal and
            department incident response capabilities. In order to inform
            the media about what they can expect from the Federal
            Government during a terrorist incident, DHS OPA has created a
            reference manual with media guidance that is near distribution.
          DHS OPA currently maintains a staffing presence in the DHS
            Homeland Security Operations Center (HSOC) for the majority of
            the time, requiring numerous, back-to-back staff shifts.
            Ultimately, DHS OPA will be responsible for providing 24/7
            coverage in the HSOC, which is currently operational 24 hours a
            day.
          Finally, DHS OPA also coordinates directly with international
            counterparts and non-governmental organizations to ensure that
            the department's capabilities are known and to gain information
            about best practices being used around the world. Examples
            include participation in the multi-discipline National Disaster
            Risk Communications Initiative and continuous coordination with
            counterparts in Great Britain.
      --Historian.--The DHS Historian and historical staff are vital to the
            formation, preservation, and dissemination of the institutional
            memory of the Department. The DHS Historian also oversees and
            directs the recording and preservation of the history of the
            Department through the publication of a wide range of
            historical studies aimed at a diverse audience, making the
            Historian and historical publications essential to a broad-
            based public awareness of the work and history of the
            Department.
          The work of the DHS Historian and records managers in collecting
            and preserving historically important records is also a
            critical element in ensuring government transparency in general
            and, specifically, public accountability of a Cabinet
            department charged with protecting the American people and way
            of life.
          Activities include the production of a range of reference,
            policy, and historical background assessment papers; providing
            expert historical knowledge essential for informed decision
            making; maintaining the institutional history of the
            Department; providing professional assistance to the historical
            and archival activities of the directorates and bureaus within
            the Department; and producing such documentary collections as
            may be deemed necessary.
      --Web Content and Development.--The work of the DHS Web team is of
            particular importance because OPA is tasked with building a
            functioning website that is consistent across the DHS bureaus
            and useful to the American public seeking information about the
            department's missions and policies. Pew research in April 2002
            found that 68 million American adults had used government
            agency Web sites--a sharp increase from the 40 million who had
            used government sites in March 2000. An average of 1.7 million
            pages is viewed each week on the DHS website. During the most
            recent Orange alert, 2.5 million pages were viewed weekly.
      --Employee Communications.--The Employee Communications function
            ensures that key policy, procedural, and operational
            information from headquarters is disseminated and understood by
            the department's 180,000 employees. This function is critical
            to establishing a new culture for DHS employees folded in from
            22 component bureaus and agencies. Employee Communications
            researches communication needs, promotes two-way communication,
            and provides a comprehensive range of tools such as a weekly e-
            newsletter, roundtable sessions with principals, and the
            intranet website.
      --Speechwriting.--The Speechwriting staff supports the Office of
            Public Affairs' public education mission by writing public
            remarks for the Secretary, Deputy Secretary and other
            spokespeople. This includes support for DHS senior leadership
            during time of national crisis, when there is a particular need
            for timely, straightforward public information. Current
            staffing levels are consistent with those at DOS.
      --Communications/Press Office.--Due to the department's mission,
            including its international impact, DHS OPA receives an
            extremely high call volume from reporters interested in
            homeland security issues. OPA also has taken proactive steps to
            provide the public with timely information about homeland
            security issues, such as giving advice to holidays travelers,
            educating companies about their rights under the newly enacted
            Safety Act, and guiding Americans to be alert when using rail
            transportation.

                         OFFICE OF LEGISLATIVE AFFAIRS

        The Department of Homeland Security's Office of Legislative
    Affairs' (OLA) responsibilities are commensurate to the overarching
    mission of the Department, both diverse and far-reaching in scope. The
    legislative duties of the Department are comparable to other large
    Federal agencies sharing multiple committee jurisdictions and
    addressing a large volume of Congressional inquiry and activity.
        The Office of Legislative Affairs is responsible for the
    development and advancement of the Department's legislative agenda.
    This includes the establishment and maintenance of constructive
    congressional relations, the development of Departmental protocols for
    interaction with Congress and contributing to the formulation of and
    communication of the Department's strategic message.
        Specifically, OLA coordinates staffs and develops material for
    congressional hearings to include creating briefing books and editing
    written testimony. OLA assists with witness preparation of oral
    testimony, including coordinating and scheduling policy and subject-
    focused pre-briefing prior to a hearing date. They also coordinate and
    manage legislative briefings in advance of a hearing. The briefings
    provide the policy landscape, possible questions and answers,
    information on other witnesses, and other last minute insights.
    Additionally, OLA staff coordinates and tracks deliverables which
    result from hearings, including questions for the record.
        Further, OLA is responsible for all congressional mail sent to DHS.
    This involves recording and tracking correspondence, assigning due
    dates, ensuring letters are answered in a timely manner and proofing
    and editing all correspondence for the Assistant Secretary's signature.
        Currently, more than 80 House and Senate Committees claim
    jurisdiction over the Department's many important functions. These
    committees include the Select Committee on Homeland Security,
    Committees on Appropriations, and other committees addressing homeland
    security issues related to transportation and infrastructure,
    agriculture, science, energy, commerce, taxes, government affairs,
    intelligence, judicial issues, financial services and international
    relations.
        DHS OLA places the highest priority on responding to all
    Congressional oversight inquiries in a factual and timely manner. This
    broad interest in the Department and its mission produces multiple
    hearings and Congressional briefings, numerous solicitations of
    response to Congressional questions and requires adequate resources to
    be devoted to sufficiently respond to such inquiry.
        For example, in 2003, the Department of Homeland Security testified
    at 148 hearings--some including multiple witnesses from both the full
    Department, as well of each of its directorates. From January 28th
    through April 22nd of this year, the Department has produced witnesses
    for 82 hearings. Additionally, in 2003, DHS OLA was responsible for 838
    briefings of Congressional members and staff. This year, DHS OLA has
    already conducted 509.
        Congressional inquiry that specifically compares the full-time
    equivalent (FTE) and budget allotment of DHS OLA to that of other
    Federal Departments requires an examination of not only the unique
    functions of the DHS OLA but also requires a thorough inspection of the
    personnel numbers of other Legislative Affairs offices outside of DHS.
        For example, other departments with comparable missions report
    similar or greater resources devoted to Legislative Affairs. DHS OLA
    shares similar personnel numbers not only within the Legislative
    Affairs offices of other departments, but also support staff, some
    greatly exceeding that of DHS OLA.

                            NEBRASKA AVENUE COMPLEX

        Question. Legislation authorizing the transfer of the property from
    the Navy to GSA has been submitted. What is the status of the
    legislation in the various authorizing committees? What has the
    Department been doing to educate the authorizers and the leadership of
    the urgency in moving this legislation by April 30?
        Answer. The proposed legislation from the Administration
    transferring the Nebraska Avenue Complex to the General Services
    Administration for the use of the Department of Homeland Security was
    submitted to Congress for consideration by letter from General Services
    Administrator Stephen A. Perry to Speaker of the House J. Dennis
    Hastert dated February 12, 2004, and by letter to Vice President
    Cheney, as President of the Senate, dated February 18, 2004. House and
    Senate Leadership, House and Senate Authorization Committees, and House
    and Senate Appropriation Committees have been briefed on the NAC
    legislation and the necessity of passing the legislation as soon as
    possible. A freestanding bill has been reported out of the House Armed
    Services and Transportation and Infrastructure Committees. Similar
    legislation has been reported out of the Senate Armed Services
    Committee as part of the fiscal year 2005 Department of Defense
    Authorization bill. Additionally, since February, the Appropriations
    and Authorizing Committees staffs have both toured the NAC in
    preparation for the introduction of the legislation.
        Question. What would it cost to lease the equivalent amount of
    space in Washington, DC for fiscal year 2005 and for fiscal year 2005-
    2009?
        Answer. Using an average of $46.34 per square foot (assuming a 5
    year lease), the equivalent cost of leasing approximately 450,650
    square feet of floor space (approximate NAC requirement), the cost
    would be $20,883,000 in fiscal year 2005 and for the period fiscal year
    2005-2009 would be $106,523,000 (assuming an average cost inflation of
    5 percent per annum). These costs do not include the cost of parking.

                              GRANT CONSOLIDATION

        Question. What is the status of Secretary Ridge's proposal to
    consolidate TSA, FEMA, ODP and other grants in the Office of State and
    Local Government Coordination and Preparedness? Have any funds been
    officially transferred? If the proposal is still going forward, how
    many people from TSA and FEMA will be (or have been) transferred? Are
    they people associated only with grant stewardship, or are subject
    matter experts also being transferred?
        Answer. The move to create a one stop shop for grants is based upon
    input from the user or grantee community and is designed to enhance
    coordination of the multitude of preparedness and security grants
    currently administered by the Department (ODP, FEMA and TSA). The one-
    stop shop consolidation will allow DHS to gain a global perspective on
    all of the grants to ensure that redundancies are minimized, funds are
    directed to the highest best use and DHS can proactively make
    recommendations to states, localities and other recipients on mutual
    aid and dual use opportunities.
        Moving the TSA grants to SLGCP will provide DHS with concrete
    benefits. First, it will allow the substantial bulk of the TSA
    personnel who are not impacted by the consolidation to focus on their
    core mission of transportation security. Next, it creates internal (to
    DHS) and external (to recipients) improved efficiencies because only
    one DHS team (SLGCP) will interact with grant recipients rather than
    two separate teams (one at SLGCP and one at TSA) and, more importantly,
    recipients who apply for more than one type of grant (e.g. a UASI and a
    TSA grant) will only need to deal with one DHS team (SLGCP).
        Final policy responsibility for grant guidance and grant
    distribution will reside with the Office of State and Local Government
    Coordination & Preparedness. However, overall hazards and
    transportation security policy input will remain with FEMA, TSA, as
    well as the Coast Guard, and MARAD. And, to ensure the continuing
    involvement of TSA in the grant process, ODP will create a distinct
    office dedicated specifically to transportation related grants. This
    office will work closely with TSA in developing transportation security
    grant policy.

                               HIRING PRIORITIES

        Question. Recently, in the midst of budget constraints during this
    period of increased demand to protect the homeland, the Department
    announced its intention to hire a director of its Hollywood
    entertainment liaison office. This position would pay up to $136,466.
    This salary would pay the entry level salaries of 5 TSA screeners, 4
    ICE Special Agents, 4 U.S. Border Patrol Agents, 8 Coast Guard non-rate
    enlistees or 3 U.S. Secret Service Special Agents. How can the
    Department justify the creation of such a position when hiring for
    front line activities within the Department is ongoing and there are
    hiring freezes in other parts of the Department?
        Answer. Public Affairs utilized an open, funded position from one
    of its bureau offices to create the Director of Entertainment Liaison
    position. By taking an FTE from an office where reorganization had
    created efficiencies in workload, the position utilized those
    efficiencies to create a position with value added to the Department.
        The Entertainment Liaison Office is a necessary addition to the
    Office of Public Affairs. This person will work with television and
    movie producers to ensure that they do not take ``editorial license''
    with Homeland Security matters that could provide the public with false
    impressions or inaccurate information. We spend a great deal of effort
    to educate people to help them to be better prepared for any possible
    disaster--natural or manmade. Millions of Americans get information
    through the entertainment industry. This position will help to ensure
    that these people get an accurate portrayal of the department's
    mission, policies, and activities, while proactively working to help
    the American public better identify DHS functions. The Entertainment
    Liaison office will guide the direction of documentaries and law
    enforcement ``reality'' shows to provide real information about how the
    country is better prepared today.
        This is not a unique position in government. Many other Federal
    agencies already utilize a liaison with the entertainment industry. The
    CIA has a Hollywood liaison, and the Department of Defense houses a
    large staff to serve the same function.

                                CONTRACTING OUT

        Question. During the April 30, 2003, hearing, Secretary Ridge
    testified that he would provide the Subcommittee by August 2003 the
    fiscal year 2004 Management Plan of the Department. To date, that has
    not been submitted. Please submit the Plan. What are the Department's
    plans for fiscal year 2004 and fiscal year 2005 for contracting out
    work currently provided by DHS personnel?
        Answer. The Department has engaged in a 2004 Competitive Sourcing
    Plan that provides for the competition of approximately 1,500
    commercial FTE at CIS and the USCG. No decisions have yet been reached
    regarding whether to retain the work in-house or convert it to contract
    performance. Competition based decisions are expected in the August/
    September timeframes. The Department is currently working with its
    Organizational Elements to identify opportunities for additional
    competitions in the fiscal year 2005 completion timeframe and based
    upon the 2003 FAIR Act inventory of commercial and inherently
    governmental functions, but we have not yet made any final decisions
    regarding what will be competed or the form of competition (streamlined
    or standard).

             FUNDING FEDERAL AIR MARSHALS AND PORT SECURITY GRANTS

        Question. Provide for the record the response to my March 9, 2004
    letter to Secretary Ridge.
        Answer. The Secretary appreciates the question and the opportunity
    to respond. A response to the Senator's March 9, 2004 letter to the
    Secretary is forthcoming.

                     Transportation Security Administration

                   IMPLEMENTATION OF AIR CARGO STRATEGIC PLAN

        Question. Please provide an update on all steps taken to date to
    implement your 11/03 Air Cargo Strategic plan. How are you integrating
    the hiring of 100 air cargo inspectors into that plan and what is the
    status of that hiring effort?
        Answer. The Air Cargo Security Plan outlines a layered security
    strategy based on TSA's threat-based, risk managed approach to
    security. TSA is focused on numerous strategies to secure cargo
    aircraft, perimeters, facilities, and personnel. TSA plans to publish a
    Notice of Proposed Rule Making (NPRM) soon that will include
    requirements for further implementation of the Plan. But it is
    important to note that a significant number of measures called for by
    the Plan have already been implemented:
      --As of April 18th, 2004, 75 out of the 100 cargo inspectors have
            been hired and are on board. The remainder has been tendered
            offers of employment, which are currently being processed. We
            expect the remaining inspectors to be on board within the next
            two pay periods. These inspectors will be deployed throughout
            the United States and under the supervision of the local
            Federal Security Director.
      --A security directive requiring foreign all-cargo carriers to comply
            with the same cargo security procedures as domestic air
            carriers has been issued.
      --A security directive requiring passenger and all-cargo carriers to
            perform random inspections of air cargo has been issued.
      --TSA's research and development budget for fiscal year 2005 includes
            $55 million to develop new technologies for inspecting cargo
            for explosives, radiation, chemical, and biological agents, and
            other dangerous substances.
      --The Known Shipper database has been expanded by involving more
            companies and collecting more information to enhance shipper
            and supply chain security
      --To assist TSA in evaluating the latest technology available for
            identifying high-risk cargo, a Request for Information (RFI)
            was issued on April 12. The RFI will close on April 30th.
      --Explosives Trace Detection (ETD) and Explosives Detection System
            (EDS) technology have been evaluated to determine their
            viability in conducting targeted air cargo inspections. The EDS
            Pilot program is progressing towards an operational phase. TSA
            has selected three vendors to test their machines against eight
            commodities. There are five airports selected to participate in
            the pilot; MIA, DFW, ORD, ATL, LAX. The first screening is
            scheduled to begin at the end of May and finish at the end of
            June.

                  AIR CARGO SCREENING: LEVERAGING DOD RESEARCH

        Question. In his January 26, 2004 testimony before the National
    Commission on Terrorist Attacks Upon the United States, Principal
    Deputy Assistant Secretary of Defense for Homeland Defense, Peter F.
    Verga, spoke to three Advanced Concept Technology Demonstration (ACTD)
    efforts currently underway at DOD. One of them, the Air Transportable
    cargo screening ACTD, is designed to detect explosive threats in pallet
    cargo loads moving through the military transportation system. Is your
    agency aware of this effort and is its use under consideration for one
    of the pilot air cargo demonstration projects called for and funded in
    the fiscal year 2004 Homeland Security Appropriations Act? If not, why
    not? If so, please describe the testing being conducted--including the
    location, timeframe, and level of funding.
        Answer. Both agencies benefit from research and development
    projects designed to provide technologies for screening cargo to be
    carried on board an aircraft. TSA has been in contact with the
    Department of Defense (DOD) regarding the Advanced Concept Technology
    Demonstration (ACTD), and will be working with DOD personnel to ensure
    that efforts undertaken by either TSA or DOD are complementary.

                             WAIT TIMES AT AIRPORTS

        Question. Last summer, my staff requested information regarding the
    wait times for airline passengers nationwide and at the JFK, LAX, MIA,
    ATL, Charleston, WV, and Jackson, MS airports on a month-by-month basis
    for fiscal year 2003 and 2004. They are still waiting for this
    information. The wait times should be presented graphically with data
    on the level of airport screeners at each of the requested locations.
    Please provide the information.
        Answer. TSA's plan for wait time data collection rotates the
    responsibility of collecting passenger security checkpoint wait time
    data among different airports throughout the year. Each month,
    approximately 26 airports are instructed to conduct a wait time study
    of two consecutive weeks. These airports are selected according to
    their geographical and size categories in order to allow TSA to
    extrapolate across the full range of airport diversity. All Category X
    and I airports--as well as select Category II, III and IV airports--
    will be chosen to collect data at least three times each over the
    course of the year. The monthly airport selections are balanced in
    order to provide consistent data for headquarters analysis. In March,
    the average wait time for this sample of airports was 3.1 minutes with
    an average of 10.4 minutes at peak time. Please see attachment for
    airport specific information.

        The average peak wait times are the wait times encountered by
    passengers during the airport's high passenger volume periods. This is
    an average of all the checkpoint's peak times at each of the selected
    airports over the given month.

                   DISCRIMINATION COMPLAINTS BY TSA SCREENERS

        Question. Transportation Security Administration (TSA) employees
    have filed numerous discrimination complaints. Employees have filed
    complaints for a litany of reasons from poor agency management to
    failing to address the security problems at airports nationwide. As of
    January 2004 the agency faced a backlog of approximately 1,800
    discrimination complaints. How has TSA addressed this problem and what
    plans are being considered to alleviate the backlog of discrimination
    complaints?
        Answer. In January 2004, the Office of Civil Rights (OCR)
    implemented a ``Backlog Elimination Strategy.'' With this strategy, the
    OCR sought to both eliminate the backlog of discrimination complaints,
    develop a system that would promote rapid processing and resolution of
    current complaints, and perhaps, most important, improve service to our
    customers. During fiscal year 2003, OCR received in excess of 1,800
    informal complaints of discrimination. In January 2004, the OCR had a
    backlog of 476 informal complaints that required action. As of April 8,
    2004, OCR had a backlog of 8 informal complaints requiring action.
        We have trained all of our EEO counselors and many OCR staff
    members in alternative dispute resolution techniques and have provided
    our EEO counselors with additional counselor training. We are proud to
    say that OCR's strategy of addressing EEO complaints is not reliant on
    the ``pushing of paper.'' We are providing training to TSA managers
    that focuses on management practices that promote equal employment
    opportunity and are working closely with various TSA offices to
    identify and address potential civil rights issues.

                              AIR MARSHAL TRAINING

        Question. In December 12, 2003 written testimony to Senator
    Hollings, the General Accounting Office stated that funding cuts and
    delays would push back into mid-2004 advanced air marshal training--
    scheduled for completion in January 2004 for those air marshals hired
    between October 2001 and July 2002. What is the current status of
    advanced air marshal training? Have all air marshals hired through the
    end of fiscal year 2003 received the required advanced training?
        Answer. Phase II Training, the equivalent of advanced training for
    Federal Air Marshals, continues at the Federal Air Marshal Training
    Center in Atlantic City, NJ. Presently, the last class is scheduled to
    begin on May 31, 2004. At the end of that class, approximately 136
    Federal Air Marshals will not have attended Phase II for the following
    reasons: debilitative medical conditions (61) active military duty
    (39); and administrative positions (36). The 36 Administrative
    Positions represent 36 Federal Air Marshals (FAMs), who have background
    investigation issues and/or disciplinary action pending. When those
    matters have been adjudicated, the FAMs will attend Phase II Training.
    These numbers may be reduced as personnel in those categories become
    available to attend Phase II Training, since training positions remain
    available to include the above.

                 CANINE TEAMS--DIVERSION FROM CURRENT MISSIONS

        Question. The Secretary has proposed to increase rail security by
    diverting K-9 teams to rail stations. Yet, there is no new money for
    this purpose. Where are the K-9 teams being diverted from and what
    impact is the diversion having on those missions?
        Answer. DHS has announced that it will create Rapid Response Teams
    to augment local dog teams through the Federal Protective Service
    (FPS). FPS, working with TSA, will determine how best to mobilize
    existing dog teams across the Federal Government during heightened
    alerts. We have no intention of taking K-9 teams away from screening
    air cargo and protecting other Federal infrastructure. TSA is
    developing a program to partner with local authorities to provide
    explosives detection training for current and future dog teams.

                              REGISTERED TRAVELER

        Question. What are the costs in fiscal year 2004 and fiscal year
    2005 to implement the registered traveler program, how much of that
    cost will be covered by fees on the registered travelers, and what will
    be the expected increase in wait times for non-registered travelers if
    the registered traveler program is implemented with no increase in the
    screener workforce?
        Answer. TSA intends to conduct Registered Traveler (RT) Pilots at a
    limited number of airports beginning in June 2004. The pilot programs
    will assess improvements in security and enhancements in customer
    service for passengers. The pilots will last approximately 90 days.
    Results of these pilots will be analyzed to determine the program's
    effect on security and service.
        During the RT Pilots, TSA will test technology, including biometric
    tools, to enhance identity verification at the passenger security
    checkpoint, in conjunction with business processes, including potential
    reconfiguration of select checkpoint lines and lanes. TSA will be
    testing a range of technology and operational variables. The RT Pilots
    will monitor and assess possibilities for a secure and expedited travel
    experience for those who volunteer for the program. The number of
    participants in the RT Pilots will be capped at 10,000, spread across a
    small number of airport locations. It is anticipated that this small RT
    Pilot test will not have a detrimental effect on either those who do
    not volunteer or on the screener workforce. Upon conclusion of the
    pilots, determination will be made regarding best practices and
    necessary enhancements required for larger implementation of the
    program.
        The cost of the RT Pilots will be funded through $5 million
    appropriated for the Registered Traveler program in the Homeland
    Security Appropriations Act, 2004 (Public Law 108-90). Contrary to
    media reports, TSA is not planning to charge a fee to passengers who
    participate in the 90-day RT Pilots.
        TSA will await the results and analyses of the Pilots prior to
    making any decisions regarding the implementation of a Registered
    Traveler program in fiscal year 2005, including any costs that may be
    incurred by passengers who wish to participate in the voluntary
    program. The fiscal year 2005 request includes $15 million to pay for
    additional start-up costs, such as IT infrastructure and staffing
    associated with an RT program. TSA anticipates that future operational
    program costs for the Registered Traveler Program would be covered by
    fees incurred by participants. Thus, the Registered Traveler Program
    would become self-funded.
        Until the pilot has been conducted and the results fully evaluated,
    staffing requirements and their implications cannot be fully
    understood. However, TSA remains committed to its customer service
    objectives and minimizing the wait time for the traveling public.

                      Emergency Preparedness and Response

                               PROJECT BIOSHIELD

        Question. How can the Department justify spending between $1
    billion and $1.5 billion on experimental anthrax experimental vaccines
    not approved by FDA and unlikely to be approved for many years, when
    these vaccines have been developed by companies who have never had a
    commercially manufactured vaccine approved by FDA?
        Answer. Anthrax tops virtually every biowarfare threat analysis,
    because of its high fatality rate (as demonstrated by the October 2001
    attacks, where 45 percent of those with inhalation anthrax died),
    persistence in the environment, ease of production, and ease of
    aerosolization. Although antibiotic treatments are available, the use
    of an anthrax vaccine would provide pre-exposure protection for first
    responders and remediation workers. In a post-attack scenario, a
    vaccine would shorten the course and increase the effectiveness of
    treatment antibiotics when given to large exposed populations, and
    facilitate re-entry into contaminated space. It would also provide
    protection if a terrorist deployed antibiotic-resistant anthrax. Other
    important anthrax treatment modalities such as anthrax antitoxins,
    which can potentially save the lives of those already ill, are under
    advanced development and may become available for BioShield
    procurements in the future.
        The current licensed anthrax vaccine, Anthrax Vaccine Adsorbed
    (AVA), has many disadvantages for civilian use, including a primary
    requirement of 6 doses over 18 months with annual boosters and a
    limited production capacity (the only producer has a maximum production
    of 6.6 million doses per year). However, it is currently available,
    effective, and safe; and newer, 3-dose schedules are being evaluated.
    Through an interagency agreement between the Department of Defense
    (DOD) and DHS, the manufacturer could provide 5 million doses to the
    stockpile by 2006.
        Project BioShield provides for the acquisition of licensable
    products with the term ``licensable'' defined as within 8 years. This
    provision allows the Department to consider competitive bids proposed
    by companies that have a validated current Good Manufacturing Practices
    production process capable of scaled commercial production, as well as
    products that have been tested in appropriate animal models for
    efficacy and in human clinical trials for safety. New recombinant
    Protective Antigen (rPA) anthrax vaccines made using genetic
    recombinant biotechnology are being developed as next-generation
    anthrax vaccines. In preliminary studies, rPA vaccines protected
    animals against lethal anthrax aerosol challenge. Two manufacturers--
    one of them in the United States--are developing rPA vaccine under
    contract with the National Institutes of Health (NIH). Human trials to
    evaluate safety began in the summer of 2003. NIH contracts for advanced
    development, process development, and further clinical testing were
    awarded in September 2003. A 3-dose schedule has been suggested as
    likely, although studies could result in a 1-2 dose schedule in certain
    situations. Cost is estimated at $10 per dose. Initial rPA delivery to
    the Strategic National Stockpile is expected in 2004 as an
    investigational product.
        Two manufacturers have nearly completed phase I clinical trials,
    and further clinical and animal testing plans appear reasonable to NIH
    and Food and Drug Administration reviewers. Recent progress reports to
    NIH indicate steady progress by both manufacturers with no major
    obstacles envisioned. NIH will continue to support and monitor the
    current development of the product through phase II clinical trials.
        HHS will request monthly progress reports from the manufacturers
    and will host interagency risk management meetings to review the
    reports and to intervene when necessary. Also, a significant percentage
    of the contract payment will not be available until after licensure,
    both for pre-exposure and post-exposure use.
        After consideration of the anthrax threat, public health need,
    advanced development progress, manufacturing capability, and cost, the
    Policy Coordination Committee of the Homeland Security Council
    recommended, and the Deputies Committee approved, procurement of
    additional anthrax vaccine.
        Question. Why doesn't DHHS adopt a near-term to long-term policy
    for stockpiling of anthrax vaccine with product available now for the
    next 5 years and with next generation vaccines thereafter? Isn't a
    mixed approach being used for the procurement of other vaccines?
        Answer. DHS and HHS are working closely to develop both a near-term
    and a long-term strategy for stockpiling existing prophylactics and/or
    pharmaceuticals to protect against or to treat exposures to anthrax
    while continuing to seek and encourage the development of next-
    generation anthrax vaccines. Currently, the Strategic National
    Stockpile (Stockpile) contains a sizable inventory of antivirals for
    treatment of anthrax exposure, and due to their current availability,
    the Stockpile is markedly increasing its caches of such
    countermeasures--enough to treat 12 million people with an increase to
    30 million by the end of this year. Additionally, DHS, through an
    interagency agreement with DOD, is purchasing the only FDA-licensed
    anthrax vaccine, AVA, in fiscal year 2004, fiscal year 2005, and fiscal
    year 2006--for a total of 5 million doses to be added to the Stockpile.
    As a result, the Stockpile will contain ample amounts of prophylaxis
    for anthrax exposure, and will serve as a bridge until the next-
    generation anthrax vaccine, rPA, is accepted into the Stockpile.
        Question. Please provide an expenditure plan by quarter for fiscal
    year 2004 and fiscal year 2005 for Project Bioshield that identifies
    specific procurements for which decisions or solicitations have been
    made to date and general purposes or goals for remaining obligations.
        Answer. Over the past 10 months, the Weapons of Mass Destruction
    (WMD) Medical Countermeasures subcommittee has developed
    countermeasures information of interest to administration policymakers
    who will make the BioShield procurement decisions. The WMD subcommittee
    commissioned an end-to-end analysis of medical countermeasures to
    Category ``A'' biological agents (anthrax, smallpox, plague, botulinum
    toxin, tularemia, Ebola, and other hemorrhagic fever viruses). Working
    groups developed initial requirements for four high-priority bioweapon
    countermeasures for which there is high need and a reasonable
    expectation that products will be available in the near-term:
      --Next-generation anthrax vaccine (rPA)
      --Anthrax immune therapy
      --Next-generation smallpox vaccine (modified vaccinia, MVA or LC16m8)
      --Botulinum antitoxin

                                   STOCKPILE

        Question. Please provide an expenditure plan by quarter for fiscal
    year 2004 and fiscal year 2005 for Strategic National Stockpile that
    identifies specific procurements for which decisions or solicitations
    have been made to date and general purposes or goals for remaining
    obligations.
        Answer. The fiscal year 2004 Strategic National Stockpile spending
    plan has already been provided to the Appropriations Committee on May
    11, 2004, during a Strategic National Stockplie (SNS) briefing. A
    fiscal year 2005 spending plan is being formulated by the Centers for
    Disease Control and Prevention, but it has yet to be provided to DHS.

         REGIONAL OFFICE AND IMPACT ON EXISTING FEMA REGIONAL STRUCTURE

        Question. Please provide an update on the Department's plans to
    establish a regional structure. What impact will this new structure
    have on FEMA'S 10 regional offices and their longstanding and
    successful linkages with State and local emergency managers?
        Answer. An effective Department of Homeland Security (DHS) field
    operational management concept is essential to ensure that the
    Department fulfills its mission in leading the national unified effort
    to protect America. Of the 22 agencies that now comprise the
    Department, 7 have regional structures. DHS is conducting a baseline
    analysis regarding a regional concept of operations that would ensure
    effective management of field operations both on a day-to-day basis and
    during incidents
        One of the core missions of DHS regional offices would be to
    collaborate with Federal, state, local, tribal and private sector
    stakeholders within the region to coordinate homeland security
    activities. To ensure that the DHS regional offices are able to perform
    this coordination function, FEMA regional offices will continue to
    partner with State and local governments to help ensure that
    communities throughout the Nation can prepare for, respond to and
    recover from incidents and disasters.
        Question. How will those relationships be protected under a new
    regional structure?
        Answer. Over the years, FEMA regional offices have developed such
    productive working relationships with their State and local partners
    that it is often touted as the hallmark of intergovernmental
    coordination and collaboration between a Federal agency and its
    constituent stakeholders. In recognition of these valuable
    partnerships, the Department is working to design a regional construct
    that will capitalize upon these excellent relationships to enable the
    more effective and efficient delivery of DHS services to external
    stakeholders.

                                DISASTER RELIEF

        Question. Please provide the Subcommittee with an update on
    disaster relief funds.
        Answer. As of April 28, 2004, $1.487 billion remains unobligated in
    the Disaster Relief Fund If obligations occur at the 5-year average of
    $249 million per month for the remaining 5 months of the fiscal year
    and FEMA realizes another $200 million in recoveries of prior year
    obligations (actual recoveries through March 31 equal $194 million),
    FEMA will end the year with an unobligated balance of $442 million,
    which is close to the estimate of $453 million in the fiscal year 2005
    President's budget. In summary (in thousands of dollars):

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Unobligated Balance, 4/28...............................      $1,487,265
    Estimated recoveries....................................         200,000
    Obligations May 1-Sept. 30 (5  $249 million)...      -1,245,000
                                                             ---------------
    Estimated unobligated balance 9/30/04...................         442,265
    ------------------------------------------------------------------------

        Of course, any large hurricane or other disaster events during the
    remainder of the fiscal year could significantly impact these
    estimates.

                          United States Secret Service

                              CAMPAIGN LABOR COSTS

        Question. The fiscal year 2004 budget includes $64 million in costs
    associated with the 2004 campaign protection program. This budget was
    based on a historical average of 603 ``protection days'' covering
    multiple candidates. How many candidates have received protection
    during the 2004 campaign? Provide the date protection started for each
    candidate. Does the Secret Service still anticipate that 603 protection
    days will be required for the presidential campaign? What savings does
    the Secret Service anticipate from the campaign program, if any?
        Answer. As you note, the Secret Service's campaign protection
    estimate is based on the historical average of the number of protection
    days provided for the last four elections. The Administration believes
    this is the most appropriate method for developing estimated campaign
    protection costs, since it does not presuppose a set number of
    candidates or particular days on which protection will begin or end.
        To date, the Service has provided protection for two candidates and
    one spouse. Following the Democratic Convention, the Service will
    provide protection to the Vice-Presidential nominee and the Vice-
    Presidential nominee's spouse. Baring protection being provided to a
    third party, an independent candidate or, on the Republican ticket,
    someone other than the sitting President or Vice President, 421 days of
    protection will be provided.
        Of the $64 million budgeted for the campaign program, $40.0 million
    is for direct costs related to protection, and $24 million is for labor
    costs relative to personnel that are being reallocated from the
    Service's investigative activity to the campaign in order to staff the
    protective effort. These reallocated labor costs are covered by the
    Service's base budget. To the extent these personnel are not required
    for campaign-related work; they will continue their investigative
    activities.
        Because of lower than originally projected campaign activity, the
    direct costs are now estimated to total only $33 million. The
    Department and the Secret Service will work with Congress to find
    appropriate uses for any excess campaign protection funding.

    ------------------------------------------------------------------------
                                           Projected dates of     Protection
             Candidate/Nominee                 Protection            Days
    ------------------------------------------------------------------------
    John Kerry.........................  February 20, 2004             224
                                          through September 30,
                                          2004.
    Mrs. Kerry \2\.....................  April 13, 2004 through         85.5
                                          September 30, 2004.
    John Edwards.......................  February 22, 2004              11
                                          through March 3, 2004.
    Dem. VP Nominee \1\................  July 26, 2004 through          67
                                          September 30, 2004.
    Dem. VP Spouse \1\ \2\.............  July 26, 2004 through          33.5
                                          September 30, 2004.
                                                                ------------
          Total Projected Campaign Days  ......................       421
    ------------------------------------------------------------------------
    \1\ Estimated VP Nominee and Spouse start dates.
    \2\ Protection for spouses are projected as \1/2\ day of protection.

                  ``FORCE MULTIPLIER'' TO FEDERAL AIR MARSHALS

        Question. On February 24, 2004, the Immigration and Customs
    Enforcement and the Secret Service announced a new agreement to provide
    force multiplier to Federal air marshal service. According to the
    Department, this initiative would enable the ICE FAMS the flexibility
    to deploy their Federal Marshals to a wider range of flights. Other
    than providing the ICE FAMS with travel information for armed personnel
    traveling on U.S. commercial flights during their normal course of
    business, what specific responsibilities will Secret Service agents
    have on these flights that they didn't have before February 24, 2004?
    In many cases, Secret Service agents travel from one city to another
    following several hours of protection responsibilities. Does this mean
    that U.S. Secret Service agents will then be asked to substitute as
    Federal air marshals when traveling on official business?
        Answer. The objective of the Force Multiplier Program (FMP) is to
    capitalize on the presence of literally thousands of armed Federal law
    enforcement officers (LEOs) that routinely travel throughout the
    country on commercial carriers in support of the missions of their
    respective agencies. Essentially, the FMP is a system that would allow
    the Federal Air Marshal Service (FAMS) to track and coordinate LEO
    flight activity to optimize the use of Federal Air Marshals and
    otherwise enhance the level of LEO coverage provided to the Nation's
    civil aviation system.
        While USSS Special Agents are participating in the Force Multiplier
    Program, they will not be acting as ``de facto FAMs'' and are not a
    substitute for Federal Air Marshals (FAMs). While they receive a
    briefing, they are neither fully trained nor tactically positioned on
    the aircraft to serve as FAMs. The USSS Special Agents will have no
    additional responsibilities while aboard U.S. commercial flights during
    the course of their official travel. It will, however, heighten their
    awareness within the aviation domain and allow the FAMS to monitor the
    presence of armed LEOs on flights. In the event of an in-flight crisis,
    the USSS Special Agents would react accordingly to the threat as
    prescribed by applicable statutes and their agency policy.

      Immigration and Customs Enforcement and Citizenship and Immigration
                                    Services

       IMMIGRATION-RELATED CASEWORK--ASSISTANCE TO CONGRESSIONAL OFFICES

        Question. I am troubled by the reports I am receiving from members
    of my staff about the difficulties that they are having in obtaining
    help from your agency for my constituents. Under the current
    reorganization regime, my staff is finding that their efforts to get
    answers to even some of the most basic questions about visas and
    immigration processes are meeting with resistance from agency staff.
    Contacts, both e-mails and follow-up phone calls, from my office to
    district office staff in your agency are not receiving timely
    responses. It sometimes takes days to get even an acknowledgment of an
    inquiry. In many cases, contract personnel, particularly at the service
    centers, are less acquainted with the intricacies of immigration law
    than are members of my own Senate staff. On many occasions my staff has
    made inquiries only to receive responses that are strictly scripted.
    Even more disturbing, calls from my Senate office are not even being
    answered at headquarters. I would like to know what efforts are being
    made to monitor service to the public and to ensure that Congressional
    inquiries are handled promptly?
        Answer. The Director, U.S. Citizenship and Immigration Services
    (USCIS) is also troubled if you and your staff are not receiving timely
    and appropriate responses to your inquires from USCIS personnel and
    appreciate your bringing it to his attention. You should know that the
    Standard Operating Procedures for all congressional units, both here at
    USCIS headquarters and in the field, specifically state that all phone
    calls from congressional offices must be returned within 24 hours, e-
    mails within 10 days, and written correspondence or faxes within 30
    days. If this is not being done, then the Director would be happy to
    look into any specific instances or cases you could provide to me.
    However, it is important to note that some case resolution (which
    should be considered distinct from the return of a phone call or the
    answer to a letter), because of its complexity, may take considerably
    longer.
        The Director appreciates you bringing this to his attention and
    wants to assure you that customer service is one of the top three
    priorities of USCIS. We will continue to commit ourselves to building
    and maintaining an immigration services system that provides
    information and benefits in a timely, accurate, consistent, courteous
    and professional manner and ensure that those values are exhibited in
    our congressional units.
        It appears that the above question regarding responsiveness
    primarily relates to immigration services issues under the purview of
    U.S. Citizenship and Immigration Services (USCIS). However, the
    Assistant Secretary, Immigration and Customs Enforcement (ICE) wants to
    ensure you that ICE is fully committed to providing timely and
    informative responses to all congressional inquiries. The ICE office of
    Congressional Relations can be reached at (202) 514-5232 to assist in
    immigration casework relating to detention and removal, humanitarian
    parole and other matters under ICE's jurisdiction. For your
    information, USCIS Office of Congressional Relations can be reached at
    (202) 514-5231.

                        Office for Domestic Preparedness

                      METROPOLITAN MEDICAL RESPONSE SYSTEM

        Question. Provide a detailed description of how fiscal year 2002,
    fiscal year 2003, and fiscal year 2004 funds appropriated for the
    Metropolitan Medical Response System have been spent. Has the
    Department fully met the requirements of cities, as laid out in the
    MMRS contracts? If not, how much work, and in which cities, remains to
    be done? How much of the fiscal year 2004 appropriation is obligated?
    What are the plans for remaining funds? If the Department does not plan
    to obligate all appropriated fiscal year 2004 funds for MMRS, please
    provide a rationale; the proposal for how remaining funds will be
    spent; and indicate whether you will submit a reprogramming or transfer
    proposal to the Committee.
        Answer. In fiscal year 2002, the Metropolitan Medical Response
    System (MMRS) program was located in the Department of Health and Human
    Services' (HHS') Office of the Assistant Secretary for Public Health
    Emergency Preparedness (OAS PHEP). The funds were used to initially
    establish an MMRS in 25 new jurisdictions at a cost of $400,000 each,
    for a total of $10 million (this was less than the historical cost of
    $600,000 for an MMRS contract), and to fund special projects in MMRS
    jurisdictions.
        In fiscal year 2003, $49.1 million of the $50.1 million
    appropriation was allocated to MMRS within the HHS OAS PHEP, and is
    broken out as follows:
      --$200,000 was provided to each of the 25 fiscal year 2002
            jurisdictions to ``make them whole'' for baseline capability
            development, for a total of $5 million
      --Funds for fiscal year 2003 Program Support Contracts, providing
            $280,000 for capability sustainment and optional operational
            area expansion, were obligated for each of the 122 MMRS
            jurisdictions, for a total of $34.16 million
      --A total of $2.4 million was used to establish 3 new MMRS
            jurisdictions and to upgrade Atlanta to MMRS status ($600,000
            for each)
      --$3 million was provided to the National Emergency Training Center
            (NETC) for MMRS training course development and for Noble
            Training Center facility upgrades
      --$1.5M was spent on the final phase of a special project to obtain a
            mobile field hospital for the Charlotte-Mecklenburg, North
            Carolina, MMRS
      --The remainder was used for technical support contract fees,
            official travel, printing, and other overhead expenses
        In fiscal year 2004:
      --$3 million was transferred to the NETC for 1 MMRS course
            development and 2 facility upgrades at the Noble Training
            Center
      --$500,000 has been used for staff travel and administrative expenses
        As of May 5, 2004, 65 of the 124 MMRS jurisdictions have completed
    their baseline capability development. Of these 65 jurisdictions, 24
    have begun work under the fiscal year 2003 Program Support contracts.
    None of the jurisdictions has yet completed its fiscal year 2003
    Program Support contract. Of the remaining 59 jurisdictions:
      --25 jurisdictions have nearly completed their baseline capability
            development (only 1 or 2 deliverables remaining)
      --13 jurisdictions are on track (have 3 or more deliverables
            remaining and are on schedule to complete them)
      --21 jurisdictions are delayed
        As an incentive for completing baseline capability development,
    activation of the fiscal year 2003 Program Support Contract (up to
    $280,000) is conditional upon completion and approval of all
    deliverables required in the initial MMRS contract, and its
    modifications. The table below provides the information by
    jurisdiction.

    ------------------------------------------------------------------------
                                                               Submitted
                                                          Technical and Cost
                                       2003 Sustainments   Proposals for the
     Baseline Deliverables Completed        Started        Fiscal Year 2003
                                                            Program Support
                                                               Contracts
    ------------------------------------------------------------------------
    Akron, OH.......................  Anaheim, CA.......  Akron, OH
    Albuquerque, NM.................  Aurora, CO........  Albuquerque, NM
    Anaheim, CA.....................  Bakersfield, CA...  Amarillo, TX
    Anchorage, AK...................  Birmingham, AL....  Anaheim, CA
    Arlington, TX...................  Columbus, GA......  Anchorage, AK
    Aurora, CO......................  Columbus, OH......  Arlington County,
                                                           VA
    Austin, TX......................  Denver, TX........  Arlington, TX
    Bakersfield, CA.................  Fremont, CA.......  Austin, TX
    Baltimore, MD...................  Fresno, CA........  Baton Rouge, LA
    Baton Rouge, LA.................  Honolulu, HI......  Shreveport, LA
    Birmingham, AL..................  Indianapolis, IN..  Chattanooga, TN
    Boston, MA......................  Jacksonville, FL..  Cincinnati, OH
    Chesapeake, VA..................  Las Vegas, NV.....  Dallas, TX
    Chicago, IL.....................  Mesa, AZ..........  Dayton, OH
    Cleveland, OH...................  Milwaukee, WI.....  El Paso, TX
    Columbus, GA....................  Minneapolis/St.     Fort Wayne, IN
                                       Paul, MN.
    Columbus, OH....................  Nashville, TN.....  Fremont, CA
    Dallas, TX......................  Omaha, NE.........  Fresno, CA
    Denver, CO......................  Phoenix, AZ.......  Ft. Worth, TX
    Detroit, IL.....................  Riverside, CA.....  Garland, TX
    El Paso, TX.....................  Salt Lake City, UT  Glendale, CA
    Ft. Wayne, IN...................  San Antonio, TX...  Glendale, AZ
    Fort Worth, TX..................  San Diego, CA.....  Greensboro, NC
    Fremont, CA.....................  St. Louis, MO.....  Hampton Roads
                                                           District Planning
                                                           Commission
    Fresno, CA......................  ..................  Hialeah, FL
    Glendale, AZ....................  ..................  Honolulu, HI
    Honolulu, HI....................  ..................  Houston, TX
    Houston, TX.....................  ..................  Huntington Beach,
                                                           CA
    Huntington Beach, CA............  ..................  Irving, TX
    Huntsville, AL..................  ..................  Southeast Alaska
                                                           Region
    Indianapolis, IN................  ..................  Los Angeles, CA
    Jacksonville, FL................  ..................  Las Vegas, NV
    Kansas City, MO.................  ..................  Lexington, KY
    Las Vegas, NV...................  ..................  Lincoln, NE
    Long Beach, CA..................  ..................  Little Rock, AR
    Los Angeles, CA.................  ..................  Lubbock, TX
    Memphis, TN.....................  ..................  McAllen, TX (Rio
                                                           Grande)
    Mesa, AZ........................  ..................  Mesa, AZ
    Miami, FL.......................  ..................  Mobile, AL
    Milwaukee, WI...................  ..................  New Orleans, LA
    Minneapolis, MN.................  ..................  NY City Mayor's
                                                           Office
    Mobile, AL......................  ..................  Oakland, CA
    Nashville, TN...................  ..................  Oklahoma City, OK
    Newport News, VA................  ..................  Omaha, NE
    New York, NY....................  ..................  Phoenix, AZ
    Oklahoma City, OK...............  ..................  Portland, OR
    Omaha, NE.......................  ..................  Richmond, VA
    Philadelphia, PA................  ..................  Riverside, CA
    Phoenix, AZ.....................  ..................  San Antonio, TX
    Portland, OR....................  ..................  San Bernardino, CA
    Riverside, CA...................  ..................  San Diego, CA
    Salt Lake City, UT..............  ..................  San Jose, CA
    San Antonio, TX.................  ..................  Santa Ana, CA
    San Diego, CA...................  ..................  Seattle, WA
    San Francisco, CA...............  ..................  Spokane, WA
    San Jose, CA....................  ..................  St. Louis, MO
    Seattle, WA.....................  ..................  St. Petersburg, FL
    Shreveport, LA..................  ..................  Stanislaus County,
                                                           CA
    St. Louis, MO...................  ..................  Stockton, CA
    St. Paul, MN....................  ..................  Tacoma, WA
    St. Petersburg, FL..............  ..................  Tampa, FL
    Syracuse, NY....................  ..................  Toledo, OH
    Tampa, FL.......................  ..................  Tucson, AZ
    Tulsa, OK.......................  ..................  Tulsa, OK
    Wichita, KS.....................  ..................  Wake County, NC
                                                          Wichita, KS
    ------------------------------------------------------------------------

        As of April 30, 2004, $3.5 million of the $50 million appropriation
    has been obligated. The funds that Congress has appropriated for MMRS
    over the last several years have been used to establish certain
    capabilities, to get the program up to its baseline, and to facilitate
    transfer of the program to the localities for continuation, once the
    baseline is established. We will reach the baseline this fiscal year
    (2004), and therefore no additional funding is being requested. As
    such, the Department has submitted to the House and Senate
    Appropriations Subcommittees a notification, dated April 27, 2004, of
    its intent to reprogram $40 million of the $50 million MMRS
    appropriation. Should this reprogramming be approved, the remaining
    funds, approximately $6 million, would be used to develop a plan to
    terminate the program as currently structured and to seek the
    continuance, in some form, of its key components in the eventual ``one-
    stop shop'' grants operation to be administered by the DHS Office of
    State and Local Government Coordination and Preparedness. Under this
    arrangement, FEMA would have no further role in the MMRS program for
    fiscal year 2004, and there will be no Federal program in fiscal year
    2005.
        There are other Federal programs that provide more narrowly
    focused, but related, support. These include the Centers for Disease
    Control and Prevention-Health Resources and Services Administration
    (HRSA) Bioterrorism Preparedness Grants and the HRSA Hospital Grants;
    the Office for Domestic Preparedness (ODP) Training and Exercise
    Programs and Equipment Grants; and ODP Urban Area Security Initiative
    funding to the designated States, which will then work with counties
    and cities to form regions that will work together through mutual aid
    agreements, interoperable communications, statewide intelligence
    centers, and community and citizen participation.

                                  OBLIGATIONS

        Question. How does ODP verify that States have obligated funds to
    cities, as required in the State formula and UASI grants? What are the
    mechanisms for States to notify ODP, and for ODP to verify that
    obligation was made? What does ``obligate'' mean in this program? What
    steps must a city take to be able to get funds from the State for a
    particular expenditure?
        Answer. For the fiscal year 2003 State Homeland Security Grant
    Program (SHSGP), Part I and II and Urban Areas Security Initiative
    (UASI) Part I and II grants, ODP's grant guidance notes that states
    were expected to obligate 80 percent of equipment funding for SHSGP I,
    80 percent of first responder preparedness funding in SHSGP II, 50
    percent of CIP funding in SHSGP II, and 80 percent of all funding for
    the UASI II program to units of local government within 45 days. To
    that end, ODP set up a follow-up system whereby ODP would notify the
    State 10 days out from the 45th day (via a letter) that ODP expects
    states to certify that they had obligated these funds. The
    certification was done via a ``fax back'' form to their ODP
    preparedness officer. On the 46th day after the grant award, we sent
    out a letter reminding them of the obligation requirement, with an
    accompanying fax back form that required them to certify that they had
    met this obligation requirement, and to further explain (through a
    narrative) how the funds were being used.
        We received a majority of the fax backs within the allotted time,
    and ODP is relying on the certification of those states that they have
    met the statutory requirement. For states that did not provide the
    information, or noted that they did not comply, we provided a number of
    options. ODP offered technical assistance to help them comply with
    certification. In other cases, states notified us of a date they would
    be in compliance (in some states, legislatures and other elected bodies
    need to meet so that can hold up Federal funding obligation). The last
    resort for states who did not comply was the notification that ODP
    intended to put a hold on the state portion of their funding until they
    came into compliance.
        In fiscal year 2004, the Homeland Security Grant Program and the
    Urban Area Security Initiative grantees will certify their obligations
    through the Initial Strategy Implementation Plan (ISIP), which is due
    60 days after grant award. The grantees will submit this form to ODP,
    and failure to submit the form will cause funding to be
    administratively held, as noted in the special condition in the grant.
        Obligation for ODP purposes means: (1) a definite commitment which
    creates a legal liability for the payment of funds for goods and
    services ordered or received, or; (2) a commitment during the grant
    period to pay under a grant, subgrant, and/or contract determinable
    sums for services or goods ordered or received during the grant period;
    (please note that this does not include operational costs associated
    with raising the threat level in the State Homeland Security Grant
    Program-Part 2; please reference the ODP Grant guidelines for specific
    details) or (3) evidence that funds are encumbered, such as a purchase
    order or requisition, to cover the cost of purchasing an authorized
    item during the grant period.
        In terms of eligible subgrantees (such as cities, counties, regions
    and other units of government) to receive funds from the state, ODP
    leaves the discretion to the State as to who will receive subgrants.
    This varies from State to State; as mentioned earlier, it can be
    cities, counties, regions, port authorities, tribes, and other local
    units of government. As well, most states make it clear to their locals
    that there may not be an expectation that everyone will receive a
    subgrant. This will be based upon risk, threat, population or other
    means. If a locality is chosen as a subgrantee, the State makes a
    subgrant award document available to them, with instructions for how to
    proceed with procurement or other items, such as training procurement
    or exercise planning. Depending on the requirements in the grant, in
    most cases subgrantees are required to submit detailed budget
    worksheets to the State in order to receive their funding. Since ODP
    operates on a reimbursement basis, the locality will have to order
    items from a vendor, and then receive the item before the monies can be
    reimbursed. States are the only unit of government authorized to make
    drawdowns against the U.S. Treasury for ODP funds.

                                    TRAINING

        Question. How does the Department plan to spend the $60 million for
    competitive training? Please provide a break down of continuing
    training costs.
        Answer. The funding breakdown of the $60 million ($59,646,000 with
    the 0.59 percent rescission) for continuation of ODP's current training
    programs, as well as the competitive training grant program is as
    follows:

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Competitive Training Grants.............................     $33,646,000
    Naval Postgraduate School...............................      14,000,000
    National Sheriff's Association..........................       3,000,000
    Dugway Proving Ground...................................       3,000,000
    IACLEA..................................................       1,500,000
    Michigan State University...............................         500,000
    Virtual Medical Campus (WVU)............................       2,000,000
    International Association of Chiefs of Police...........       2,000,000
    International Association of Firefighters...............       1,000,000
                                                             ---------------
          Total.............................................      59,646,000
    ------------------------------------------------------------------------

                                   TASK FORCE

        Question. The Secretary has established a task force responsible
    for identifying roadblocks in moving homeland security funding from
    States to cities, and for identifying solutions. Who makes up the task
    force? How many meetings have there been to date? What problems have
    been identified?
        Answer. Secretary Ridge has established a Homeland Security Funding
    Task Force composed of state, county, city, and tribal representatives
    to examine the funding process and ensure that Department of Homeland
    Security funds move quickly to local first responders. The primary goal
    of the Task Force is identify State and local funding solutions that
    work effectively--``best practices''--and can be extended to situations
    where there are impediments to efficient and effective distribution of
    State and local homeland security funds.
        The Department expects the Task Force to provide a report to the
    Secretary within the next several weeks that will identify several
    ``best practices'' for ensuring the expeditious award of funds to local
    first responders. The report will also identify barriers to the quick
    and efficient award of funds to local first responders and offer
    recommendations to address these barriers. The Task Force, led by Mitt
    Romney, Governor of Massachusetts, is composed of 20 representatives
    who have first-hand experience in homeland security issues and whose
    expertise in this area should allow for a thorough examination of the
    issue.
        As of May 2004, the Task Force has met twice, and has also convened
    two conference calls to discuss the issues surrounding the most
    efficient and effective means to ensure that homeland security funds
    are passed through to local first responders.
      state grants (including law enforcement terrorism prevention grants)
        Question. How much of the fiscal year 2002 funds have been
    obligated, and expended, by state? At a national level, describe the
    uses of the funds and how much has been spent on those uses. Please
    provide the same information for fiscal year 2003 and fiscal year 2004
    funds.
        Answer. Please see charts below for information on the fiscal year
    2002 and fiscal year 2003 State formula grant programs. At this point,
    ODP does not have information on the fiscal year 2004 program as many
    states have only recently received their awards. Overall, though, these
    awards could be used for a variety of purposes, including procurement
    of specialized equipment, exercise support, and training. In all
    instances, draw down information is provided to ODP by the States and
    reflect State and local draw down amounts. Often times, these draw down
    reports require ODP to validate the accuracy of the amounts reported.
    Given that ODP is relying on State- and local-generated information,
    this process can be time-consuming. Currently, ODP is still verifying
    correct draw down amounts from States and localities. The result of
    this is that State and local draw down amounts exceed obligated amounts
    due to State and local reporting inaccuracies. ODP's validation process
    will reconcile these numbers to reflect more accurate final draw down
    amounts.

              HIGH THREAT, HIGH DENSITY URBAN AREA SECURITY GRANTS

        Question. How much of the fiscal year 2002 funds have been
    obligated, and expended, by state? At a national level, describe the
    uses of the funds and how much has been spent on those uses. Please
    provide the same information for fiscal year 2003 and fiscal year 2004
    funds.
        Answer. Please see attached charts below. Overall, though, these
    awards could be used for a variety of purposes, including procurement
    of specialized equipment, exercise support, and training.

                                         FISCAL YEAR 2002 OBLIGATION & DRAWDOWN
    ----------------------------------------------------------------------------------------------------------------
                    STATE                        AWARD AMOUNT              OBLIGATION                DRAWDOWN
    ----------------------------------------------------------------------------------------------------------------
    ALABAMA..............................            $5,317,000.00            $5,317,000.00            $3,227,957.57
    ALASKA...............................             2,783,000.00             2,783,000.00               116,217.02
    AMERICAN SAMOA.......................               828,000.00               713,671.00               713,671.00
    ARIZONA..............................             5,770,000.00             5,770,000.00             3,275,843.00
    ARKANSAS.............................             4,141,000.00             4,141,000.00             1,812,350.69
    CALIFORNIA...........................            24,831,000.00            24,695,730.27             6,770,544.91
    COLORADO.............................             5,220,000.00             5,220,000.00             2,185,101.69
    CONNECTICUT..........................             4,626,000.00             3,132,870.26             3,132,870.26
    DELAWARE.............................             2,887,000.00             2,887,000.00             2,522,055.43
    DISTRICT OF COLUMBIA.................             2,747,000.00             2,558,690.00             2,558,690.00
    FLORIDA..............................            12,967,000.00            12,967,000.00            10,092,752.25
    GEORGIA..............................             7,797,000.00             7,797,000.00             1,322,400.00
    GUAM.................................               892,000.00               892,000.00               782,785.64
    HAWAII...............................             3,172,000.00             3,172,000.00               388,734.56
    IDAHO................................             3,226,000.00               837,369.26               837,369.26
    ILLINOIS.............................            10,604,000.00            10,135,950.00             6,421,617.60
    INDIANA..............................             6,400,000.00             4,710,688.00             4,341,379.22
    IOWA.................................             4,308,000.00             4,288,520.64             4,288,520.64
    KANSAS...............................             4,151,000.00             4,047,426.32             4,047,426.32
    KENTUCKY.............................             5,048,000.00             5,048,000.00               860,155.73
    LOUISIANA............................             5,331,000.00             5,255,906.92             2,932,832.10
    MAINE................................             3,213,000.00             2,759,787.38             2,759,787.38
    MARYLAND.............................             5,881,000.00             5,881,000.00             5,058,472.14
    MASSACHUSETTS........................             6,579,000.00             6,283,971.94             6,067,184.38
    MICHIGAN.............................             8,958,000.00             8,958,000.00             6,797,636.52
    MINNESOTA............................             5,631,000.00             5,631,000.00             4,232,332.00
    MISSISSIPPI..........................             4,255,000.00             4,255,000.00               134,618.95
    MISSOURI.............................             6,079,000.00             6,079,000.00             4,512,600.00
    MONTANA..............................             2,967,000.00             2,967,000.00             2,356,138.40
    NEBRASKA.............................             3,502,000.00             2,365,560.04             2,365,560.04
    NEVADA...............................             3,693,000.00             2,932,185.27             2,932,185.27
    NEW HAMPSHIRE........................             3,187,000.00             3,187,000.00               566,551.14
    NEW JERSEY...........................             7,948,000.00             7,948,000.00  .......................
    NEW MEXICO...........................             3,574,000.00               861,485.41               861,485.41
    NEW YORK.............................            14,953,000.00            10,860,400.00             8,000,000.00
    NORTH CAROLINA.......................             7,706,000.00             7,339,690.00             4,589,749.00
    NORTH DAKOTA.........................             2,794,000.00             2,788,952.00             1,935,923.60
    NORTHERN MARIANAS (MP)...............               835,000.00               634,948.00               631,569.00
    OHIO.................................             9,897,000.00             9,897,000.00             6,894,513.59
    OKLAHOMA.............................             4,656,000.00             4,450,000.00               474,551.16
    OREGON...............................             4,637,000.00             4,637,000.00             1,322,762.23
    PENNSYLVANIA.........................            10,512,000.00            10,512,000.00             5,524,635.76
    PUERTO RICO..........................             4,894,000.00             4,602,000.00               415,718.67
    RHODE ISLAND.........................             3,063,000.00             2,448,593.17             1,170,550.04
    SOUTH CAROLINA.......................             5,028,000.00             5,028,000.00             3,805,485.55
    SOUTH DAKOTA.........................             2,868,000.00             2,799,987.64             2,744,690.06
    TENNESSEE............................             6,140,000.00             5,854,806.53             2,847,838.44
    TEXAS................................            16,196,000.00            16,196,000.00             3,954,498.71
    UTAH.................................             3,849,000.00             3,849,000.00             2,331,617.46
    VERMONT..............................             2,772,000.00             2,772,000.00             1,883,177.41
    VIRGIN ISLANDS.......................               861,000.00               861,000.00               133,381.16
    VIRGINIA.............................             7,062,000.00             7,062,000.00             5,853,231.82
    WASHINGTON...........................             6,276,000.00             5,733,465.11             4,979,929.00
    WEST VIRGINIA........................             3,567,000.00             3,567,000.00             3,567,000.00
    WISCONSIN............................             5,925,000.00             4,842,045.00             4,137,494.44
    WYOMING..............................             2,696,000.00             2,157,207.03             2,157,207.03
                                          --------------------------------------------------------------------------
          TOTAL..........................           315,700,000.00           295,372,907.19           170,631,350.65
    ----------------------------------------------------------------------------------------------------------------

                                                FISCAL YEAR 2003 SHSGP I
    ----------------------------------------------------------------------------------------------------------------
                   Grantee                       Award Amount              Obligation           Amount Drawn Down
    ----------------------------------------------------------------------------------------------------------------
    Alabama..............................            $9,457,000.00            $9,457,000.00              $175,934.60
    Alaska...............................             4,995,000.00             4,995,000.00               184,464.63
    American Samoa \1\...................             1,482,000.00             1,482,000.00  .......................
    Arizona..............................            10,584,000.00            10,584,000.00             2,074,597.00
    Arkansas.............................             7,394,000.00             7,394,000.00             3,383,376.03
    California...........................            45,023,000.00            45,021,503.60             5,141,147.64
    Colorado.............................             9,480,000.00             9,480,000.00               771,927.24
    Connecticut \1\......................             8,265,000.00             2,688,030.55  .......................
    Delaware.............................             5,185,000.00             5,185,000.00  .......................
    District of Columbia.................             4,910,000.00             4,910,000.00  .......................
    Florida..............................            23,654,000.00            23,654,000.00             3,194,791.29
    Georgia..............................            14,188,000.00            11,344,100.00             2,749,000.00
    Guam.................................             1,596,000.00             1,596,000.00               138,141.80
    Hawaii...............................             5,693,000.00             5,693,000.00               160,895.41
    Idaho \1\............................             5,803,000.00             5,396,000.00             1,210,840.19
    Illinois.............................            18,879,000.00            17,353,243.00             6,532,800.91
    Indiana..............................            11,399,000.00            11,399,000.00             4,859,561.60
    Iowa \1\.............................             7,656,500.00             7,656,500.00               232,884.14
    Kansas...............................             7,401,000.00             6,353,209.03               264,327.00
    Kentucky.............................             9,001,000.00             8,527,000.00             2,789,560.10
    Louisiana............................             9,451,000.00             9,451,000.00               182,686.24
    Maine................................             5,751,000.00             5,751,000.00             1,589,384.57
    Maryland.............................            10,585,000.00            10,585,000.00             1,223,974.47
    Massachusetts........................            11,711,000.00  .......................                68,752.97
    Michigan.............................            15,918,000.00            15,918,000.00               899,860.42
    Minnesota............................            10,076,000.00            10,076,000.00               614,470.00
    Mississippi..........................             7,582,000.00             7,582,000.00             1,001,844.54
    Missouri.............................            10,834,000.00            10,834,000.00             3,358,900.00
    Montana..............................             5,303,000.00             5,303,000.00               367,734.49
    N. Mariana Islands...................             1,496,000.00             1,234,698.00               749,082.00
    Nebraska.............................             6,254,500.00             6,254,500.00             1,618,344.69
    Nevada...............................             6,771,000.00             6,771,600.00             1,259,918.90
    New Hampshire........................             5,727,000.00             5,727,000.00               858,982.35
    New Jersey...........................            14,222,000.00            14,222,000.00  .......................
    New Mexico...........................             6,401,000.00             6,401,000.00               133,918.45
    New York \1\.........................            26,492,000.00            14,872,000.00            19,000,000.00
    North Carolina.......................            13,908,000.00            13,908,000.00             1,228,130.00
    North Dakota.........................             4,983,000.00             4,983,000.00             1,046,030.93
    Ohio.................................            17,510,000.00            17,510,000.00             3,551,943.24
    Oklahoma.............................             8,304,000.00             6,847,000.00               414,231.39
    Oregon...............................             8,336,000.00             8,336,000.00             2,118,757.40
    Pennsylvania.........................            18,570,000.00            18,570,000.00             3,286,780.86
    Puerto Rico..........................             8,727,000.00             8,727,000.00  .......................
    Rhode Island.........................             5,489,000.00             5,489,000.00             1,899,312.04
    South Carolina.......................             9,017,000.00             9,017,000.00               485,499.18
    South Dakota.........................             5,131,000.00             5,131,000.00               217,204.19
    Tennessee............................            10,978,000.00            10,978,000.00               490,436.93
    Texas................................            29,538,000.00            29,538,000.00             3,520,908.18
    U.S. Virgin Islands..................             1,542,000.00             1,542,000.00               134,353.56
    Utah.................................             6,937,000.00             6,937,000.00             1,190,912.95
    Vermont..............................             4,963,000.00             4,963,000.00             1,466,921.25
    Virginia \1\.........................            12,716,000.00             8,031,200.00             6,369,466.20
    Washington...........................            11,294,000.00            11,194,000.00             6,653,422.04
    West Virginia........................             6,340,000.00             6,340,000.00             5,034,308.70
    Wisconsin............................            10,565,000.00            10,565,000.00             5,577,914.15
    Wyoming..............................             4,827,000.00             4,827,000.00             1,101,205.77
                                          --------------------------------------------------------------------------
          Total..........................           566,295,000.00           524,584,584.18          112,579,842.63
    ----------------------------------------------------------------------------------------------------------------
    \1\ Verification of Obligation Data in Progress

                                                FISCAL YEAR 2003 SHSGP II
    ----------------------------------------------------------------------------------------------------------------
                   Grantee                       Award Amount              Obligation           Amount Drawn Down
    ----------------------------------------------------------------------------------------------------------------
    Alabama..............................           $25,049,000.00           $22,448,099.99            $2,077,219.12
    Alaska...............................            13,230,000.00            11,466,000.00                82,013.14
    American Samoa \1\...................             3,926,000.00             3,403,000.00               398,076.00
    Arizona..............................            28,033,000.00            28,033,000.00             3,124,190.00
    Arkansas.............................            19,585,000.00            16,974,000.00             4,718,796.73
    California...........................           119,256,000.00           119,186,813.00            22,821,978.15
    Colorado.............................            25,111,000.00            25,111,000.00             1,587,461.43
    Connecticut \1\......................            21,893,000.00             3,326,834.23  .......................
    Delaware.............................            13,733,000.00            13,733,000.00  .......................
    District of Columbia.................            13,006,000.00             1,734,000.00             1,753,163.37
    Florida..............................            62,655,000.00            62,655,000.00             6,932,847.97
    Georgia..............................            37,579,000.00            37,579,000.00             2,764,500.00
    Guam.................................             4,226,000.00             4,226,000.00  .......................
    Hawaii...............................            15,079,000.00            15,079,000.00             1,183,054.77
    Idaho................................            15,375,000.00            14,350,000.00             2,059,200.37
    Illinois.............................            50,005,000.00            44,656,232.00               258,979.73
    Indiana..............................            30,194,000.00            26,285,402.27             9,776,430.67
    Iowa \1\.............................            20,282,000.00            17,689,625.12             1,337,200.95
    Kansas \1\...........................            19,603,000.00            16,989,000.00                24,886.33
    Kentucky.............................            23,838,000.00            20,660,000.00             2,204,308.52
    Louisiana............................            25,037,000.00            22,741,123.28               569,112.82
    Maine................................            15,232,000.00            15,232,000.00             2,403,869.60
    Maryland.............................            28,037,000.00            28,037,000.00               519,347.05
    Massachusetts........................            31,020,000.00            31,020,000.00             8,321,342.08
    Michigan.............................            42,162,000.00            36,227,500.00               469,974.88
    Minnesota............................            26,690,000.00            23,845,370.12               693,032.00
    Mississippi..........................            20,083,000.00            20,083,000.00               654,920.00
    Missouri.............................            28,697,000.00            28,697,000.00             5,048,400.00
    Montana..............................            14,047,000.00            13,110,500.00               205,653.27
    N. Mariana Islands...................             3,963,000.00             3,963,000.00               186,642.00
    Nebraska.............................            16,568,000.00            16,568,000.00             4,128,342.94
    Nevada...............................            17,935,000.00            17,935,000.00               845,533.87
    New Hampshire........................            15,172,000.00            13,362,968.47             6,664,255.98
    New Jersey...........................            37,671,000.00            37,671,000.00             2,318,264.63
    New Mexico...........................            16,956,000.00            13,635,150.00                68,600.00
    New York \1\.........................            70,172,000.00            70,172,000.00            63,000,000.00
    North Carolina.......................            36,840,000.00            36,840,000.00               455,173.00
    North Dakota.........................            13,200,000.00            11,440,410.00               247,219.42
    Ohio.................................            46,378,000.00            46,378,000.00             3,047,735.70
    Oklahoma.............................            21,996,000.00            21,996,000.00               183,361.58
    Oregon...............................            22,081,000.00            19,403,038.00             1,344,549.74
    Pennsylvania.........................            49,189,000.00            49,189,000.00             2,255,466.08
    Puerto Rico..........................            23,118,000.00            23,118,000.00  .......................
    Rhode Island \1\.....................            14,540,000.00            12,603,756.96             9,285,838.00
    South Carolina.......................            23,882,000.00            23,882,000.00               830,961.88
    South Dakota.........................            13,591,000.00            13,591,000.00             3,499,236.39
    Tennessee............................            29,080,000.00            29,080,000.00                28,493.47
    Texas................................            78,238,000.00            78,238,000.00             1,412,151.75
    U.S. Virgin Islands..................             4,085,000.00             4,085,000.00             2,358,158.50
    Utah.................................            18,374,000.00            18,374,000.00             3,388,302.90
    Vermont..............................            13,147,000.00            13,147,000.00               559,083.58
    Virginia.............................            33,683,000.00            29,861,000.00            21,240,605.96
    Washington...........................            29,917,000.00            27,080,797.47             1,614,935.49
    West Virginia........................            16,792,000.00            14,553,000.00  .......................
    Wisconsin............................            27,985,000.00            27,985,000.00            12,926,737.90
    Wyoming..............................            12,784,000.00            12,784,000.00               149,005.29
                                          --------------------------------------------------------------------------
          Total..........................         1,500,000,000.00         1,411,514,620.91          224,028,615.00
    ----------------------------------------------------------------------------------------------------------------
    \1\ Verification of Obligation Data in Progress.

                                                 FISCAL YEAR 2003 UASI I
    ----------------------------------------------------------------------------------------------------------------
                                                                                                      Amount Drawn
                              Grantee                             Award Amount       Obligation           Down
    ----------------------------------------------------------------------------------------------------------------
    New York City.............................................    $24,768,000.00  ................  ................
    National Capital Region...................................     18,081,000.00  ................  ................
    Los Angeles...............................................     12,422,000.00  ................  ................
    Seattle...................................................     11,201,000.00     $1,597,300.00        $65,825.45
    Chicago...................................................     10,896,000.00      2,700,000.00  ................
    San Francisco.............................................     10,349,000.00         42,000.00  ................
    Houston...................................................      8,634,000.00  ................  ................
                                                               -----------------------------------------------------
          Total...............................................     96,351,000.00      4,339,300.00         65,825.45
    ----------------------------------------------------------------------------------------------------------------

                                                FISCAL YEAR 2003 UASI II
    ----------------------------------------------------------------------------------------------------------------
                   Grantee                       Award Amount              Obligation           Amount Drawn Down
    ----------------------------------------------------------------------------------------------------------------
    NEW YORK.............................          $135,266,607.00           $33,816,652.00           $82,816,652.00
        New York City, NY................           125,000,000.00  .......................  .......................
        Buffalo, NY......................            10,266,607.00  .......................  .......................
    NATIONAL CAPITAL REGION..............            42,409,851.00  .......................  .......................
    ILLINOIS.............................            29,975,733.00  .......................  .......................
        Chicago, IL......................            29,975,733.00  .......................  .......................
    TEXAS................................            34,165,283.00               963,124.96                 7,987.72
        Houston, TX......................            23,766,700.00  .......................  .......................
         Dallas, TX......................            10,398,583.00  .......................  .......................
    CALIFORNIA...........................            62,202,490.00  .......................               134,049.00
        Los Angeles, CA..................            18,874,838.00  .......................  .......................
        San Francisco, CA................            18,587,312.00  .......................  .......................
        San Diego, CA....................            11,359,682.00  .......................  .......................
        Sacramento, CA...................             6,912,795.00  .......................  .......................
        Long Beach, CA...................             6,467,863.00  .......................  .......................
    WASHINGTON...........................            18,186,668.00               600,000.00                    13.09
        Seattle, WA......................            18,186,668.00  .......................  .......................
    MASSACHUSETTS........................            16,727,125.00             1,718,408.00  .......................
        Boston, MA.......................            16,727,125.00  .......................  .......................
    COLORADO.............................            15,568,474.00  .......................  .......................
        Denver, CO.......................            15,568,474.00  .......................  .......................
    PENNSYLVANIA.........................            21,038,924.00  .......................  .......................
        Philadelphia, PA.................            14,215,223.00  .......................  .......................
        Pittsburgh, PA...................             6,823,701.00  .......................  .......................
    MISSOURI.............................            19,548,603.00             2,466,979.96               365,000.00
         St. Louis, MO...................             9,850,142.00  .......................  .......................
        Kansas City, MO..................             9,698,461.00  .......................  .......................
    FLORIDA..............................            18,959,558.00             3,695,318.60             3,296,000.00
        Miami, FL........................            13,184,569.00  .......................  .......................
        Tampa, FL........................             5,774,989.00  .......................  .......................
    OHIO.................................            13,859,426.00               202,370.00                 7,874.27
        Cincinnati, OH...................             7,991,055.00  .......................  .......................
        Cleveland, OH....................             5,868,371.00  .......................  .......................
    MICHIGAN.............................            12,272,550.00  .......................  .......................
        Detroit, MI......................            12,272,550.00  .......................  .......................
    NEW JERSEY...........................            11,892,942.00  .......................  .......................
        Newark, NJ.......................            11,892,942.00  .......................  .......................
    ARIZONA..............................            11,033,467.00               200,000.00                14,469.00
        Phoenix, AZ......................            11,033,467.00  .......................  .......................
    MARYLAND.............................            10,900,944.00             2,725,236.00             1,464,126.51
        Baltimore, MD....................            10,900,944.00  .......................  .......................
    HAWAII...............................             6,870,891.00  .......................             1,717,723.00
        Honolulu, HI.....................             6,870,891.00  .......................  .......................
    OREGON...............................             6,766,108.00               150,000.00                 1,151.99
        Portland, OR.....................             6,766,108.00  .......................  .......................
    LOUISIANA............................             6,282,661.00             1,570,665.00  .......................
        New Orleans, LA..................             6,282,661.00  .......................  .......................
    TENNESSEE............................             6,071,695.00                30,000.00  .......................
        Memphis, TN......................             6,071,695.00  .......................  .......................
                                          --------------------------------------------------------------------------
          Total..........................           500,000,000.00            48,138,754.52            89,825,046.58
    ----------------------------------------------------------------------------------------------------------------

                                  STATE PLANS

        Question. States were to submit their plans to the Department by
    December 31, 2003. How many State plans were delivered by that date?
    How many State plans have now been submitted? How many, and which,
    State plans have not yet been approved? In reviewing the plans, what
    lessons have been learned about DHS plan requirements and what best
    practices have been identified?
        Answer. Each State, the District of Columbia, the Commonwealth of
    Puerto Rico, and the territories were required to submit their
    assessments and strategies by January 31, 2004. Much of how the States
    and territories will distribute and utilize Homeland Security Grant
    Program funds will be influenced by the results of the State Homeland
    Security Assessments and Strategies.
        These assessments and strategies are critically important to both
    the States and the Federal Government. They provide a wealth of
    information regarding each State's vulnerabilities, capabilities, and
    future requirements, as well as each State's preparedness goals and
    objectives. They provide each State with a roadmap as to how current
    and future funding, exercise, training, and other preparedness
    resources should be directed and targeted, and they provide the Federal
    Government with a better understanding of needs and capabilities.
        All assessments and strategies have been received and reviewed or
    currently are under review by an intra-DHS review board comprised of
    representatives from major Department components. Of those 56
    strategies, 53 have been approved by the Department. The remaining
    three--Idaho, Northern Marianna Islands, and the District of Columbia--
    should be approved soon. ODP officials are continuing to work with
    officials from these states and territories to ensure that the
    requisite information and changes are made to their strategies.
                                     ______

               Questions Submitted by Senator Ernest F. Hollings

                     SEAPORT SECURITY IMPLEMENTATION COSTS

        Question. The Coast Guard has estimated that the cost of meeting
    security mandates from the Maritime Transportation Security Act will be
    $1.1 billion initially and then $7.1 billion over the next 10 years.
        The deadline for submitting port security plans to the Coast Guard
    passed at the end of 2003 and many ports and facilities either turned
    in nothing, or submitted reports that the analysis was still pending.
    It has been reported that the Coast Guard also does not have the
    personnel resources to review and evaluate the assessments when they
    are turned in.
        Most shipping activity is controlled by State, local and private
    sector operations, and the Federal presence is minimum. The ports are
    not deep pocketed, and tend to focus all activity on efficiency.
    Relying on them as the total source of funding will ensure that we get
    weak port security. By way of comparison, this would be like saying at
    the Southwest Border, where a rancher's ranch borders the Rio Grande
    and the Mexican border; ``we have concerns about illegal immigration
    over your land, and we want you to put up gates and fences and conduct
    surveillance of your property, and if you don't we will take your ranch
    away from you''. While the protection of our border is a shared burden,
    the Administration budget proposal does not adequately address it's
    obligation.
        The cost of securing our seaports is high, yet not impossible to
    cover. The Coast Guard has published estimates that the cost will be
    over $7 billion over the next 10 years. Why has the administration only
    provided $46 million in the budget to meet this need?
        Answer. The President's Budget provides $1.9 billion for port
    security in the Department of Homeland Security, a 13 percent increase
    over the 2004 level.
        Within the 2005 total is $1,675 million for Coast Guard port,
    waterway, and coastal security activities, including over $100 million
    to implement the Maritime Transportation Security Act (MTSA).
        The DHS port security total also includes $164 million in U.S.
    Customs and Border Protection for the Container Security Initiative and
    the Customs Trade Partnership Against Terrorism as well as the $46
    million in the Office for Domestic Preparedness for port security
    grants.
        The Administration's budget request supports the President's
    National Strategy for Homeland Security. This strategy provides the
    basic framework to mobilize and organize the Nation--Federal, State and
    local governments, the private sector, and the American people--in the
    complex mission of protecting our homeland.
        To date, the Coast Guard has received approximately 97 percent of
    the Facility Security Plans that it anticipates receiving in response
    to the Federal Maritime Security Regulations that were promulgated
    under the Maritime Transportation Security Act (MTSA). The Coast Guard
    is currently reviewing these Facility Security Plans with the
    assistance of one of the Nation's premier engineering companies, Black
    and Veatch. The review process includes three stages that concludes
    with an on-site examination to ensure that the security measures
    outlined in the plan are appropriate and are being fully implemented.
    The Coast Guard has allocated the resources necessary to conduct a full
    review of each Facility Security Plan before July 1, 2004 when all
    facilities are required to be operating under their approved plans.
        The estimated costs of meeting the security mandates from the
    Maritime Transportation Security Act do not account for the security
    measures that companies have already taken to enhance security. For the
    sake of good business practice, or to comply with regulations
    promulgated by other Federal and State agencies, many companies have
    already made substantial investments to upgrade and improve security of
    their operation. We also realize that not every company engaged in
    maritime commerce would implement the requirements for increased
    security in exactly the same manner. Depending on each company's
    choices, some companies could spend much less than what was anticipated
    in the regulatory analysis for the MTSA regulations.
        The Department fully understands there will be short-term costs,
    particularly for many smaller ports or companies with less security
    experience. The Coast Guard is fully engaged with the maritime industry
    to help alleviate the burden. The Department has also awarded or made
    available a total of nearly $500 million in port security grants over
    the past 2 years and anticipates convening the fourth round of grants
    in spring 2004.
        The security requirements of the Maritime Transportation Security
    Act were developed with the full cooperation of the private sector. The
    implementation of these requirements will complement the Department's
    already strong response.

           OVERALL COAST GUARD BUDGET REQUEST ONLY 6 PERCENT INCREASE

        Question. The Commandant of the Coast Guard testified that the
    Coast Guard was on track to restore resources and performance of non-
    security missions, such as search and rescue of stranded mariners, to
    pre-9/11 levels. However, a draft GAO report (non-public until mid-
    March) finds that the resource hours dedicated to the search and rescue
    mission search & rescue is down 22 percent from pre-9/11 levels. The
    resource hours dedicated to many other non-security missions, such as
    fisheries enforcement, living marine resources, and drug interdiction,
    are all down as well.
        Does this budget really fund the Coast Guard at sufficient levels?
    The request is really only a 6 percent increase over what we enacted
    last year, if you include the supplementals. Why is Coast Guard getting
    so little of the increase when it has so many responsibilities related
    to security and non-security missions?
        Answer. Yes, the fiscal year 2005 budget request is sufficient to
    fund Coast Guard operations. A 6 percent increase is not a fair
    comparison since the fiscal year 2004 Coast Guard budget includes
    supplemental funding provided for Iraqi Freedom and Hurricane Isabel.
    Supplemental appropriations are for specific purposes and are non-
    recurring. Therefore, the fiscal year 2005 Coast Guard budget would not
    reflect this funding.
        While the draft GAO report referenced in this question noted that
    that the resource hours for non-homeland security programs decreased,
    the report also had the following conclusion: ``The Coast Guard's
    performance results--measures used to track each program's annual
    progress--generally did not mirror the trends in resource use. Instead,
    results for programs GAO reviewed were generally stable or improved
    regardless of the resources applied, and nearly all of the programs
    that GAO reviewed met their performance targets.'' (Draft GAO-04-043,
    March 2004).
        Search and Rescue (SAR) is a demand driven mission. While resource
    hours for SAR are down, it is due to less distress calls than from lack
    of resource hours. Also from the GAO report: ``. . . the search and
    rescue program's target for fiscal year 2003 was to save 85 percent of
    mariners in distress and the program achieved this goal by saving over
    87 percent of them.''
        While resource hours are an important measure, the Coast Guard
    relies on the judgment of the operation commander to apply available
    resources based on the risks in the relevant area of operations. This
    flexibility is critical to apply Coast Guard resources to the numerous
    missions mandated in Section 888 of the Homeland Security Act of 2002.
        Question. I am hearing reports that the Coast Guard's resource
    hours for most non-security missions are still down below pre-9/11
    levels. For example, I've heard that the search and rescue mission is
    down 22 percent from pre-9/11 levels. What can you tell me about that?
        Answer. In fiscal year 2003, search and rescue operational
    activity, as reported by cutters, aircraft and boats (ashore) in the
    Abstract of Operations (AOPS), was 22 percent lower than pre-9/11
    levels. The pre-9/11 level is defined as the annual average of the
    eight-quarter period beginning with the 4th quarter of fiscal year 1999
    and ending with the 3rd quarter of fiscal year 2001.
        The observed decrease in operational activity does not necessarily
    reflect reduced readiness or responsiveness. Search and rescue is a
    demand-driven mission. As such, a decrease in search and rescue
    resource hours is a result of a reduction in the number of distress
    calls received. Further, search and rescue operational activity may
    also be affected by any number of the following factors:
      --The economy--boating activity mirrors the economy's fluctuations.
      --Weather patterns and number of severe storms.
      --Improved safety equipment onboard vessels.
      --Better built craft; modern vessels are more reliable.
      --Better communications that prevent false overdue cases.
      --Increased use of private towing companies providing non-emergency
            assistance.
        The Coast Guard continues to respond to all urgent search and
    rescue calls.

                           INTELLIGENCE DISSEMINATION

        Question. Section 70113, of the MTSA mandated a single system of
    collection and analysis on vessels, cargo, crew, and passengers
    entering into the U.S. Maritime intelligence had traditionally been
    developed in response to the needs of the U.S. Navy, and the Office of
    Naval Investigations (``ONI'') was crucial during World War II as they
    were responsible for de-encrypting German and Japanese naval codes.
    Later during the Cold War, this agency was charged with the tracking of
    Soviet naval assets and submarines. The first efforts in tracking and
    monitoring commercial maritime shipping occurred in the 1980's, when
    the Coast Guard was brought into the naval intelligence world,
    primarily to help track vessels that might be involved in drug running.
        The current headquarters for the Maritime Intelligence Center
    (``MIC'') located in Suitland, Md, houses Navy and Coast Guard
    officials. There were 1,500 Navy officers and about 40 Coast Guard
    officers working the unit. Since then, some strides have been taken to
    improve the unit, including the formal recognition of the Coast Guard
    into the intelligence community, appointment by the Coast Guard of the
    first head of Coast Guard intelligence, and a slight increase of
    resources. However, much remains to be done in this area, and the
    agencies have not cooperated at all to forge a common program. In
    response to your concerns about coordination of intelligence, you
    earmarked $25 million to TSA, in hope that bringing new money to the
    pot might stimulate a more coordinated effort. Given that we only
    inspect 2 or 3 percent of our cargo entering into U.S. ports, and good,
    coordinated intelligence will be vital.
        Mr. Secretary, you mentioned in your testimony that DHS is working
    to improve the sharing of intelligence. You have a major issue facing
    you in developing a coherent policy that will allow for the
    dissemination of intelligence reports to many of the different
    personnel involved in Homeland Security. First off, you have to collect
    certain information from officials at places like the CIA, or FBI, and
    get it presented to your department. Then you have to analyze it and
    verify it, and then pass the information out to the people who we can
    provide the highest degree of oversight and security. In many cases,
    this may be an official who works at a power plant, or is in charge of
    a rail terminal, or chemical facility, and who are currently not able
    to receive government security information that is classified. In the
    case of homeland security many officials that will provide security
    will either be from the private sector, or local or State officials.
        Even within the Federal Government, and within your Agency, we are
    experiencing coordination problems. The Maritime Transportation
    Security Act mandated the creation of a single system of information
    collection and analysis in order to bring together information on ship
    movements, and connect it to information on cargo and shippers, and
    information on crew members and passengers to make sure that we have
    the best information possible to evaluate risk.
        Yet, since the passage of our legislation, there have been no
    efforts at all to coordinate this information. In fact, since we passed
    the bill, Customs who used to have a presence at the Coast Guard
    Maritime Intelligence Center has eliminated its presence, and started
    construction of a new cargo intelligence facility. This is ludicrous.
    What are you going to do to make sure that the public can receive and
    act upon our intelligence, and increase homeland security, and can you
    take steps to start to harmonize the own agencies within your
    Department?
        Answer. The Office of Information Analysis (IA) works in close
    connection with the State and Local and Private Sector Directorates
    within the Department of Homeland Security (DHS) in order to provide
    timely and valuable threat-related information to the State and local
    officials and private sector workforce that protect and provide for our
    Nation's people and infrastructure. This involves receiving and acting
    on feedback from such individuals, updating and specifying recommended
    protective measures, and communicating directly with first responders
    and State officials when necessary. Additionally, in an effort to unite
    and coordinate Department wide efforts, the Assistant Secretary for
    Information Analysis hosts a twice monthly meeting of the intelligence
    and operations directors and/or their representatives from each DHS
    entity. This meeting is used to coordinate policies and efforts, to
    ensure close and consistent communication, and to discuss
    recommendations for improvements in information sharing. The Department
    has taken preliminary steps to harmonize the intelligence efforts of
    its 20 plus separate entities by identifying legacy and new analytic
    resources as well as the missions and capabilities of the respective
    offices.
        The Department of Homeland Security is coordinating information
    sharing. The Coast Guard has taken a leadership role within DHS to
    ensure that maritime intelligence products are accurate and available
    to the DHS Information Analysis and Infrastructure Protection (IAIP)
    Directorate and throughout the entire Federal Government. The Coast
    Guard Command Center is co-located with the National Response Center
    (NRC) sharing threat information and reports of suspicious activities
    from the maritime industry and other maritime stakeholders. In
    addition, the Coast Guard has provided access to its intelligence
    databases, advice to other agencies developing intelligence-shared
    architectures, and exchanged intelligence analysts and liaison officers
    with other agencies active in the maritime arena. These liaison
    officers work with the following organizations: Terrorist Threat
    Integration Center, Defense Intelligence Agency, Federal Bureau of
    Investigation, Border and Transportation Security, U.S. Navy, IAIP,
    National Security Agency, Central Intelligence Agency, National Drug
    Intelligence Center, El Paso Intelligence Center, and Joint
    Intelligence Task Force for Combating Terrorism. The Coast Guard and
    Navy also continue to build an effective joint intelligence partnership
    to enhance maritime domain awareness. The Coast Guard's Intelligence
    Coordination Center is co-located with the Office of Naval
    Intelligence, which comprises the National Maritime Intelligence Center
    (NMIC).
        Further, the Coast Guard and Border and Transportation Security
    (BTS) have exchanged personnel to enhance data sharing between the CG
    Intelligence Coordination Center's COASTWATCH (which analyzes
    information from notice of arrival reports on vessels, people, and
    certain dangerous cargoes approaching U.S. ports) and BTS' National
    Targeting Center (cargo tracking process). Additionally, the Coast
    Guard's two Maritime Intelligence Fusion Centers are collocated with
    the U.S. Navy Shipping coordination Center to exchange Maritime
    Homeland Security (HLS) and Homeland Defense (HLD) information.

                    PASSENGER SCREENING & CHECKPOINT ISSUES

        Question. A provision in the fiscal year 2004 Homeland Security
    Appropriations bill that was signed into law by President Bush on
    October 1, 2003, maintains a cap on TSA's full-time staffing at 45,000
    positions. TSA has been trying to meet this employment cap since it was
    first imposed, and over the last 6 months has cut more than 6,000
    screener positions from its workforce.
        Does the employment cap of 45,000 positions in the fiscal year 2004
    Homeland Security Appropriations bill provide TSA the flexibility it
    needs to devise appropriate staffing levels for individual facilities?
        Answer. TSA is managing to keep the workforce under the 45,000 FTE
    level by creating a more flexible workforce. TSA is better coordinating
    airline schedules and passenger load with staffing needs, is increasing
    the proportion of part-time to full-time screeners, and is
    strategically using its mobile national screener force to meet seasonal
    fluctuations in workload. TSA expects to have a part-time screener
    workforce of close to 20 percent by the end of the current fiscal year.
    Part-time screeners create additional operational flexibility when
    scheduling screeners to satisfy varying levels of demand. As a result
    of reducing excess capacity at periods of lower demand, TSA is seeking
    to make more FTEs available to the system as a whole during peak
    periods.
        Question. How will TSA deal with the employment cap as air traffic
    returns to more normal traffic growth levels?
        Answer. We share Congress' desire to ensure that our screeners are
    deployed effectively and efficiently to maximize the safety and
    security of the traveling public. TSA will continue to review its
    workforce requirements at each airport, considering the number,
    location, and balance of full-time and part-time screeners. We will
    engage airport operators and air carriers to ensure that growth rates,
    changes in flight schedules, and other concerns, such as new technology
    that improves screener performance and efficiency, are incorporated
    into our planning. As we move forward into the busy summer travel
    season, we will gain a better understanding of whether or not screener
    staffing levels are adequate for the long term.
        Question. Do you believe that this is a situation where budgetary
    issues may end up driving operational issues rather than the actual
    threat levels?
        Answer. Budgetary considerations are not driving decisions on the
    level of aviation security provided by our screening operation.
    Ensuring adequate operating efficiency on the part of airlines and
    airports given the need to maintain high security is a continuing
    challenge that TSA will work through as we refine and improve screening
    operations.
        Question. Would it be more effective for TSA to develop staffing
    standards for screeners that are based on ensuring that the average
    aviation security-related delay experience by passengers does not
    exceed 10 minutes per boarding?
        Answer. TSA is in the process of completing work on the development
    of staffing standards for each airport based on modeling which include
    criteria such as passenger wait times.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

                               ALL-STATE MINIMUM

        Question. I was disappointed that President Bush's proposed budget
    for fiscal year 2005 drops the all-state minimum formula, which I
    authored, from the State Homeland Security Grant Program. This formula
    assures that each State receives a minimum of 0.75 percent of those
    grants to help support their first responders' basic preparedness
    needs.
        Not only would this change result in the loss of millions in
    homeland security funding for the fire, police and rescue departments
    in small- and many medium-sized states, but also deal a crippling blow
    to their efforts to build and sustain their terrorism preparedness.
        Mr. Secretary, you and I have often spoken on how to fairly
    allocate domestic terrorism preparedness funds to our states and local
    communities. I thought we both agreed that fire, police and emergency
    medical rescue teams in each State deserve support in achieving the new
    homeland security responsibilities the Federal Government demands.
    Imagine my surprise, then, when I read in the fiscal year 2005 budget
    proposal that the State Homeland Security Grant Program would be
    allocated among the states based on population concentrations, critical
    infrastructures, and other significant terrorism risk factors, as
    determined by you.
        Mr. Secretary, does the Bush Administration want to shortchange
    rural states, rolling back the hard-won progress we have begun to make
    in homeland security by slashing the protections provided to us by the
    all-state minimum?
        Answer. The provision of homeland security funds to all states and
    territories is essential to the Federal, State, and local effort to
    enhance national security. I have said consistently that I believe
    there should be a minimum level of preparedness across the country. The
    language in the President's fiscal year 2005 request for the Department
    of Homeland Security recognizes that factors other than a minimum
    formula and population should be considered in making overall funding
    allocations. The language further states that the Secretary should have
    the latitude and discretion to make this determination based on a
    number of factors, including population concentrations, critical
    infrastructure, and other significant terrorism risk factors.
        Terrorism and the threat of terrorist acts are not static, as is
    the current formula included in the USA PATRIOT Act. Instead, threats,
    risks, and vulnerabilities are fluid and can change based on a number
    of factors. The Department of Homeland Security should not be
    constrained by a formula and distribution method that does not change
    to meet current and future security needs. As you know, each State has
    submitted an updated homeland security strategy as a requirement of
    receiving and distributing fiscal year 2004 Office for Domestic
    Preparedness grant funds. It is the Department's expectation that these
    strategies, and periodically updated strategies, will provide
    invaluable information to determine appropriate funding levels for all
    states--large and small, urban and rural.
        The Administration and Congress share the goal of enhancing the
    Nation's ability to deter, prevent, respond to, and recover from acts
    of terrorism. The Administration firmly supports the notion that
    security needs to be improved across the Nation. The Administration,
    however, has consistently supported a change in the USA PATRIOT Act
    formula so that we can apply more factors than just population to
    distributing and expending limited homeland security resources.
        Question. Mr. Secretary, would you agree that homeland security is
    a national responsibility shared by all states, regardless of size?
        Answer. I strongly support the idea that homeland security is a
    national responsibility shared by all states, regardless of size. That
    is why I firmly believe that there should be a minimum level of
    preparedness across the country. Since its creation last year, the
    Department has provided more than $8 billion to support and enhance the
    security of states and localities. The President's fiscal year 2005
    budget request continues this strong support and commitment to the
    Nation's emergency prevention and response community. The President's
    budget clearly demonstrates the continuing priority placed on homeland
    security through requesting $40.2 billion in total new resources for
    fiscal year 2005, which is an increase of 10 percent above the
    comparable fiscal year 2004 level.
        Question. Mr. Secretary, do you agree that each State has basic
    terrorism preparedness needs and, therefore, a minimum amount of
    domestic terrorism preparedness funds is appropriate for each state?
        Answer. I strongly support the idea that homeland security is a
    national responsibility shared by all states, regardless of size. That
    is why I firmly believe that there should be a minimum level of
    preparedness across the country.
        Question. Mr. Secretary, would you support a budget supplement
    amendment to restore the 0.75 percent minimum to the State Formula
    Grants Program, which include the State Homeland Security Grant
    Program, the Citizens Corps and the Law Enforcement Terrorism
    Prevention Grants Program?
        Answer. I strongly support the President's fiscal year 2005 budget
    request that provides for additional factors to be considered when
    making determinations on how to distribute homeland security funds to
    states and localities. While I support the concept behind the PATRIOT
    Act--that every State should receive minimum levels of support--I
    firmly believe that funding allocations decisions should be based on a
    number of other factors not included in the PATRIOT Act formula,
    including the presence of critical infrastructure and other significant
    risk factors. With the input that the Department is receiving from the
    states through their updated homeland security strategies, and with the
    more robust intelligence analysis and data collection capabilities
    within the Department, the Department will be better able to prioritize
    support for your efforts to prevent, prepare for, and respond to
    terrorist incidents. The President's fiscal year 2005 request
    recognizes this enhanced ability, and provides the Secretary of
    Homeland Security the latitude and discretion to determine appropriate
    funding levels to the states.

                                FIRST RESPONDERS

        Question. President Bush often says that he wants to ensure that
    our State and local first responders receive the resources necessary to
    do the job the American public expects them to do.
        I find that hard to believe, though, when I read that he proposes
    an $805 million, or 18.4 percent, overall cut in funds for Office for
    Domestic Preparedness funding programs that directly benefit police,
    fire and medical rescue units. The Administration argues this is
    justified because it does not believe those funds are ``targeted'' to
    homeland security capabilities.
        I believe, however, that the current Administration has failed to
    make first responders a high enough priority by consistently
    underfunding homeland security efforts of every state.
        The Hart-Rudman Terrorism Task Force Report argued that our Nation
    will fall approximately $98.4 billion short of meeting critical
    emergency responder needs through this decade's end if current funding
    levels are maintained.
        Clearly, the domestic preparedness funds available are still not
    enough to protect from, prepare for and respond to future domestic
    terrorist attacks anywhere on American soil.
        Would you agree, Mr. Secretary, that to be truly protected from,
    prepared for and able to respond to future terrorist attacks we should
    be looking to increase the funds to our Nation's State and local first
    responders, rather than decrease them, as proposed by the President?
        Answer. The President's fiscal year 2005 request includes more than
    $3.5 billion to support ODP programs and activities. This represents a
    $3.3 million increase over the Fiscal year 2004 request. The fiscal
    year 2005 request includes funds to continue the Homeland Security
    Grant Program which includes the State Homeland Security Program at
    $1.4 billion; the Law Enforcement Terrorism Prevention Program at $500
    million; and the Citizen Corps Program at $50 million. Funds are also
    provided for the continuation of the Urban Areas Security Initiative at
    $1.4 billion; the Fire Act Program at $500 million; the Emergency
    Management Performance Grants at $170 million; as well as for ODP's
    training, exercise, and technical assistance efforts.
        The continuation of these efforts, and the $3.3 million increase in
    ODP's overall request, coupled with the President's request for a 10
    percent increase in funding for DHS as a whole, provides ODP, and the
    entire Department, with the resources we require to help secure the
    Nation from acts of terrorism. The Administration and Department remain
    committed to providing our Nation's emergency prevention and response
    community the resources they need to continue to secure our Nation from
    future acts of terrorism.

                                 FIRE SERVICES

        Question. After paying repeated lip service to the great sacrifices
    made by our Nation's first responders, last week President Bush
    unveiled a budget that cuts total Federal assistance to first
    responders by $800 million.
        This fiscal year Congress appropriated $4.2 billion to address
    first responder and homeland security needs. Despite heightened terror
    alerts and multiple studies documenting the pressing needs of the fire
    service, the administration has proposed a $3.5 billion package for
    fiscal year 2005 that cuts the FIRE ACT and grant programs to State and
    local jurisdictions.
        Consistent with the President's opposition to using Federal dollars
    to hire fire fighters, the budget does not include any funding for the
    newly authorized SAFER (Staffing for Adequate Fire and Emergency
    Response) program, which fire departments nationwide argue is critical
    to maintaining their commitment to public safety.
        The budget also proposes cutting a total of $435 million from first
    responder grants to states and other important fire service programs,
    including eliminating the $60 million grant program for Urban Search
    and Rescue and the $60 million competitive training grant programs. An
    additional $20 million has been slashed from the fund for technical
    training and national exercises.
        Each year since the terrorist attacks of 9/11, Congress has
    increased President Bush's proposed appropriations to the fire service.
    And it is now incumbent upon us to do that again.
        Mr. Secretary, this is a time when our Nation needs to support our
    communities' firefighters. On September 11th, the Nation saw that the
    first on the scene at the World Trade Center were the heroic
    firefighters of New York City. Those real-life heroes, 343 of whom gave
    the ultimate sacrifice, should remind us of how essential that support
    is.
        We hear a lot of rhetoric from this Administration about the need
    to secure our homeland and keep our Nation safe. It is very unfortunate
    that the President has decided not to put his money where his mouth is.
    These cuts are unconscionable and lack clear understanding of the many
    problems facing our Nation's first responders--especially those serving
    in our fire departments.
        Aside from rearranging the deck chairs at DHS, how will your budget
    plan at least as much money out to our brave firefighters as it did
    last year?
        Answer. The Department is strongly committed to addressing the
    needs of the Nation's first responders. In fiscal year 2005, the DHS
    budget request includes $3.6 billion for terrorism and emergency
    preparedness grants and assistance. Since March 1, 2003, the Department
    has allocated and awarded more than $8 billion in overall grant funding
    for States and Territories to enhance the abilities of their first
    responders. President Bush is the first president to request funding
    for the fire service and the emergency medical services, and the first
    to call specifically for funding of the Assistance to Firefighter Grant
    Program in his budget. When the 2004 grant process is completed, DHS
    will have distributed almost $2 billion to more than 20,000 local fire
    departments, and the President's fiscal year 2005 Budget has proposed
    another $500 million. From fiscal year 2002 through fiscal year 2004,
    the Administration as a whole has approved or requested more than $17
    billion for State and local fire departments, law enforcement, public
    health biodefense, and emergency response. In addition, the Bush
    Administration has trained more than 700,000 first responders since
    September 11, 2001.

                                  IMMIGRATION

        Question. The President's budget proposes a 40 percent cut in the
    amount of directly appropriated funds for the Bureau of Citizenship and
    Immigration Services (CIS), from the nearly $235 million appropriated
    for the current year to $140 million for fiscal year 2005.
        You mention in your written testimony the President's guest worker
    proposal. If Congress approves such a guest worker plan, it would
    drastically increase the workload of CIS. Why is the President
    proposing a 40 percent cut in an agency whose workload he wants to
    increase dramatically?
        Answer. The President's fiscal year 2005 Budget is not proposing a
    cut in the USCIS budget. In fact, the President's budget includes a
    $300 million increase over last years levels, including an additional
    $60 million in discretionary funding towards backlog reduction efforts
    aimed at achieving a 6-month processing time for all immigration
    benefit applications by fiscal year 2006.
        The President's fiscal year 2005 budget reflects the current
    proposal recently adopted by USCIS to adjust its fee schedule through
    the rulemaking process. This fee adjustment includes amounts for
    administrative support services ($155 million) previously funded
    through appropriated funds (tax dollars). Thus, this proposal has no
    impact on the USCIS budget except for the fact that the funding source
    for these services will be by way of fees versus tax dollars. With the
    exception of the $140 million in appropriated backlog reduction funds,
    USCIS will be a wholly fee-funded agency in fiscal year 2005.
        Beginning in fiscal year 2002, USCIS has been receiving a total of
    $100 million in funds for backlog reduction to achieve the 6-month
    processing time. The $100 million is made up of $80 million in
    appropriated funds and $20 million in premium processing fees. The
    President is proposing a 60 percent increase for backlog reduction
    efforts in fiscal year 2005, bringing the total backlog reduction funds
    from $100 million to $160 million ($140 million in appropriated funds
    and $20 million from the premium processing fees).
        Question. Speaking of the guest worker program, I wrote to the
    President last month and asked him to submit a legislative proposal to
    Congress that would implement his plan. As you know, we have a short
    legislative year ahead of us. Why has the President not already
    submitted proposed legislation? Will he do so?
        Answer. On January 7, 2004, the President announced principles in
    creating a new temporary worker program that would match willing
    foreign workers with willing U.S. employers when no Americans can be
    found to fill the jobs. We look forward to working with Congress to
    develop legislation that incorporates the best ideas for the American
    worker and our foreign visitors. Through the principles outlined by the
    President, the best course to the end goal of opportunity, security,
    safety, compassion, jobs and growth can be achieved.
        Question. President Bush has promised to reduce the average wait
    time for applicants for immigration benefits to 6 months by 2006. In
    light of that goal, and the increased burden the President would place
    on the CIS through the guest worker program, why does the President's
    budget not seek any directly appropriated funds for backlog reduction?
        Answer. As answered above, the President is seeking in the fiscal
    year 2005 budget a 60 percent increase in the total funds towards
    backlog reduction efforts, from $100 to $160 million, including $140
    million in appropriated funds. CIS will meet the President's goals no
    later than 2006. CIS does not believe that the President's Temporary
    Worker Proposal will impact the backlog.

                            CRITICAL INFRASTRUCTURE

        Question. DHS published a proposed rule on critical infrastructure
    information, or CII, on April 15, 2003. What is the current status of
    the CII rule?
        Answer. The Interim Final Rule establishing the regulations (6 CFR
    29) to implement the CII Act of 2002 were published in the Federal
    Register for immediate implementation on February 20, 2004. Has DHS
    received CII submissions from corporations? If so, how many? How is DHS
    handling such information?
        Answer. We have not received any submissions under the Interim
    Final Rule as of March 1, 2004.
        Question. Despite the lack of a final rule on the handling of CII,
    are submissions effectively restricted from public disclosure and from
    transmittal to other Federal agencies?
        Answer. The Interim Final Rule has been published and submissions
    meeting all the requirements of the Act and the implementing
    regulations (known as Protected Critical Infrastructure Information
    (PCII)) are exempt from release under the Freedom of Information Act.
    PCII may be shared with other Federal agencies engaged in critical
    infrastructure activities authorized under the CII Act and with State
    and local governments performing those activities that have signed
    agreements with DHS.
        Question. Secondly, as I understand it, DHS received numerous
    substantive comments on the proposed rule, including many submissions
    that raised concerns with the draft rule. If substantive changes are
    made, based either upon these comments or other reasons, will DHS issue
    a new proposed rule before finalizing this controversial provision?
        Answer. The Notice of Proposed Rulemaking was published for comment
    on April 20, 2003. A total of 117 comments were received. Based on
    these comments the draft regulation was revised and an Interim Final
    Rule was published for immediate implementation on February 20, 2004.
    DHS issued an Interim Final Rule to provide a framework necessary to
    receive voluntarily provided Critical Infrastructure Information and
    protect it from public disclosure, while allowing the Department to
    adapt as program operations evolve. The Department has asked for
    additional comments on the Interim Final Rule by May 20, 2004. These
    comments will help DHS determine whether possible supplemental
    regulations are needed as experience is gained in implementing the CII
    Act of 2002.
                                     ______

                   Questions Submitted by Senator Tom Harkin

        Question. I have heard from the Iowa State Secretary of Agriculture
    that the Department of Homeland Security is no longer funding certain
    veterinary positions assigned to monitoring for animal diseases that
    USDA used to fund before the funding stream was switched to the
    Department of Homeland Security. As the recent case of a BSE-positive
    cow in Washington showed, our State Departments of Agriculture are our
    front lines of defense against animal diseases, whether intentionally
    or naturally caused, and our veterinarians are our calvary. These
    positions, which were funded through a USDA grant program, provide
    States with essential animal disease preparedness and response
    capability. Many of the postions funded through the program are
    essential to states bioterrorism planning and response efforts as well.
        Why did your department cease funding for these positions when the
    authority for the program was switched as part of the Homeland Security
    Act? How are States supposed to make up for the loss in animal disease
    monitoring capabilities? Are you considering reinstating the program?
        Answer. The U.S. Department of Agriculture (USDA) is responsible
    for the monitoring for animal diseases. The Department of Homeland
    Security (DHS) is responsible for conducting document verifications of
    certain restricted meats and for ensuring compliance with entry
    requirements for animals and animal by-products set by USDA. USDA
    retained authority for the animal disease-monitoring program and
    veterinary positions referred to in the question. DHS has no
    involvement in the funding of these positions. This question would be
    best directed to USDA.
        Question. The Emergency Management Grant Program (EMPG) was
    transferred with FEMA to the Department of Homeland Security. It is the
    grant program that funds the basic emergency management functions of
    State and government. This is the money Ellen Gordon and her team use
    to prepare for hurricanes, floods, hazardous materials spills,
    accidents, or any other kind of disaster.
        When EMPG was moved to DHS, the Bush Administration tried to merge
    it into the new terrorism First Responder grant program. States argued
    to keep it separate because they did not want their broad emergency
    response functions shifting to a terrorism-only focus. Congress agreed
    and the program has been kept separate--and has been fully funded.
        In his fiscal year 2005 budget request, Bush proposes to cut it by
    5 percent--but, more importantly, to cap personnel costs at 25 percent
    of the grant award.
        If that were to be endorsed by the Congress, Iowa would lose one-
    third of our entire emergency management function and our local
    governments would lost between 20-30 percent of their staff.
        Exercises planned would have to be canceled. The critical
    coordination between our traditional emergency management planning and
    our post-9/11 planning would be severely impacted. This is not the time
    to be cutting staff in this area.
        I am very concerned with the requirement in the budget request that
    only a certain percentage of the Emergency Management Performance Grant
    program can be used to pay for personnel. As you know, this is the
    program which undergirds our very critical need to be prepared for any
    kind of disaster, whether terrorism, floods, hurricanes, earthquakes,
    etc. While it is never popular to pay for the services of staff, these
    staff do the work of coordinating our response plans and their work is
    very, very critical to us (particularly as the terrorism grants are
    threatening to shift to urban areas). Can you tell me the rationale
    behind this change and how you believe it will impact preparedness in
    our communities?
        Answer. The Administration's fiscal year 2005 request for the
    Emergency Management Planning Grants is $170 million, which is higher
    than any previous request for this program. The funds will be used to
    assist the development, maintenance, and improvement of State and local
    emergency management capabilities, specifically to build local capacity
    for homeland security needs.
        As you note, though, the request does cap the amount that states
    can use for salaries, thereby significantly increasing the amount of
    funds available for planning, training and exercises. The request
    shifts the emphasis to Federal support for planning while properly
    aligning responsibility for staffing and salaries with the states and
    local governments. The Administration and Department have consistently
    supported the idea that homeland security is a shared responsibility
    between Federal and State and local governments. Additionally, it is
    important to remember that we are operating in a fiscal and security
    environment where we must ensure maximum security benefits are derived
    from every security dollar. To do that, we must be able to take a new
    look at the way in which we allocate resources, including sharing
    financial responsibility with our State and local partners.
                                     ______

                    Questions Submitted by Senator Herb Kohl

                       DISASTER MEDICAL ASSISTANCE TEAMS

        Question. Disaster Medical Assistance Teams, or DMATs, can provide
    states with valuable extra capacity in the case of a disaster or
    terrorist attack. These volunteer teams act as important reserves
    without costing the taxpayers a great deal of money. However, neither
    Wisconsin nor our neighbor Illinois has a DMAT. This is especially
    troubling considering how many people live between Milwaukee and
    Chicago. The State of Wisconsin is behind the effort to create a new
    team, but I hear the Department of Homeland Security has put a stop to
    creating new teams because of some problems with current teams. If
    teams are not meeting requirements then eliminate those teams, but in
    areas without a team, Homeland Security needs to move forward. While
    the National Guard used to be an option when states faced a crisis,
    Guard Units may not be available now with the war in Iraq and
    Afghanistan.
        Don't these teams provide additional capability at a reasonable
    cost? Will the Department reconsider its moratorium on new Disaster
    Medical Assistance Teams?
        Answer. The Department of Homeland Security's (DHS') National
    Disaster Medical System (NDMS) has received a number of inquiries over
    the past year from communities wanting to start new Disaster Medical
    Assistance Teams (DMATs). DHS is pleased at the level of interest and
    enthusiasm supporting the Nation's capacity for health and medical
    response during times of disasters. Rather than adding teams at this
    time, DHS is focused on strengthening existing teams to enhance depth
    of membership and rapidness of response under the new national response
    plan and incident management system, as required in HSPD-5.
        The Department will consider the creation of new NDMS teams once it
    has reviewed the strategic capability and locations of the existing
    teams, and it has brought the teams to full operational capability.
        NDMS teams provide significant enhancement to a region's medical
    capacity. The costs of developing, supplying, training, and maintaining
    these teams are significant. The Department feels these costs are
    reasonable for the benefit provided by these emergency reserve medical
    assets.
        In the event of a public health emergency, the Milwaukee and
    Chicago region could be served by any of the 110 teams currently within
    the NDMS. This geographic area is within a 12-hour ground response
    radius for five existing Operational DMATs including MI-1, MO-1, OH-1,
    and OH-5. In addition, two Developmental DMAT teams (MN-1, KY-1)
    bordering this area could be used to support a response in the
    Milwaukee and Chicago area.
        During this moratorium, NDMS' recommendation to communities
    interested in developing DMATs has been to support NDMS teams already
    within their states or regions. While this is not always possible, many
    of these requests come from communities within states that already have
    DMATs. When the NDMS office makes such a recommendation, it also
    ensures that the existing DMAT leadership in the area is notified.
        There are other strategies for motivated communities besides the
    creation of DMATs. The Medical Reserve Corps through HHS' Office of the
    Surgeon General may be a model to help focus the community's motivation
    into developing a coordinated medical response asset. In addition,
    there are other volunteer organizations, such as the American Red Cross
    and National Voluntary Organizations Active in Disaster, that welcome
    the support of health care professionals.

                       SECURITY IN THE AGRICULTURE SECTOR

        Question. Secretary Ridge, the President has unveiled a new food
    and agriculture defense initiative. This new effort puts you in charge
    of organizing security with USDA and the FDA.
        I would like to hear your thoughts on how to coordinate these
    activities and how protection of food and agriculture rank in your
    overall perspective of homeland security threats. I ask this because
    you now have responsibility for the Plum Island animal disease
    laboratory in New York. Prior to last year, Plum Island was funded
    through the Agriculture Appropriations Subcommittee, where I am Ranking
    Member. As part of the President's fiscal year 2004 request, more than
    $6 million of USDA funding for research and diagnostic activities were
    transferred to your Department from USDA and agreements were supposed
    to be reached to reimburse USDA employees for that work. I understand
    those agreements have not yet been completed.
        Last year I expressed some concerns about transferring agricultural
    programs out of USDA. In fact, last May, when Secretary Veneman
    appeared before the Agriculture Subcommittee, I asked her about these
    transfers and she agreed that there was a concern among livestock
    producers that their priorities would not be reflected in programs
    conducted by your Department. She did say that USDA and DHS would work
    together to develop a research and diagnostics program to meet the
    needs of both Departments. In report language to accompany the fiscal
    year 2004 appropriations bill for your Department, you were instructed
    to report to the Congress by January 15th on a comprehensive strategy
    to combat agroterrorism.
        What is the status of that report, and how can you assure farmers
    and ranchers across America that your Department is better suited to
    combat agroterrorism than USDA? How do you intend to engage USDA in
    this strategy?
        Answer. DHS is committed to enhancing the Nation's agricultural
    security by complementing the mission of USDA as the sector-specific
    agency for agriculture [and USDA and the Food and Drug Administration
    (FDA) for food security] and bringing a new sense for urgency and
    investments to enhance the Nation's capability to anticipate, prevent,
    detect, respond to, and recover from the intentional introduction of
    foreign animal disease.
        The report requested by Congress, 'A National Strategy for
    Agricultural Biosecurity' builds on the strengths of each agency to
    develop comprehensive preparedness and response capabilities. USDA's
    Agricultural Research Service (ARS) will continue its basic research
    and early discovery work, USDA's Animal and Plant Health Inspection
    Service (APHIS) its diagnostics (including the Foreign Animal Disease
    Diagnostic Laboratory), while DHS will invest in advanced development
    research to expedite the transition of capabilities to operational end-
    users in USDA and DHS. DHS will also provide capability for certified
    forensics analysis in support of law enforcement.
        The report was drafted by a working group of senior officials and
    scientists from the respective agencies (DHS, USDA APHIS and ARS), with
    representation of key industry groups. The draft report is complete and
    is currently undergoing final interdepartmental reviews prior to
    transmittal to the House and Senate Appropriations Committees.
        This report and the DHS/USDA strategic partnership are executed in
    accordance with the Homeland Security Act of 2002; fiscal year 2004
    appropriations for DHS and USDA; as well as Homeland Security
    Presidential Directive/HSPD-9 ``Defense of United States Agriculture
    and Food'' and HSPD-7 ``Critical Infrastructure Identification,
    Prioritization, and Protection,'' both of which delineate the roles of
    sector-specific agencies.
        As part of DHS's extensive commitment to agricultural security, it
    is also establishing two University Homeland Security Centers (HS-
    Centers); one in foreign animal and zoonotic diseases, and one in post-
    harvest food security. These new HS-Centers were awarded in April 2004.
    Additionally, DHS is coordinating with USDA on a review team for high-
    consequence reference scenarios for strategic planning for DHS's
    programs and activities on biological and chemical countermeasures.
        Finally, the Homeland Security Act of 2002 transferred the
    facilities and liabilities' of the Plum Island Animal Disease Center to
    DHS from USDA. A working group of program staff and scientists from the
    two departments have worked closely on a variety of aspects of this new
    collaboration including enhancing the operations, facilities and
    security on the island, developing a joint R&D plan for foreign animal
    diseases which emphasizes foot-and-mouth disease and roadmaps for
    assays and diagnostics, and vaccines and anti-virals.
        Question. What is the status of completing an agreement with USDA
    for reimbursement for research and diagnostic work at Plum Island?
        Answer. The statement of work for reimbursement of research and
    diagnostic work at Plum Island Animal Disease Center for fiscal year
    2004 has been agreed to by DHS and USDA. The reimbursable agreement is
    currently being implemented at Plum Island Animal Disease Center.
        Question. The President's request for the Food and Agriculture
    Defense Initiative includes a $5 million item for research at DHS. What
    will be the focus of this research and where will it be conducted?
        Answer. As summarized above, one of the reference scenarios is
    focused on bulk food contamination and is based on one of a series of
    food vulnerability studies conducted by the Homeland Security Council
    (HSC) Interagency Food Working Group during fiscal year 2003-fiscal
    year 2004. These studies form the basis for the design and
    implementation of food shields' to protect critical central food
    processing nodes in the production system.
        DHS is currently funding an end-to-end systems study for the
    reference scenario on bulk food contamination, and this study will be
    followed in fiscal year 2005 by a design for a food sensor,' a
    requisite next step in the implementation of a food shield' based on
    requirements identified in the systems study. The food sensor funding
    is included in the President's fiscal year 2005 budget request.

                             INTELLIGENCE ANALYSIS

        Question. The Homeland Security Act established a Directorate of
    Information Analysis within the Department of Homeland Security. In
    July 2003 there were only 53 analysts and liaison officials within that
    Directorate, with plans to triple that number. President Bush has since
    created the Terrorist Threat Integration Center (TTIC--pronounced ``T-
    Tick''), which includes the CIA's Counterterrorist Center (CTC) and the
    FBI's Counterterrorism Division. This did not relieve DHS of its
    intelligence analysis responsibilities, but TTIC's assigned
    responsibilities are very similar to those of DHS.
        In your opinion, does the creation of multiple organizations to
    analyze terrorist-related intelligence thwart the initial goal of the
    Department of Homeland Security, that is to centralize this function
    and facilitate cooperation and information sharing among the various
    intelligence related agencies? If not, what is being done to preserve
    this goal that is not immediately apparent from the fractured structure
    of these functions? Would it be better to consolidate these functions
    in one place, either within DHS or within the CIA in the form of TTIC?
        Answer. The Department of Homeland Security, as stated in the
    Homeland Security Act, is singularly focused on the protection of the
    American homeland. DHS/IAIP independently analyzes threat-related
    information it receives from the entire Intelligence Community, other
    DHS entities, and the Terrorist Threat Integration Center and issues
    warning products to State and local officials and the private sector
    after matching terrorist threats and capabilities with our Nation's
    vulnerabilities.
        In contrast, the TTIC is responsible for the analysis of all
    international terrorism threat information, whether collected
    domestically or abroad. TTIC uses this information to create an overall
    threat picture and to issue reports to the appropriate IC members.
    Accordingly, the TTIC is vital to serve the entire Intelligence
    Community. While TTIC is an essential resource upon which DHS relies to
    complete its mission, they are also integral to completing the mission
    of other entities within the Intelligence Community.

                    EMERGENCY MANAGEMENT PERFORMANCE GRANTS

        Question. I am also concerned about the Administrations cuts and
    policy changes to the Emergency Management Performance Grants. Not only
    is there $9 million less than last year, but the $170 million that is
    included in the President's budget will no longer fund all hazard
    planning. This is a real disappointment for county emergency managers
    in my state. They used these funds to help them prepare for terrorist
    attacks as well as natural disasters like floods and tornados. A
    reduction in funding, especially when adjusted for inflation, could
    force some counties to reduce staff as well as leave them unprepared
    for non-terrorism catastrophes.
        Why did the Administration reduce these funds, and why did they
    prohibit these funds from being used for all hazard planning?
        Answer. The Administration's fiscal year 2005 request for the
    Emergency Management Planning Grants is $170 million, which is higher
    than any previous request for this program. The funds will be used to
    assist the development, maintenance, and improvement of State and local
    emergency management capabilities, with the specific goal of building
    capabilities for homeland security needs.
        As you note, though, the request does cap the amount that states
    can use for salaries, thereby significantly increasing the amount of
    funds available for planning, training and exercises. The request
    shifts the emphasis to Federal support for planning while properly
    aligning responsibility for staffing and salaries with the states and
    local governments. The Administration and Department have consistently
    supported the idea that homeland security is a shared responsibility
    between Federal and State and local governments. Additionally, it is
    important to remember that we are operating in a fiscal and security
    environment where we must ensure maximum security benefits are derived
    from every security dollar. To do that, we must be able to take a new
    look at the way in which we allocate resources, including sharing
    financial responsibility with our State and local partners.

                              FLIGHT CANCELLATIONS

        Question. Most of the flights stopped were from British Airways and
    Air France, but every day airlines based in more volatile regions land
    in this country. We never hear about planes from Morocco or Pakistan
    not being allowed to land. Are airlines that fly from the Middle East
    and Africa somehow safer than those that fly from Paris and London?
        Answer. Flight cancellations during the holiday period were based
    upon specific intelligence that warranted such action. Appropriate
    information was shared with our foreign counterparts and foreign air
    carriers, which sometimes led to their decisions to cancel flights and/
    or implement enhanced security measures. These actions were not
    necessarily tied to the Nations from which the flights originated. In
    principle and practice, DHS does not recommend or take security actions
    based solely upon the origin or destination of a flight independent of
    specific information that may pertain to that location.
        Question. Are the cancellations a result of limited intelligence
    cooperation between the United States, Britain and France making it
    harder to determine who is on these planes? Or is the problem exactly
    the opposite, we are getting good information about European flights,
    but it is difficult to figure out if a threat is flying on a plane from
    Islamabad?
        Answer. As I indicated above, flight cancellations over the holiday
    period were based on specific intelligence that warranted such action,
    and were examples of good intelligence cooperation. The cancellation of
    these particular flights is unrelated to the question of how robust our
    capacity is to assess the security of flights originating in other
    parts of the world.
        Question. Are flights out of these major airports more attractive
    to terrorists than flying from Karachi or Rabat? Is there something our
    European allies are NOT doing that makes these good targets, or do we
    just not have a good way of monitoring what might be going on in other
    countries?
        Answer. These cancellations were not based on an assessment of
    security practices at European airports, which are generally fully
    compliant with ICAO standards and deemed to be of high quality. Again,
    during the holiday period, DHS received specific information and shared
    it appropriately with French and British allies, resulting in decisions
    being made to cancel these flights. DHS and our European allies
    continue to work in close collaboration to share best practices and
    enhance aviation security.
                                     ______

                  Questions Submitted by Senator Patty Murray

        Question. Mr. Secretary, I agree that CSI and C-TPAT are important
    pieces of our cargo security system but they aren't going to do the job
    alone. In fact, they have significant issues that would benefit from
    Operation Safe Commerce moving forward.
        You may be aware of a recent GAO study entitled, ``Preliminary
    Observations on Efforts to Target Security Inspections of Cargo
    Containers.''
        This report is clearly critical of the lack of methodology
    incorporated in these Customs and Border Protection initiatives.
        The report states that--quote--``while CBP's strategy incorporates
    some elements of risk management, it does not include other key
    elements, such as a comprehensive set of assessments that experts told
    GAO are necessary to determine risk and the types of responses
    necessary to mitigate that risk.''
        The report says ``CBP's targeting system does not include a number
    of recognized modeling practices, such as subjecting the system to peer
    review, testing and validation.''
        The report goes on further to say that--quote--``CBP does not have
    a national system for reporting and analyzing inspection statistics and
    the data provided to us by ports were generally not available by risk
    level, were not uniformly reported, were difficult to interpret, and
    were incomplete.''
        Mr. Secretary, for the sake of our Nation's security it is
    imperative that we are able to learn from all of our port security
    programs.
        We must tie them together and rapidly institute a large-scale,
    operational cargo security program in the United States. And, for the
    sake of our economy, we must get this right.
        What are your reactions to this report?
        Answer. In general, GAO's report ``Challenges Remain in the
    Targeting of Oceangoing Cargo Containers for Inspection,'' is
    constructive, and CBP will be initiating several corrective actions in
    fiscal year 2005 to address issues identified by GAO. However, GAO's
    assertion that CBP does not ``incorporate all key elements of a risk
    management framework and recognized modeling practices'' is not
    accurate. Although CBP characterizes its approach to risk management
    for terrorism as a ``layered approach,'' the fundamental components of
    this approach can also be characterized within GAO's risk management
    framework. The following provides a brief discussion of the
    relationships between the Automated Targeting System (ATS) and several
    CBP initiatives within GAO's risk management framework to demonstrate
    the fulfillment of the framework's key elements.
        The key elements of GAO's Risk Management Framework are:
      --Threat Assessment
      --Criticality Assessment
      --Vulnerability Assessment
      --Risk Assessment
      --Risk Characterization
      --Risk Mitigation
      --Monitoring and Evaluation
      --Repetition of the Risk Management Process
    CBP and GAO's Risk Management Framework
      --Threat (event) Assessment.--CBP utilizes incoming intelligence from
            various sources that include the U.S. Intelligence community to
            identify threats. These threats include general assessments as
            discussed in GAO's report (e.g. vulnerability of supply chains
            and containerized cargo) as well as classified, specific
            threats regarding individuals. Collection of these threat
            assessments is an ongoing activity. Also, targeting is
            integrated into CBP's Treasury Enforcement Communication System
            (TECS) enforcement database to ensure that specific
            intelligence is integrated with targeting activity. Also,
            incoming intelligence is evaluated by the National Targeting
            Center to develop targeting strategies appropriate to the risk.
            Responses to certain threats may be expanded to include
            additional targeting rules for ATS, lookouts, and/or cargo
            targeting criteria.
      --Criticality Assessment.--As GAO indicates, criticality assessments
            ``help provide a basis for prioritizing protection relative to
            limited resources'' for a critical asset. With respect to
            ``national security, economic activity, and public safety''
            this critical asset is the flow of trade in both a free and
            secure manner. This goal is fundamental to CBP's operations.
            CBP cannot inspect all cargo coming into the United States;
            however, the organization can and does prioritize shipments by
            risk and does inspect all high-risk cargo (mandatory
            inspections through threshold targeting) coming into the United
            States. While ATS provides a system for prioritizing and
            targeting high-risk cargo through transactional targeting
            rules, C-TPAT provides a programmatic mechanism for identifying
            relatively low risk supply chains and allows CBP to direct
            resources to other higher-risk entities.
      --Vulnerability Assessment.--As indicated in GAO's report, there has
            been extensive work regarding vulnerability assessments
            concerning maritime assets (specifically containerized cargo),
            and other agencies that contributed to this work include the
            FBI, CIA, academic, think tank and business organizations. As
            discussed extensively with GAO, CBP's layered approach to this
            vulnerability includes initiatives such as C-TPAT, Non-
            Intrusive Inspection Technology (NII), Container Security
            Initiative (CSI), and ATS targeting.
      --Risk Assessment.--GAO defines risk assessments to ``include
            scenarios under which two or more risks interact creating
            greater or lesser impacts; they also include the filtering and
            ranking or prioritization of risky events.'' Where an ``event''
            can be a shipment, ATS utilizes a battery of rules to vet and
            prioritize the shipment transactions by scoring the different
            variables of each transaction and ranking/prioritizing the
            transactions by total scores for each transaction. To the
            extent that risk assessments might also be in the form of
            intelligence reports, this information is also integrated into
            targeting through the development of specific rules, lookouts,
            cargo criteria, TECS records, and the performance of targeting
            ``sweeps'' by the National Targeting Center when warranted.
      --Risk Characterization.--GAO defines risk characterization as
            ``designating risk on a scale, for example low, medium, or
            high.'' As defined, risk characterization is inherent to the
            ATS targeting program as a decision support tool that generates
            risk scores to prioritize cargo for inspection.
      --Risk Mitigation.--GAO indicates that risk mitigation may involve
            risk acceptance, risk avoidance, risk reduction, and risk
            sharing. In terms of risk acceptance (taking no action) and
            risk sharing, CBP minimizes inspections through the C-TPAT
            Program. A certain level of risk acceptance is also inherent to
            targeting higher risk cargo for inspection and not inspecting
            lower risk cargo. In terms of risk avoidance (taking action to
            avoid activities that involve risk), CBP increases inspections
            through the use of NII (e.g. x-rays and radiation pagers)
            instead of increasing time consuming physical exams that would
            limit the number of shipments that can be inspected and
            increase vulnerabilities.
          CBP is also actively engaged in activities identified by GAO's
            systems approach to risk mitigation: personnel (e.g. training),
            processes, technology, infrastructure, and governance. ATS
            training classes are being implemented on an ongoing basis (Sea
            Cargo) and with the deployment of new ATS threshold targeting
            rule sets (e.g. Northern Border Truck, Southern Border Truck,
            and Rail). The Manifest Review Unit (MRU) Handbook will be
            updated in fiscal year 2005 to address process and governance
            issues. For technology, the additional development of software
            and acquisition of hardware upgrades is ongoing. For
            infrastructure, certain ports analyze their local flow of
            traffic for improved efficiency and some are receiving upgrades
            to physical examination resources.
      --Monitoring and Evaluation.--A key element to CBP's ability to
            monitor and evaluate the performance of targeting will be the
            ability to accurately capture findings. As GAO pointed out, CBP
            is hampered by non-integrated sub-systems for recording
            findings. The full implementation of the ATS findings module
            will provide CBP with a single place for recording the
            findings, increase the accuracy of the findings, and facilitate
            reporting, monitoring and evaluation.
          With respect to peer review, CBP is actively working with other
            Government agencies such as FDA and USDA as well as foreign
            government agencies such as the Canadian Customs and Revenue
            Administration (CCRA) to further develop targeting concepts.
            CBP hopes to expand on these collaborative efforts in fiscal
            year 2005. With respect to testing and validation, CBP will
            also be conducting internal security exercises that test our
            layered enforcement in fiscal year 2005.
      --Repetition of the Risk Management Process.--The activities
            previously described are ongoing and fulfill the ``loop'' of
            assessments, mitigation, and monitoring and evaluation.
        In conclusion, while CBP can always do a better job of fulfilling
    and expanding upon all of the key elements of the risk management
    framework described by GAO, CBP does actively engage in activities that
    fulfill these key elements.

    CBP and GAO's Modeling Practices
        The following provides a brief discussion of CBP's initiatives in
    terms of the issues identified with respect to ATS development and
    ``recognized modeling practices.''
      --Conducting external peer review.--As indicated earlier in this
            document, CBP is actively working with other Government
            agencies such as FDA and USDA as well as foreign government
            agencies such as the Canadian Customs and Revenue
            Administration (CCRA) to further develop targeting concepts.
            CBP hopes to expand these collaborative efforts in fiscal year
            2005.
      --Incorporating additional types of information.--CBP agrees with the
            premise that ``linkages'' to other sources of information can
            enhance targeting. Linkages between manifest and entry
            information to TECS records represents such an effort.
            Recently, FDA information was integrated into CBP's ATS system,
            and CBP is actively working with USDA to integrate some of
            their data into ATS. Other large, commercial sources of
            information such as Dun and Bradstreet (D&B) are also being
            explored but will require a lengthy cost-benefit analysis,
            proof of concept, and significant budget procurement. Another
            effort involves the procurement of container tracking
            information.
      --Testing and validating through simulated terrorist events.--As
            discussed with GAO, ABC News did conduct their own ``test'' of
            importing a shipment of radioactive material, and ATS did
            successfully target this shipment for mandatory inspection. CBP
            will be conducting its own ``red team'' simulations in fiscal
            year 2005.
      --Using random inspections to supplement targeting.--As discussed
            earlier, the stratified random sample of CBP's Compliance
            Measurement Program will be utilized to further evaluate the
            performance of the ATS targeting.

                             DATA INTEGRITY ISSUES

        Question. The GAO Report also made the following conclusion: ``CBP
    does not have a national system for reporting and analyzing inspection
    statistics and the data provided to us by ports were generally not
    available by risk level, were not uniformly reported, were difficult to
    interpret, and were incomplete''.
        Currently, CBP has a number of non-integrated subsystems through
    which it reports its examination findings. CBP's effort to ensure data
    consistency for reporting purposes and analysis is hampered by these
    multiple subsystems and CBP is addressing this issue through the
    implementation of a ``Findings Module'' within its Automated Targeting
    System. This module, which will be completed in fiscal year 2004, will
    provide CBP with a single place for recording and retrieving its
    examination findings, which will increase the accuracy of those
    findings and facilitate CBP's reporting, monitoring and evaluation
    activities.
        Please explain why the Administration would abandon Operation Safe
    Commerce--a program specifically designed to test various cargo-
    security techniques, and the analysis associated with them, to create a
    true container security program for our country?
        Answer. The President's fiscal year 2005 budget request for DHS
    includes $1.9 billion for port security activities, including $126
    million for the Container Security Initiative (CSI). The funding for
    this initiative, which is $25 million more than the fiscal year 2004
    level of funding, focuses on pre-screening cargo before it enters the
    United States. The first phase of CSI focused on implementing the
    program at the top 20 foreign ports, which ship approximately two-
    thirds of the containers to the United States. Phase II expands the
    program to additional ports based on volume, location, and strategic
    concerns. Phase III further increases security at the highest risk
    ports.
        The President's fiscal year 2005 budget request also includes $50
    million for the development of the next generation of screening
    devices, which can be used at the Nation's port facilities.
    Additionally, the budget request includes $64.2 million to enhance
    land-based detection and monitoring activities between ports. Further,
    the budget request includes $46 million for port security grants to be
    administered by the Office for Domestic Preparedness and more than $1.4
    billion for the Urban Areas Security Initiative (UASI). The UASI
    program, among other things, can be used to support security
    enhancements at our Nation's port facilities.
        The Department firmly believes that these resources will allow us
    to properly and effectively enhance security at our Nation's port
    facilities.
      --Operation Safe Commerce.--A program specifically designed to test
            various cargo-security techniques, and the analysis associated
            with them, to create a true container security program for our
            country.
        DHS is not abandoning Operation Safe Commerce. As you know, OSC is
    a collaborative pilot effort between the Federal Government, the three
    largest U.S. container load centers (Los Angeles/Long Beach, Seattle/
    Tacoma, and New York/New Jersey), private industry, and the maritime
    community, to develop and share best practices for the secure and
    expeditious movement of containerized cargo. OSC's goal is to serve as
    a test bed to examine methods to increase supply chain security,
    protect the global supply chain, and facilitate the flow of commerce.
    The Administration continues to administer OSC in fiscal year 2004 as a
    multi-agency program with participants from the Departments of Homeland
    Security, Transportation, State, Commerce, and Justice. An Executive
    Steering Committee (ESC) was formed to provide guidance for OSC. The
    ESC is co-chaired by the Transportation Security Administration, Bureau
    of Customs and Border Protection, and the Department of Transportation.
        Congress has provided $75 million for this program over a 2-year
    period to conduct three very robust and comprehensive pilots at the
    selected locations. The expected test period is 1 year. At this point
    in time, Seattle/Tacoma has progressed furthest. There, the first
    container shipment tracked by the program is expected to arrive by the
    end of March 2004. First arrivals are expected in April 2004, for the
    Port of New York/New Jersey and in June 2004, for the Port of Los
    Angeles/Long Beach. As we complete each of the pilots, we will
    ascertain the lessons learned and whether program elements are
    applicable to ports across the country. We are hopeful that any
    positive results of OSC will eventually be adopted by ports, cargo
    companies and, where appropriate, incorporated into both existing and
    future cargo security efforts by DHS and international governments.

                              SUBCOMMITTEE RECESS

        Senator Cochran. Our next hearing on the budget request for
    the Department of Homeland Security will be held on Thursday,
    February 26, in room 124 of the Dirksen Senate Office Building.
    At that time, the Under Secretary for Emergency Preparedness
    and Response, Mr. Michael Brown, will be here to discuss the
    budget for the programs under his jurisdiction.
        Until then, the subcommittee stands in recess.
        [Whereupon, at 12:40 p.m., Tuesday, February 10, the
    subcommittee was recessed, to reconvene at 10 a.m., Thursday,
    February 26.]

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                          THURSDAY, FEBRUARY 26, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:20 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Thad Cochran, (chairman)
    presiding.
        Present: Senators Cochran, Specter, Byrd, and Murray.

                        DEPARTMENT OF HOMELAND SECURITY

     Office of the Under Secretary for Emergency Preparedness and Response

    STATEMENT OF MICHAEL D. BROWN, UNDER SECRETARY,
                EMERGENCY PREPAREDNESS AND RESPONSE
                DIRECTORATE

                   OPENING STATEMENT OF SENATOR ARLEN SPECTER

        Senator Specter [presiding]. Good morning, ladies and
    gentlemen.
        I was attending a Judiciary Committee executive session
    upstairs where we are trying to move forward on the
    confirmation of many judges, when I heard that this hearing
    lacked a Republican. It should not be too hard to find a
    Republican in the Senate complex on a Thursday morning. And
    then I received a summons from Senator Byrd. Now, a summons
    from Senator Byrd is not quite like a subpoena.
        But it is close. And you know what happens when you do not
    respond to a subpoena. There is a bench warrant, and that could
    be very serious. So, I left the Judiciary Committee exec room
    to convene this hearing. I am going to have to return shortly.
        Today this subcommittee will continue the review of the
    fiscal year 2005 budget request for the Department of Homeland
    Security. We are pleased to welcome the Under Secretary of the
    Emergency Preparedness and Response Directorate, Mr. Mike
    Brown. We will review this year's budget request and work with
    you, Mr. Brown.

                               PREPARED STATEMENT

        Homeland security is obviously a top priority for this
    country, reflected in the President's budget request for an
    increase of 9.7 percent, whereas the discretionary funding got
    only a half of 1 percent, defense some 7 percent.
        Without objection, the full statement, which had been
    prepared for Senator Cochran will be included in the record,
    and we now turn to your testimony.
        [The statement follows:]

                   Prepared Statement of Senator Thad Cochran

        The hearing will come to order.
        Today we continue our review of the fiscal year 2005 budget request
    for the Department of Homeland Security.
        I am pleased to welcome to this hearing the Under Secretary of the
    Emergency Preparedness and Response Directorate, Mike Brown.
        Our Committee will work hard to provide the funds this Directorate
    needs to carry out its responsibilities and perform its mission
    successfully.
        We thank you for submitting a copy of your statement in advance of
    this hearing. It will be made a part of the record, and we invite you
    to make any comments you think would be helpful to the committee's
    understanding of the budget request.
        Now, I will yield to Senator Byrd and other Sentors who may wish to
    make opening statements.

        Senator Specter. Excuse me. The custom is to call on the
    ranking member, the ranking member of the full committee,
    former President Pro Tempore, chairman of the full committee,
    and so many titles. If I went through them, you would not have
    any time left, Mr. Brown.
        Senator Byrd.

                      STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you. America has done some great
    things. It put a man on the moon, brought him back to earth
    safely again, but it has never been able to produce a truly
    good loudspeaker system.
        I appreciate your kind remarks about me. Plato thanked the
    gods for having been born a man, for having been born a Greek,
    and for having lived in the age of Socrates. I thank the gods
    for permitting me to live in the same age and serve at the same
    time in the United States Senate with a chairman and also a
    Pennsylvania Senator on this committee who presided over this
    committee with such dignity and skill. I thank Senator Specter
    for his remarks.
        Mr. Chairman, the Senator from Pennsylvania had turned to
    me for a statement. May I proceed?
        Senator Cochran [presiding]. Please.
        Senator Byrd. Welcome, Mr. Brown. No relation to Jimmy
    Brown, the newsboy of this town, but a good man nevertheless.
        In April of last year, when you testified before this
    subcommittee, I asked you how Congress could be sure that the
    agencies merged into the new Department of Homeland Security
    with specific missions unrelated to homeland security, such as
    preventing and responding to natural disasters, would have the
    resources to accomplish their missions. In your response, you
    assured the committee that FEMA would continue--and I quote--
    ``to protect our Nation's institutions from all types of
    hazards through a comprehensive, risk-based, all-hazards
    approach.''

                         ALL-HAZARDS EMERGENCY PLANNING

        In your written testimony today, you stress a continued
    commitment to all-hazards emergency planning, but frankly, as I
    see it, the President's policies ignore that commitment. I will
    repeat that again. As I see it, the President's policies ignore
    that commitment.
        States and local communities look to FEMA to provide the
    resources and expertise that they need to meet a wide range of
    challenges. Today, possibly more than ever before, our States
    and local communities have to be ready to cope with disasters
    such as floods, earthquakes, chemical incidents, disease in our
    food supply, and other public health emergencies. Given the
    events of 9/11, States and communities must also prepare for
    preventing or responding to terrorist attack. And this is why a
    focus on all-hazards preparedness is so important.
        However, rather than embrace the all-hazards approach to
    emergency planning, the President's budget undermines it.
    Rather than develop the capacity to respond to a terrorist
    attack within the framework of all-hazards planning, the
    President's budget, in essence, mandates that State and local
    governments give priority to anti-terrorism programs at the
    expense of other potential disasters.

    TRANSFER OF SEVERAL ALL-HAZARDS PROGRAMS FROM FEMA INTO A NEW OFFICE OF
            STATE AND LOCAL GOVERNMENT COORDINATION AND PREPAREDNESS

        The Administration proposes to transfer several all-hazards
    programs out of FEMA and into a new Office of State and Local
    Government Coordination and Preparedness. That office's
    mandate, as laid out in the Homeland Security Act, is to help
    State and local governments effectively combat terrorism.
        Under the consolidation proposal announced by the Secretary
    on January 26, 2004, and under the President's budget proposal
    for fiscal year 2005, emergency management performance grants,
    community emergency response team grants, and the metropolitan
    medical response system will all be shifted into this newly
    expanded office. And yet, this new office does not have the
    expertise or the regional staff experienced in all-hazards
    planning. FEMA has that expertise.
        Yesterday I joined with Representative Martin Sabo, the
    ranking member of the House Appropriations Homeland Security
    Subcommittee, in sending a letter to Secretary Ridge urging him
    not to proceed with the reorganization of the emergency
    management performance grants and community emergency response
    team programs, along with several Transportation Security
    Administration programs.

                      PROPOSED CUTS TO FIRE GRANTS FUNDING

        Furthermore, the administration proposes to cut funding for
    fire grants by $246 million and emergency management
    performance grants by $9 million and, at the same time, mandate
    that States give priority to terrorism preparedness. This is a
    squeeze play that States cannot afford.
        I will give you a rhetorical question at this point. Where
    do these policies leave a small town fire department in West
    Virginia or Mississippi, or other rural States, that needs to
    purchase breathing apparatus or equipment to deal with a
    chemical spill? We have one of the largest chemical complexes
    in this country, in the Western Hemisphere as a matter of fact,
    in the Kanawha Valley. So this comes home to us in West
    Virginia.

    PROPOSAL TO LIMIT THE AMOUNT OF EMERGENCY MANAGEMENT FUNDS THAT CAN BE
                               SPENT ON SALARIES

        The President also proposes to limit the amount of
    emergency management funds that can be spent on salaries. This
    provision would drive a stake through the heart of State and
    local all-hazards planning efforts.

                           TERRORIST ATTACK CONCERNS

        I am as concerned as anyone about the possibility of future
    terrorist attacks, but I am also greatly concerned that
    preparing for such an attack will come at the expense of
    preparing for other types of disasters if this administration's
    budget proposal is enacted.
        There are elements in the budget request that are
    praiseworthy. The Administration is again requesting $200
    million for the flood map modernization initiative. This
    initiative is so important to flood-prone States such as West
    Virginia. I am also pleased to see an adequate and timely
    budget request for the disaster relief fund. Last year we came
    very close to running out of money in the disaster relief fund
    and nobody--not even OMB it seems--wants to go through that
    again this year.
        Also, the Administration's budget recognizes the importance
    of pre-disaster and post-disaster mitigation funds. Post-
    disaster mitigation funds help communities pay for mitigation
    activities right after a disaster occurs, when communities have
    the will and the momentum to complete such projects. I hope we
    can do even more post-disaster mitigation in the future.
        West Virginia endured four Federally declared disasters
    last year. No State is more grateful for, and no State is more
    in need of, FEMA's programs and expertise than West Virginia.
    And I want to compliment you on the excellent work that you and
    your staff have done. You have not failed us in West Virginia
    where we are very keenly aware of and live often with disasters
    that are not manmade.
        So, I look forward to hearing your testimony, Mr. Under
    Secretary, and to working with you to preserve FEMA's all-
    hazards planning programs.
        And I thank you, Mr. Chairman, for your patience and
    kindness.
        Mr. Brown. Thank you, Senator.
        Senator Cochran. Thank you, Senator Byrd.
        Senator Murray.

                       STATEMENT OF SENATOR PATTY MURRAY

        Senator Murray. Thank you, Mr. Chairman.
        Thank you so much. I join my colleagues in welcoming you
    here today. You have a tremendous task before you and I thank
    you for your service.

                            FIRST RESPONDER FUNDING

        My colleague, Senator Byrd, discussed the more visible
    issues regarding first responder funding. I too am very
    concerned about the proposal to shift the homeland security
    grants into the Office of Domestic Preparedness. Streamlining
    these programs is a key element to ensure our local communities
    get the needed resources in a timely manner, but the programs
    that are traditionally supported by TSA and FEMA I do not
    believe should be forced to compete with our first responders
    for funding.
        I am also really concerned that the President's budget
    request cuts State grants for first responders by $990 million.
    It cuts training for first responders by $103 million and
    eliminates the COPS program. That is almost $2 billion in cuts
    for first responders nationwide at a time when our State and
    local budgets just do not have the capacity to absorb those
    additional costs. So, I am very concerned about that. I am
    confident that Congress will prevent this administration from
    decimating those essential first responder programs and I want
    my colleagues to know that I will work with them to restore
    that.
        I do have a number of questions for you and I will wait for
    my time. But thank you very much, Mr. Chairman, for this
    hearing.
        Senator Cochran. Thank you, Senator.
        Mr. Brown, we have a copy of your statement which we
    appreciate very much your submitting to the committee in
    advance of the hearing. It will be made a part of the record in
    full. We encourage you to make whatever comments you would like
    to make in support of the budget request that will be helpful
    to our understanding of the request. You may proceed.

                         STATEMENT OF MICHAEL D. BROWN

        Mr. Brown. Well, thank you very much, Mr. Chairman, and
    Senator Byrd, thank you for your kind comments, and Senator
    Murray, you also.
        My name is Michael Brown. I am the Under Secretary for
    Emergency Preparedness and Response of the Department of
    Homeland Security. I am, indeed, honored to appear before you
    today to talk about FEMA's accomplishments over the past year
    since we became a part of the Department of Homeland Security.
    But more importantly, I want to highlight some of our
    priorities for fiscal year 2004 and discuss why support of the
    President's budget request for 2005 is critical to ensure that
    FEMA can continue to fulfill its traditional mission.
        FEMA has undergone changes since becoming a part of
    Homeland Security, both externally and internally, but we have
    not changed our focus. As part of the Homeland Security
    Department, FEMA has continued the tradition of responding to
    help disaster victims and those in need wherever disaster or
    emergencies strike.
        On March 1, FEMA will celebrate its first full year as a
    part of the Department of Homeland Security. We are proud to be
    part of this historic effort and are more committed than ever
    to do our duty as defenders of the homeland. We believe that
    the Federal-wide consolidation of all-hazards preparedness,
    mitigation, response, and recovery programs brings real benefit
    to the American public.

                        FISCAL YEAR 2003 ACCOMPLISHMENTS

        In fiscal year 2003, FEMA responded to 62 major disasters
    and 19 emergencies, covering 35 States, 4 U.S. territories, and
    the District of Columbia. These disasters included the record
    number of tornadoes in the Midwest, the unfortunate loss of the
    Space Shuttle Columbia, Hurricane Isabel, and the absolutely
    devastating wildfires in California. In fiscal year 2003, FEMA
    obligated nearly $2.9 billion in fiscal year 2003 disaster
    funds to aid people, victims and communities that were
    overwhelmed by these disasters.

                             FISCAL YEAR 2004 PLANS

        In fiscal year 2004, FEMA is focusing on our five major
    program areas: mitigation, preparedness, response, recovery,
    and national security.
        Our mitigation efforts center on modernizing our Nation's
    flood maps, providing pre-disaster mitigation grants and
    enhancing the national flood insurance program.
        In the Preparedness Division, we will support the
    Department's efforts to put into place a national incident
    management system that will help improve coordination of
    disaster response at all levels, and we will also publish
    mutual aid system development, credentialing, and equipment
    interoperability standards.
        In 2004, our response capabilities continue to grow as we
    field enhanced response teams and resources, improve our
    response times, put into place plans for catastrophic events,
    and improve our training. For those impacted by disasters, FEMA
    continues to provide appropriate and effective disaster
    recovery assistance.
        Finally, we are ensuring that the FEMA national security
    program has adequately staffed, trained, equipped, and
    exercised the continuity of operations and the continuity of
    Government programs.

                        FISCAL YEAR 2005 BUDGET REQUEST

        Looking ahead to fiscal year 2005, the President's budget
    request is critical to ensuring that FEMA can continue to
    fulfill its traditional mission. The President's budget again
    requests $150 million for the pre-disaster mitigation program
    to help minimize the devastation caused by natural disasters.
        The budget also requests $200 million to continue the
    replacement and modernization of the Nation's flood insurance
    rate maps, and includes $7 million in new budget authority for
    the development and implementation of the national incident
    management system as part of the national response plan. These
    two initiatives will ensure that all levels of government
    across the Nation are prepared to work together efficiently and
    effectively employing a single national approach to domestic
    incident management.
        The President's budget request includes $8 million in new
    budget authority for four incident management teams to act as
    the core field level response management teams for major
    disasters, emergencies, and acts of terrorism.
        The President's budget also provides $2.9 billion for
    disaster relief, a level consistent with the average non-
    terrorist disaster costs over the past 5 years.
        I can assure you, Senators, that President Bush appreciates
    the importance of recovery. I had the distinct honor of joining
    the President in touring Missouri last spring after the
    devastating tornadoes struck Pierce City, Missouri. It was
    absolutely a downpour. The President gets out of the car, and
    goes over to visit with a couple who were standing in front of
    their damaged storefront. This couple also had damages to their
    home, but using FEMA's temporary housing, our immediate needs
    assistance, their insurance, and SBA home and business loans,
    this couple is now recovering. The President recognizes the
    importance of this type of all-hazards planning, as evidenced
    by his $2.1 billion request for the disaster relief fund.

                    OFFICE OF NATIONAL SECURITY COORDINATION

        In fiscal year 2005, FEMA's Office of National Security
    Coordination will also continue to carry out its mandated
    mission to provide executive agent leadership, to ensure
    continuity of national operations in response to all-hazards
    emergencies in order to guarantee the survival of an enduring
    constitutional government.
        In summary, during the last year, FEMA has continued to
    carry out its traditional mission. Successful implementation of
    the new initiatives and the ongoing activities I have discussed
    today will improve our national system of mitigating against,
    preparing for, responding to, and recovering from disasters and
    emergencies caused by all hazards.

                               PREPARED STATEMENT

        In closing, on a personal note, I want to thank you, Mr.
    Chairman, Senator Byrd, Senator Murray, for the absolute
    wonderful support that you have given FEMA over the past years.
    I would be happy to answer any questions that you might have at
    this time.
        [The statement follows:]

                     Prepared Statement of Michael D. Brown

    Introduction
        Good morning Mr. Chairman and Members of the Subcommittee. I am
    Michael Brown, Under Secretary for the Emergency Preparedness and
    Response Directorate (EP&R) of the Department of Homeland Security
    (DHS), which includes the Federal Emergency Management Agency (FEMA).
        I am honored to appear before you today to talk about FEMA's
    accomplishments of this past year since it has become part of the
    Department of Homeland Security. More importantly I want to highlight
    our priorities for fiscal year 2004 and why support of the President's
    Budget request for fiscal year 2005 is critical to insure that FEMA can
    continue to fulfill its traditional role of preparing for, mitigating
    against, responding to, and recovering from disasters and emergencies
    caused by all hazards.
        FEMA has undergone significant changes since becoming part of DHS--
    both external and internal--but it has not changed its focus. As part
    of DHS, FEMA continues its tradition of responding to help disaster
    victims and those in need whenever disasters or emergencies strike.
    Transition into the Department of Homeland Security
        On March 1st, FEMA will celebrate its first full year as part of
    the Department of Homeland Security. We are proud to be part of this
    historic effort and are more committed than ever to our duty as
    defenders of the Homeland. We made significant strides in our first
    year as a component of the Department, and we continue to see the
    advantage of and realize benefits from being part of a larger
    organization. We believe that the Federal-wide consolidation of all-
    hazards preparedness, mitigation, response, and recovery programs
    brings real benefit to the American public.
        Since March 1st of last year, FEMA has worked to merge disaster-
    related public health programs from the Department of Health and Human
    Services (DHHS) into a comprehensive and unified national response
    capability. These programs include the National Disaster Medical System
    (NDMS), which is designed to provide a single, integrated, national
    medical response capability to augment the Nation's emergency medical
    response capability when needed for major disasters and Federally
    declared emergencies. Another important public health-related program,
    the Strategic National Stockpile (SNS), maintains large quantities of
    essential medical items that can be provided for the emergency health
    security of the United States in the event of a bioterrorist attack or
    other public health emergency and to support State and local
    communities during emergencies.
        FEMA also successfully merged a multiplicity of other disaster
    response teams and assets from different departments and agencies to
    create a unified national response capability within the Department of
    Homeland Security. Among these teams and assets, now merged within
    FEMA's Response Division, are the:
      --National Disaster Medical System,
      --Domestic Emergency Support Team, and
      --Strategic National Stockpile
        FEMA has also been given operational control of the Nuclear
    Incident Response Team in certain circumstances, including the event of
    an actual or threatened terrorist attack.
        As we settle into DHS, we continue to leverage the extensive
    experience and capabilities of the Department's other components. For
    example, in responding to Hurricane Isabel, we received aerial imaging
    and aviation support from our friends at Immigration and Customs
    Enforcement (ICE) and the U.S. Coast Guard. We are partnering with the
    Information Analysis and Infrastructure Protection Directorate to
    improve our damage prediction and resource placement decisions and to
    take advantage of their critical infrastructure resources and
    expertise. We look forward to continuing and increasing such
    cooperation in the future.
    Fiscal Year 2003 Accomplishments
        In fiscal year 2003, the Federal Emergency Management Agency (FEMA)
    obligated nearly $2.9 billion in disaster funds to aid people and
    communities overwhelmed by disasters, including floods, ice and winter
    storms, wildfires, tornadoes, hurricanes, typhoons, and tropical
    storms. In addition, FEMA obligated $6.8 billion to fund projects
    associated with the September 11 response. Overall, FEMA responded to
    62 major disasters and 19 emergencies in 35 States, 4 U.S. Territories
    and the District of Columbia. These events included the record Midwest
    tornadoes, Super Typhoon Pongsona and Hurricanes Claudette and Isabel.
    The 19 emergencies declared in 2003 included the loss of the Space
    Shuttle Columbia, the President's Day snowstorm, and the Northeast
    power outages.
        While the California fires in October left an indelible mark in our
    memories, the Nation's fire season in 2003 was not as busy, with
    exceptions, in Montana and Arizona. But in the areas impacted, the
    fires were devastating and severe. In fiscal year 2003, FEMA approved
    assistance for 34 fires in 11 States, compared with 83 fires in 19
    States in fiscal year 2002.
        In fiscal year 2003, Congress supported the President's efforts to
    promote disaster mitigation, through the creation and funding of two
    important initiatives: the Pre-Disaster Mitigation Grant Program and
    the Flood Map Modernization Program. Great strides have been made in
    both of these areas in the last year. These two programs will
    ultimately result in the reduced loss of life and property throughout
    our Nation.
        FEMA's Preparedness Division awarded more than $160 million in
    Emergency Management Performance Grants to the States to maintain and
    improve the national emergency management system. To date, the United
    States Fire Administration has awarded over $650 million in grants to
    fire departments across the Nation as part of the Assistance to
    Firefighters Grant Program. Both of these programs are now requested in
    the Office for Domestic Preparedness (ODP) portion of the Department's
    budget for fiscal year 2005 and we are working very closely with ODP on
    transferring these programs. FEMA also provided a total of 17
    interoperable communications equipment grants for $79.57 million, and
    the Emergency Management Institute, the National Fire Academy (NFA) and
    the Noble Training Center together trained more than 290,000 fire and
    emergency management and response personnel nationwide.
        In our response to Hurricane Isabel, last September, we
    demonstrated a more forward-leaning and proactive response posture and
    made every effort to improve communication, coordination and timely
    delivery of critical disaster supplies. FEMA increased the frequency of
    daily video teleconferences with the impacted States and meteorological
    and river forecasting centers, jointly planned response actions with
    the States, pre-positioned materials, and opened multiple staging areas
    and mobilization centers in anticipation of response needs. These and
    other changes we have made allow us to continue to improve Federal
    disaster response efforts. We will continue to take advantage of the
    lessons learned and best practices from Isabel and other disasters, and
    apply them in our programs to change the impact of future events.
        Also during fiscal year 2003, FEMA launched the Continuity of
    Operations Readiness Reporting System, a single automated system that
    allows Federal Executive Branch departments and agencies to report the
    state of their Continuity of Operations capabilities and readiness. The
    System has been tested and will be fielded this year. In addition to
    technology upgrades and improvements, FEMA's Office of National
    Security Coordination maintained a 24/7 operational readiness
    capability in support of National Security programs, including the
    initial planning and coordination for an interagency Continuity of
    Operations exercise, Exercise Forward Challenge 2004, to take place
    later this year.
    Fiscal Year 2004 Priorities
        In fiscal year 2004, FEMA is focusing on its five major program
    areas: Mitigation, Preparedness, Response, Recovery, and National
    Security.
        Our Mitigation efforts center on modernizing our Nation's flood
    maps, providing Pre-Disaster Mitigation (PDM) grants, and enhancing the
    National Flood Insurance Program (NFIP). For Map Modernization over 300
    mapping projects, valued at approximately $85 million, were launched
    nationwide in fiscal year 2003 and we are working with State and local
    representatives to identify projects for fiscal year 2004. The PDM
    grants will again provide stable funding to assist State and local
    governments to reduce risks. The number of NFIP policies will be
    increased by 5 percent.
        Our Preparedness Division will support the Department's efforts to
    put into place a National Incident Management System (NIMS) that will
    help improve coordination of disaster response at all levels. In
    addition, we will publish Mutual Aid System Development, Credentialing
    and Equipment Interoperability Standards. Our support for training and
    exercises continues to enhance the Nation's emergency management
    capabilities and increasing fire preparedness remains a central
    mission.
        In 2004, our Response capabilities continue to grow. We will field
    enhanced response teams and resources, improve our response times, put
    plans into place for catastrophic events, and improve our training. We
    will continue to consolidate and integrate all of our different
    disaster response programs, teams, and assets; design new approaches;
    and implement new efficiencies that will result in a more unified,
    integrated, and comprehensive approach to all-hazards disaster
    response. We want to elevate our operational response capabilities to a
    whole new level of proficiency, one that will further the principles of
    the National Response Plan (NRP) and the National Incident Management
    System (NIMS) to better serve the American people.
        For those impacted by disasters, FEMA continues to provide
    appropriate and effective disaster recovery assistance. Simultaneously,
    we continue to focus on re-designing our Public Assistance Program and
    developing a catastrophic incident housing recovery strategy. These
    efforts will enhance our current capabilities and better position us to
    recover from a catastrophic event.
        Finally, we are ensuring that the FEMA National Security Program
    has adequately staffed, trained, equipped, and exercised Continuity of
    Operations (COOP) and Continuity of Government (COG) programs to
    guarantee the survival of Enduring Constitutional Government.
    Fiscal Year 2005 Budget Highlights
        The President's fiscal year 2005 Budget for FEMA:
      --Assumes a $2.9 billion spending level for disaster relief--a level
            consistent with the average non-terrorist disaster costs over
            the past 5 years. This includes more than $2.1 billion in new
            disaster funds, as well as funds expected to remain available
            from prior years. This is over $300 million more than the
            fiscal year 2004 appropriation.
      --Continues implementation of Project BioShield, which encourages the
            development and purchase of necessary medical countermeasures
            against weapons of mass destruction. Through an advance
            appropriation, $2.5 billion is made available beginning in
            fiscal year 2005. These funds will be obligated through fiscal
            year 2008.
      --Includes $20 million in new budget authority for planning and
            exercises associated with improving medical surge capabilities.
      --Includes $8 million in new budget authority for four Incident
            Management Teams (IMTs) to act as the core, field-level
            response teams for major disasters, emergencies, and acts of
            terrorism.
      --Includes $7 million in new budget authority for development and
            implementation of the National Incident Management System
            (NIMS), specially designed to provide a basic framework of
            organization, terminology, resource identification and typing;
            training and credentialing; and communications protocols to
            deal effectively with incidents of all sizes and complexities
            involving Federal, State, and local governments, Tribal
            Nations, and citizens.
      --Continues the President's Pre-Disaster Mitigation program, which
            helps to minimize the devastation caused by natural disasters
            through a competitive grant process that supports well-designed
            mitigation projects. In fiscal year 2005, we will initiate
            post-disaster evaluations to begin documenting losses avoided
            and assessing program impact.
      --Continues the replacement and modernization of the Nation's Flood
            Insurance Rate Maps.
      --Transfers the Strategic National Stockpile to DHHS. As a result of
            the transfer, $400 million is moved to DHHS to maintain the
            stockpile and strengthen its future capacity with new and
            needed medical products as soon as they become available.
      --Transfers the Emergency Food and Shelter Program to the Department
            of Housing and Urban Development.
    Mitigation
        FEMA's mitigation programs are an essential part of the Department
    of Homeland Security's charge to protect the lives and property of
    Americans from the effects of disasters. Mitigation programs provide us
    the opportunity not only to develop plans to reduce risks, but more
    importantly, to implement those plans before disaster strikes.
        In previous years, Congress supported the President's efforts to
    promote disaster mitigation by creating and funding two initiatives:
      --Pre-Disaster Mitigation Grants, and
      --Flood Map Modernization.
        The intent of the Pre-Disaster Mitigation Grants is to provide a
    consistent source of funding to State, local, and Tribal governments
    for pre-disaster mitigation planning and projects that primarily
    address natural hazards. The plans and projects funded by this program
    reduce overall risks to the populations and structures, while reducing
    reliance on funds from Federal disaster declarations. The competitive
    nature of the Pre-Disaster Mitigation Program encourages communities to
    assess their risks, to evaluate their vulnerabilities, and to implement
    mitigation activities before a disaster strikes. This budget proposes
    support for both pre-disaster and post-disaster mitigation assistance.
        The Flood Map Modernization Program provides the capability to
    broaden the scope of risk management. This enables more expansive use
    of the geospatial base data needed to develop the flood maps.
    Communities, lenders, insurance agents, and others use the maps and the
    flood data approximately 20 million times a year to make critical
    decisions on land development, community redevelopment, insurance
    coverage, and insurance premiums. As flood hazard data is updated, the
    current flood map inventory is being changed from a paper map system to
    a digital one. New technology will enhance the usefulness and
    availability of flood data to all customers. The new system also
    supports the development and distribution of geospatial data of all
    hazards, both natural and man-made.
        The fiscal year 2005 budget will continue to update flood maps
    nationwide and increase State and local capability to manage flood
    hazard data. By the end of fiscal year 2005, digital GIS flood hazard
    data covering 50 percent of our Nation's population will be available
    online.
        The National Flood Insurance Program (NFIP) has a significant
    impact on reducing and indemnifying this Nation's flood losses. Prior
    to the creation of the NFIP, floodplain management as a practice was
    not well established, and only a few states and several hundred
    communities actually regulated floodplain development. Flood insurance
    was not generally available. We are working diligently to refine and
    expand our all-hazards risk communication strategy to meet the goal of
    a 5 percent increase in NFIP policy ownership. This increase in
    insurance policy ownership will reduce reliance on the Disaster Relief
    Fund and will foster individual economic stability.
    Preparedness
        FEMA's Preparedness Division helps ensure our Nation is prepared to
    respond to emergencies and disasters of all kinds. The Preparedness
    Division is responsible for Federal, State, local, and community
    emergency preparedness programs; assessments and exercises; grants
    administration; the Radiological Emergency Preparedness Program and the
    Chemical Stockpile Emergency Preparedness Program. The U.S. Fire
    Administration works to prevent fire deaths and damage to property, and
    carries out its mission through leadership, advocacy, coordination, and
    support. The training programs offered at the National Fire Academy and
    the Emergency Management Institute promote the professional development
    of command level firefighters, emergency managers, and emergency
    responders, and are an important aspect of the U.S. Fire
    Administration's duties.
        The Noble Training Center, located at Ft. McClellan, Alabama, is a
    new addition to FEMA. Transferred from DHHS in fiscal year 2003, the
    Noble Training Center is the only hospital facility in the United
    States devoted entirely to medical training for Weapons of Mass
    Destruction (WMD). In fiscal year 2005, Noble will continue to train
    medical personnel for State and local hospitals, emergency medical
    services, and the National Disaster Medical System.
        In fiscal year 2005, FEMA's Preparedness Division will work with
    other components of the Department to develop the National Incident
    Management System (NIMS) and the National Response Plan (NRP). These
    initiatives will ensure that all levels of government, across the
    Nation, work together efficiently and effectively, employing a single
    national approach to domestic incident management.
        FEMA's Preparedness Division will continue to provide the States
    with technical assistance in their all-hazards planning. To avoid
    duplicative planning, our efforts will be closely coordinated with
    those of the Office for Domestic Preparedness to update State terrorism
    preparedness plans.
        As part of our effort to prepare our citizens for all disasters,
    the Division will oversee the Community Emergency Response Teams, or
    CERT. This program, begun as a civilian training program by the Los
    Angeles Fire Department, has become a nationwide effort to train
    citizens in first aid and basic firefighting and emergency response
    techniques. CERT-trained citizens are able to provide those basic
    emergency services that would otherwise occupy the first responders.
    FEMA provides train-the-trainer programs to allow as many citizens as
    possible to receive this training across the country. The CERT program
    has grown from 170 teams in 28 States and Territories in March of 2002
    to over 900 teams in 51 States and Territories.
    Response
        FEMA's Response Division is responsible for integrating national
    emergency response teams, systems and assets into a comprehensive and
    fully coordinated, national capability that supports States and
    communities in responding to all types of disasters, including acts of
    terrorism. This is accomplished by arranging the necessary and
    appropriate national assets, establishing a consolidated national
    incident response system, and effectively coordinating strategic
    resources in full partnership with Federal, State, local, and tribal
    governments, the private sector, volunteers, and citizen partners.
        The fiscal year 2005 Response Division budget proposes to:
      --Create four Incident Management Teams (IMTs) and formulate plans
            for full implementation in fiscal year 2006; the IMT is a
            highly responsive and flexible response team that will be able
            to quickly establish a strong Federal leadership capability in
            any disaster environment or high threat situation, including
            acts of terrorism involving the use of WMD;
      --Continue all-hazards catastrophic disaster response planning for
            one additional U.S. city, based on the pilot disaster planning
            template developed for New Orleans, Louisiana. The template
            will be used in the future as a basis for all-hazards
            catastrophic planning for other high risk areas of the country;
            and
      --Continue efforts to develop the capability to provide intermediate
            emergency housing aimed at meeting the needs of large numbers
            of disaster victims displaced from their homes as a result of
            large scale and catastrophic disasters
        FEMA's Response Division will also continue to implement measures
    to reduce response times for its teams and delivery of disaster
    supplies.
        Additional funding requested in fiscal year 2005 implements the
    National Incident Management System--NIMS. FEMA's goal for 2005 is to
    focus on the readiness of Federal response teams and the integration of
    Federal capabilities with that of State and local jurisdictions. We
    will conduct outreach to our Federal response partners and State and
    local counterparts to ensure connectivity and synchronization of
    response capabilities under NIMS, and will conduct NIMS and Incident
    Command System (ICS) training for Federal response teams. These
    activities will ensure we have the baseline skills for all teams to
    operate under NIMS and be fully integrated into the NIMS/ICS doctrine.
        As highlighted previously, the President's fiscal year 2005 budget
    proposes an initiative to develop FEMA's medical surge capability.
    Under this initiative, FEMA will evaluate supplemental capabilities for
    both a fixed and mobile facility to demonstrate the utility of using
    alternate facilities to support medical surge activities, as well as
    the utility of having a surge capacity that can be mobilized,
    transported, and made operational within set timelines. The second part
    of this initiative is to implement the concept through two pilot
    projects.
    Recovery
        FEMA's Recovery Division leads and coordinates the timely delivery
    of Federal disaster assistance to individuals and communities.
        In fiscal year 2005, the Recovery Division will continue to provide
    assistance to individuals for temporary housing, damaged personal
    property, crisis counseling, disaster unemployment, and disaster legal
    services. FEMA responded to over 2.5 million calls last year, from
    people seeking to register for disaster assistance and to have their
    questions answered. The Recovery Division processed more than half a
    million individual disaster applications.
        The Individual Assistance Programs that meet victims' most basic
    needs provide assistance for housing, personal property losses, and
    medical and funeral expenses. In each disaster we ask our customers,
    the disaster victims, what they think of the service we provided to
    them. I am pleased to tell you that we consistently earn very high
    marks from our customers when they are surveyed. In fiscal year 2005 we
    will continue to invest in technology that ensures we continue to meet
    our customers' expectations.
        FEMA's Public Assistance Program, which accounts for the bulk of
    recovery expenditures out of the Disaster Relief Fund, is the primary
    means for community recovery. State and local governments and certain
    non-profit organizations can be reimbursed to repair facilities to
    their pre-disaster condition, as well as for costs associated with
    debris removal and emergency protective measures. FEMA is focusing on
    redesigning the Public Assistance Program to be more efficient and
    better prepared to meet the needs of a catastrophic or terrorist event
    by moving toward a web-based, user friendly, estimated based program,
    communities will be able to recover faster. In order to better prepare
    for the transition to a redesigned program, FEMA is establishing a
    methodology for estimating the total cost of large projects versus
    determining final costs after work is complete. Implementing the Public
    Assistance Program using cost estimates will allow State and local
    governments to better budget for recovery, improve our estimates of
    disaster expenditures, and reduce administrative costs and closeout
    timelines. In addition, we are working on proposed revisions to the
    Public Assistance Insurance Rule, which was last revised in 1991. The
    Stafford Act requires applicants for Public Assistance grants to
    ``obtain and maintain'' insurance on a damaged facility as a condition
    of receiving assistance. In the past, there have been concerns about
    this rule imposing a pre-disaster insurance requirement for all
    hazards. The proposed rule will not require insurance before disaster
    strikes, except for flood insurance in identified flood hazard areas,
    as required by the Stafford Act. The purpose of the rule is to simply
    clarify issues not adequately addressed in the current rule, such as
    eligible deductibles.
        The Fire Management Assistance Grant Program is another key
    resource for States and local governments to mitigate, manage, and
    control forest or grassland fires to prevent damages that may otherwise
    result in a major disaster declaration.
        I assure you that President Bush appreciates the importance of
    Recovery. I had the honor of joining the President in touring Missouri
    last spring after the devastating tornadoes struck Pierce City. Even
    though it was pouring rain during our visit, the President got out of
    his car to go over and talk to a couple who were standing in front of
    their damaged store front. They also had damages to their home. Using
    FEMA's temporary housing, immediate needs assistance, their insurance,
    and SBA home and business loans, this couple is recovering.
        The massive California Wildfires of 2003 scorched over 750,000
    acres and claimed 24 lives. During the response to the wildfires, the
    President and Secretary Ridge wanted me to be intimately involved in
    the coordination efforts between the Federal agencies doing work there.
    Through the formation of a pair of interagency bodies, the Washington-
    based California Fires Coordination Group and the field-level Multi-
    Agency Support Group, FEMA's Recovery Division was instrumental in
    assuring that each of our Federal partners was coming to the table with
    comprehensive plans that were complementary to each other, that
    minimized the sort of bureaucratic ``stove piping'' that results in
    duplication of efforts, and that continued to focus on the needs
    identified by the State and local communities as priorities. Our shared
    success is the natural result of FEMA's commitment to ``all-hazards''
    emergency management, and a focus on a scaled approach to meet the
    challenges of any kind of incident, from the floods, fires, and storms
    that happen all too often, to the catastrophic scenarios that we
    prepare for, but hope will never come to pass.
        We take our mission to help communities and citizens recover very
    seriously. My goal is to continue to do the work we do now better and
    faster, and to build on our current recovery capabilities to be better
    prepared to face a catastrophic natural or terrorist event.
    National Security
        In fiscal year 2005, FEMA's Office of National Security
    Coordination will continue to carry out its mandated mission to provide
    Executive Agent leadership to ensure continuity of national operations
    in response to all-hazard emergencies in order to guarantee the
    survival of an enduring constitutional government. Funding in fiscal
    year 2005 will be used to ensure that all Federal Executive Branch
    departments and agencies attain and maintain a fully operational
    Continuity of Operations (COOP) capability. FEMA will provide
    assistance to Federal departments and agencies to help them attain and
    maintain fully operational contingency capabilities. FEMA will develop
    and implement a test, training, and exercise program that culminates in
    a complete exercise of the Continuity of Government (COG) program. In
    addition, we will provide technical support and guidance to our
    interagency, regional, State and local stakeholders across the Nation.
    Conclusion
        During the last year, FEMA has been busy but we continue to carry
    out our mission to prepare for, mitigate against, respond to, and
    recover from disasters and emergencies caused by all-hazards. The key
    to our continued improvement will be to take the lessons learned from
    previous disasters and incorporate them into our preparedness,
    planning, and procedures, so that we do an even better job of
    responding next time. We evaluate the lessons learned from each
    disaster and make plans to incorporate the new approaches and remedy
    problems. Hurricane Isabel provided such an opportunity, and it
    validated our priority to reduce disaster response times and improve
    our capability to gather information and effectively and efficiently
    manage the Federal Government's response to Presidentially-declared
    disasters.
        Successful implementation of the new initiatives and the on-going
    activities I have discussed today will improve our national system of
    mitigating against, preparing for, responding to, recovering from
    disasters and emergencies caused by all hazards.
        In closing, I want to thank the Members of the Subcommittee for
    their past support of FEMA and I appreciate the opportunity to testify
    before you today. I would now be pleased to answer any questions you
    may have.

                          STRATEGIC NATIONAL STOCKPILE

        Senator Cochran. Thank you, Mr. Secretary.
        Some of the questions that we have relate to the proposals
    to make transfers of authority and responsibility within the
    executive branch, some from the new Department of Homeland
    Security to the Department of Health and Human Services. I
    observed in Senator Byrd's statement concerns about that, and I
    was going to ask about that as well.
        One of the transfers that I notice includes a transfer of
    the Strategic National Stockpile to the Department of Health
    and Human Services. Why is this a priority of the
    administration? Do you think that would be an appropriate thing
    to do and would enable us to do a better job of defending
    against attacks or terrorist attacks in this area?
        Mr. Brown. Senator, the beauty of transferring the
    stockpile back to HHS is that it truly aligns the budget
    requirements and the operations requirements in one Department.
    The important thing to note is that FEMA does not lose its
    ability to deploy the stockpile in times of emergency. Under
    the national response plan, we will still be able to deploy the
    stockpile and utilize it as necessary to aid victims. So, what
    we have done is actually realign operations and budget within
    one Department.

                              DISASTER RELIEF FUND

        Senator Cochran. There is also a question about whether
    some of the funding requests are sufficient to enable you to
    carry out your mission and to fulfill your responsibilities
    under the law. In particular, we notice that in the President's
    budget for disaster relief there is a request for $2.1 billion,
    but also included is a transfer of $7 million to preparedness,
    mitigation, response, and recovery for the urban search and
    rescue teams.
        Is this an indication that you really need more money for
    disaster relief than is reflected in the budget request?
        Mr. Brown. No, Senator, it is not. In fact, I would say in
    response to Senator Byrd's comments earlier about last years
    episode with the disaster relief fund, that President Bush
    absolutely recognizes the importance of the DRF being fully
    funded, and in this case by requesting $2.15 billion, we are
    going to be able to do that.
        I will tell you that we learned some lessons in FEMA last
    year because of that experience with the DRF. I am very pleased
    to say that our cash management systems have gotten much
    better. Our recoveries have gotten much better, and so this
    $2.15 billion, combined with the carryover we are going to have
    from good cash management, and from the recoveries that we are
    going to make in the current DRF funding, will be fully funded
    in the DRF this year. I think that is a reflection of the
    President's understanding that this pool of money needs to be
    available so that FEMA can do its job without worrying if there
    is enough money or putting some programs on hold. It is a
    recognition of the importance of that fund.
        Senator Cochran. Well, I am impressed with the job that the
    Department has done in such a short period of time,
    reorganizing itself under the new Department's management
    structure, but including some agencies like FEMA, which is I
    suppose one of the principal responsibilities of this
    directorate which you chair, and to do so in a way that did not
    diminish in any respect the capacity of the Government to
    respond to natural disasters and the traditional role that FEMA
    has played. So, I congratulate you on the management function
    that you are providing and the responsibilities that you are
    carrying out in that regard.
        We are going to work hard to be sure that we appropriate
    the money that you need and that our communities need when they
    are confronted with natural disasters. In my part of the
    country, we have been besieged with hurricanes, floods,
    tornadoes, and many other natural disasters, and FEMA has been
    right there and has helped lead the way, working with local
    officials and volunteers who come to respond to those
    situations. We know how important your work is and we
    appreciate the fact that you are dedicating yourself to help
    run this agency so people who do need help in these situations
    get it.
        Mr. Brown. Senator, I very much appreciate those comments.

                               FIRE GRANT PROGRAM

        Senator Cochran. Senator Byrd.
        Senator Byrd. Mr. Under Secretary, in my opening statement,
    I had a question which I said was rhetorical for that purpose.
    Where do these policies leave a small town fire department,
    let's say in Sophia, West Virginia, that needs to purchase
    breathing apparatus or needs equipment to deal with a chemical
    spill? Let us say we are talking about a town in Kanawha County
    on the river near the great complex of chemical industries that
    have been located there and have served the country so well
    through the years. Where does the policy leave a small town
    fire department that needs to purchase breathing apparatus or
    equipment to deal with a chemical spill?
        Mr. Brown. Senator, I would tell you that I think the fire
    grant program is one of the best programs in the Federal
    Government. It is incredibly efficient, organized, and directly
    affects and helps needs like those you are identifying. In
    addition to that, it has a peer review process that will take
    fire departments from West Virginia, Mississippi, Washington,
    or wherever they are from, and the peers themselves, the fire
    departments, look at where the need is the greatest and give us
    advice about where those dollars should go.
        I will tell you that the President's request this year for
    $500 million in fire grants is the same amount that the
    President requested last year. He recognizes the importance of
    first responders. He also recognizes the importance of this
    program.
        We are doing absolutely everything to ensure that the fire
    grant program is not deteriorated in any way by its movement to
    ODP. We are providing detailees. We are providing programmatic
    support. We are doing everything to make sure that program
    stays intact. Congress recognized that last year and said, as
    this transfer takes place, the U.S. Fire Administration should
    remain a vital part of the grant program, and indeed they are.
    FEMA is doing everything to support ODP to keep this program
    operating the exact same way it always has so that it does help
    fire departments like you describe.
        Senator Byrd. Mr. Brown, if it is one of the best programs,
    a statement with which I agree, why is the President proposing
    to cut it by 33 percent?
        Mr. Brown. Well, the President's request is the exact same
    as he made last year, and Congress added an extra $249 million
    to it last year. The President is reiterating his same request
    from last year.
        Senator Byrd. But he is cutting the program by 33 percent.
    Why is he doing that?
        Mr. Brown. His request is the same request he made last
    year.
        Senator Byrd. I understand that. You said that already. But
    on what basis? Why is he doing that?
        Mr. Brown. The President's overall request for first
    responders is actually an increase. There was $8 billion last
    year for first responders, and that is increasing by about $900
    million this year. So, overall for first responders, there is
    actually an increase.

                    EMERGENCY MANAGEMENT PERFORMANCE GRANTS

        Senator Byrd. Do I have time for one more question on this
    round?
        Senator Cochran. Yes.
        Senator Byrd. Mr. Secretary, first, you are proposing to
    cut emergency management performance grants by $9 million.
    Second, you are proposing to target those reduced emergency
    management dollars to terrorism activities, in essence,
    mandating that States put terrorism projects at the top of
    their priority list or risk losing funding. Finally, you are
    proposing to hinder the States' flexibility by capping at 25
    percent the amount of each grant that can be spent on salaries.
        West Virginia spends more than half of its EMPG funds on
    salaries. I understand that nationwide State and local
    governments use over 50 percent of their grant funds for the
    salaries that pay for emergency planning professionals. In West
    Virginia, EMPG is an essential source of funds to help State
    emergency managers reduce the threat of floods, assist flood
    victims, and to prepare for potential chemical spills. The all-
    hazards approach to emergency management is a critical tool for
    State officials.
        Earlier this week, I received a letter from Stephen Kappa,
    K-a-p-p-a, the Director of the Office of Emergency Services in
    West Virginia. Perhaps you know him, do you?
        Mr. Brown. Yes sir, I do.
        Senator Byrd. In his letter, Director Kappa concluded that
    the President's proposals for emergency management would have--
    and I quote here--``a devastating impact on emergency
    preparedness at the State and local levels.'' He, Mr. Kappa,
    concluded that--quote, again--``West Virginia and other States
    must balance our preparedness efforts to appropriately
    integrate terrorism, not to the detriment or exclusion of the
    existing national emergency response system that supports day-
    to-day public safety needs.'' That is the end of that excerpt
    from Mr. Kappa's letter to me.
        Today if FEMA focuses too myopically on terrorist threats,
    it could jeopardize the all-hazards approach to emergency
    management that has been built up over the past 25 years, and
    we will be in danger of repeating past mistakes.
        I am very disappointed with the President's emergency
    management proposal. Please explain, if you will, to a couple
    of Senators, who have been here quite some time from flood-
    prone States, such as West Virginia and Mississippi, why these
    proposals make sense.
        Mr. Brown. Senator, let me first state that I understand
    the concern that has been expressed by you and others about
    this change on the cap. I recognize that concern. In addition
    to that, the reason that FEMA has always been successful under
    James Lee Witt's leadership, under Joe Albaugh's leadership,
    has been that we have always understood that it is the ability
    of our State and local partners to do their job that helps make
    us successful. We must continue our relationships with the
    State and local agencies to understand what their capacities
    are, what their abilities are, what they have, and what they
    can and cannot do. One way that we will do that is through the
    EMPG. By changing the cap, it increases necessarily the amount
    of money that is now available for training and exercises at
    the State and local government. The administration believes
    that personnel costs are truly a shared cost and the State and
    locals should share some of the costs of that personnel, with
    this change, we are increasing the amount of money that we can
    now use to exercise and train those personnel to make them even
    more robust in the future.
        Senator Byrd. Is that the answer to my question?
        Mr. Brown. Yes, sir.
        Senator Byrd. That is all on this round, Mr. Chairman.
    Thank you.
        Senator Cochran. Senator Murray.

                CUTS TO EMERGENCY MANAGEMENT PERFORMANCE GRANTS

        Senator Murray. Mr. Chairman, thank you very much.
        I want to follow up on the question that Senator Byrd asked
    because I am also hearing from everyone in my State they are
    deeply concerned about this cap and obviously the cuts to the
    EMPG program. It is really the backbone for many of our
    communities in responding to all types of hazards. Senator Byrd
    mentioned floods. Certainly earthquakes and all the other
    disasters that people have to prepare for are also included.
    They have added to this now, obviously, terrorism. I am very
    concerned because EMPG really is the lifeblood for many of the
    emergency programs in my State and across the country.
        A good example is Kitsap County. It has several military
    bases, a population of about 240,000, and about one-fifth of
    the emergency management budget comes from EMPG funding. That
    county uses its funding to support their office operations and
    to provide public education to help prepare the cities and
    residents in that county for all types of hazards. But not
    every community in my State is like that, and for those
    communities, EMPG funding is not some kind of enhancement. It
    is actually not unusual to see almost 80 percent of the Federal
    EMPG allocation used to hire dedicated emergency management
    professionals, which is really important.
        So, when we see these recommended limitations, many of the
    communities in my State and probably across the country tell us
    they are going to have to terminate their emergency management
    program. That would place our entire emergency management
    response system in jeopardy. So, I share Senator Byrd's concern
    and I think we need to understand that the cap in particular
    will dramatically impact many of our counties to where they are
    not doing this, and that is, I do not think, the direction your
    agency wants to go.
        So, if you want to respond, I am happy to listen.
        Mr. Brown. In response, Senator, I would just say again
    that I understand those concerns greatly. I want to emphasize
    that we believe that a robust State and local system is
    necessary for FEMA to be able to succeed because, remember,
    FEMA only steps in when it is beyond the capabilities of State
    and local governments to respond to a disaster, whether it is
    natural or manmade. With the change in this cap, we will now
    use those additional resources to train the people at the State
    and local level to exercise them more at the State and local
    level than we have in the past.
        Senator Murray. But if there is nobody there to train, we
    are going to be----
        Mr. Brown. We would ask the States to see if they cannot
    find money to keep those people in place, because I do not want
    to lose those people either. I want to keep them there and
    train them and exercise them.
        Senator Murray. Well, remember, our States and our local
    communities are suffering from a very difficult budget crisis
    right now.
        Mr. Brown. I understand.
        Senator Murray. And if we just count on them coming up with
    the money, they are going to turn to us and talk about Federal
    mandates and complain to us, and it will be back on our
    shoulders when there is a response that cannot be taken care
    of.
        Mr. Brown. I understand that, Senator.
        Senator Murray. So, Senator Byrd, I want to work with you
    on that concern because I share it.
        Senator Byrd. Thank you. You have heard the company line.

     PUTTING THE STRATEGIC NATIONAL STOCKPILE BACK UNDER THE DEPARTMENT OF
                           HEALTH AND HUMAN SERVICES

        Senator Murray. The chairman mentioned the issue of the
    Strategic National Stockpile being put back under the
    Department of Health and Human Services. I think it is a
    positive change. I think it will help streamline the Federal
    decision-making in time of a crisis, but I am concerned that
    with this change, the Department of Homeland Security will no
    longer be connected to the public health community and our
    Nation's doctors and nurses are our first responders,
    particularly in time of a biological attack. They are the ones
    we need to sound the alarm, and we need to make sure that the
    immunologists and the virologists and the State public health
    officials are part of that coordinated effort to manage and
    respond to a crisis if it involves bioterrorism. So, I am
    concerned about that and want to know from you how we are going
    to engage our public health professionals and keep them part of
    this loop.
        Mr. Brown. Oh, absolutely. In fact, I hope I can alleviate
    those concerns because, while the stockpile does transfer back
    to HHS, it is only the budget and operations. We would still
    deploy the stockpile. We would still handle the logistics of
    the stockpile.

                        NATIONAL DISASTER MEDICAL SYSTEM

        In addition to that, we still have the National Disaster
    Medical System within FEMA, which we are looking at and
    assessing. I think we have a very good relationship with NDMS.
    I think they are very proud to be a part of FEMA now. We are
    really trying to invigorate that system to make it part of the
    first responder community. So I think those concerns that you
    have, while they are certainly legitimate concerns, we are
    addressing those. I think we are on the right track to
    incorporate NDMS fully into our response system.
        Senator Murray. Well, thank you.
        Mr. Chairman, I do have a few other questions, but I know
    we have a vote in a few minutes. I would like to submit them,
    if I can, in particular involving Hammer Training Facility and
    our ability to train some of our local responders that I would
    like to get a response back from you.
        Mr. Brown. Certainly.
        Senator Cochran. Thank you.

                                   BIOSHIELD

        Mr. Secretary, let me ask you about the budget request as
    it relates to the BioShield initiative. The request asks for a
    substantial increase in funding from $885 million for this
    fiscal year to the level of $2.5 billion for fiscal year 2005.
    What is the justification for that substantial increase?
        Mr. Brown. Mr. Chairman, that will fully fund the BioShield
    program, as the President announced in the State of the Union a
    couple of years ago. That will enable us to create, as I said
    last year, this venture capital fund, if you want to call it
    that, so that we are ready to create a market for any kind of
    antibiotics or other medicines that we need to respond to a
    bioterror threat. There currently is no way to encourage the
    pharmaceutical companies or the drug companies to venture into
    these areas and create things for which there is no market
    other than the fact that we have intelligence that may tell us
    that there is a specific threat, a specific pathogen that
    terrorists are trying to use. This will enable us to create
    that market and produce those antibodies for that particular
    kind of attack.
        Senator Cochran. There is a failure by the Congress to pass
    legislation that authorizes the BioShield program. Does this
    lack of legal authority impair in any way the administration's
    efforts to help protect our national security from a threat
    that this program seeks to address?
        Mr. Brown. Mr. Chairman, we are going to use the excellent
    language that you put in the appropriations, and use that as
    authorization to move forward, because we think our mandate
    from you and from the Congress is to use this money, and to use
    it for these kinds of threats. So that is what we will do.
        Senator Cochran. To what extent are your funds going to be
    expended in this year and for what specific purposes?
        Mr. Brown. We currently are looking at some additional
    anthrax vaccines and some additional kinds of antibiotics that
    we need to develop.
        Senator Cochran. The President's budget proposes in this
    area to make some transfers, transfer the Strategic National
    Stockpile from Homeland Security to the Department of Health
    and Human Services. But it does not suggest that BioShield
    should be transferred. Why is it more appropriate for the
    stockpile to be managed by HHS and BioShield to be managed by
    the Department of Homeland Security?
        Mr. Brown. Primarily because in BioShield, the resources
    that will be used in it are going to be based upon the threats
    that the Department of Homeland Security, the Central
    Intelligence Agency, and others develop through their intel
    gathering processes. So, as we understand and determine what
    those threats are, that BioShield money will be there for us to
    use to respond to those specific threats. Now, we will still
    work with the CDC, with HHS, and others in the development of
    those drugs and pharmaceuticals, but because we have the threat
    information, we believe that program should remain within DHS.
        Senator Cochran. To your knowledge, is there an assessment
    being done by the administration on our vulnerabilities to
    biological attacks, and if so, who is doing the assessments?
        Mr. Brown. There is an assessment that is being carried
    forth, primarily by the Department of Homeland Security. Since
    September 11th, everything has changed in the Federal
    Government. And when I say that DHS is leading it, you can rest
    assured that we do not do anything without incorporating all of
    our Federal partners. We talk to HHS. We talk to CDC. We talk
    to anyone who may be involved to make sure that we get the
    right kind of information and that we get the right kind of
    response.
        Senator Cochran. I assume that your directorate has had
    some involvement in the recent events that have been in the
    news and with those that we are also familiar with here in
    Congress, the ricin incident here in this building, and the
    anthrax events of the recent past. To what extent is the
    Department actively involved in these episodes? What do you do?
    What did you do in connection with those events?
        Mr. Brown. Everything from information-sharing among the
    Departments to the Capitol Police. We were in constant contact
    with them, for example, during the State of the Union or any
    other national security special event such as that. We deploy
    the National Disaster Medical System. You probably did not have
    a chance to see it during the State of the Union, but we had
    incredible teams all around these buildings, all within the
    Capitol, ready to respond to any type of event. So with FEMA
    and the Department of Homeland Security still being seen as the
    first responder on behalf of the Federal Government, we have an
    intimate involvement in all of those activities.
        Senator Cochran. Thank you very much for your efforts to
    protect our security.
        Mr. Brown. Thank you, Senator.
        Senator Cochran. Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman, one of the best with
    whom I have ever served. I am talking about you.
        Senator Cochran. I understand. You are embarrassing me.

                            PRE-DISASTER MITIGATION

        Senator Byrd. Mr. Secretary, in fiscal years 2003 and 2004,
    Congress appropriated $150 million for a new pre-disaster
    mitigation fund. $150 million was a compromise with the
    Administration which proposed to spend $300 million on pre-
    disaster mitigation and to eliminate any funds for post-
    disaster mitigation.
        This year, the administration requests $150 million for
    pre-disaster mitigation, and requests that 7.5 percent of the
    amount a State receives for a disaster from FEMA be provided
    for post-disaster mitigation.
        I am pleased that the Administration recognizes the
    importance of post-disaster mitigation. In West Virginia, the
    $5.6 million received from this program will be used to acquire
    and demolish repetitive lost properties in the flood plain and
    relocate residents. To date, none of the non-planning pre-
    disaster funds from either 2003 or 2004 have been made
    available to States. West Virginia wants to spend the money on
    moving people out of the flood plain before another disaster
    strikes. It is unacceptable that this money is stuck at FEMA.
        When can States expect to have pre-disaster mitigation
    funds in hand?
        Mr. Brown. Senator, we have received well over 400
    applications for that money. 140 grants have been awarded for
    planning and for specific mitigation projects. To date, $49
    million has been obligated. $15 million of that was for
    planning and $34 million for actual projects. $70 million will
    go out on a rolling basis before the end of the calendar year.
    So, we have received those 400 applications, and we have
    already obligated 49. We have also awarded 140 grants. That
    money will start going out the door. I want to get those people
    out of those repetitive places just as badly as you do, sir.
        Senator Byrd. I am not so sure about that. Be careful what
    you say.
        Mr. Brown. Sir, we will get those funds out. It is a
    process of requesting 400 applications, getting the planning
    for those applications done, and the grant money out for those
    planning grants. And we will continue to get those monies out
    on a rolling basis.
        Senator Byrd. The 2003 money was appropriated 12 months
    ago. I simply do not understand why it has taken so long to get
    the money out the door.
        Until fiscal year 2003, States received an additional 15
    percent in disaster relief funds for post-disaster mitigation
    projects. Earlier this week, I received a letter from a host of
    emergency management groups, including the International
    Association of Emergency Managers, the American Public Works
    Association, and the Association of State Flood Plain Managers,
    urging Congress to restore the hazard mitigation grant program
    formula to 15 percent from its current level of 7.5 percent.
        What is your opinion of this proposal?
        Mr. Brown. Senator, I am for anything that we can do to
    mitigate disasters, pre-disaster or post-disaster. To the
    extent that we can get money out the door to help folks, we are
    going to do that.
        Senator Byrd. What is your opinion of this proposal?
        Mr. Brown. We will certainly take it under consideration
    and look at it, Senator.
        Senator Byrd. You are going to take it into consideration
    and look at it?
        Mr. Brown. We certainly will.
        Senator Byrd. Well, I am going to call you in a few days
    and see how long you have been looking at it. Okay?
        Mr. Brown. Excellent.

                      PROPOSED CUTS TO FIRE GRANTS FUNDING

        Senator Byrd. I have just one more question, Mr. Chairman,
    and I may have others for the record.
        In December 2002, FEMA issued a report entitled, ``A Needs
    Assessment of the U.S. Fire Service''. That report found that
    half of all fire engines being used by our fire departments
    were over 15 years old. It found that 57,000 fire fighters
    lacked personal protective equipment, and that 41 percent of
    fire department personnel involved in wildland fire fighting
    lacked formal training in those duties.
        Last year you could not approve over $1.7 billion of
    applications because of a lack of funds.
        Given the serious deficiencies in basic fire fighting
    equipment and skills that you found, do you think that the
    administration's proposal to cut fire grant funding by 33
    percent and to focus fire grants on terrorism-related
    activities will undermine the ability of our local fire
    fighters to respond to emergencies in their communities?
        Mr. Brown. No, sir, it will not because we will continue to
    make certain that under the fire grant program whatever monies
    we have available go to the highest critical needs, so that we
    start solving the worst needs that we have in the country
    first. We will keep the program in place that way and make
    certain that the money goes where it should go.
        Senator Byrd. Thank you, Mr. Secretary. Thank you, Mr.
    Chairman.

                      NATIONAL INCIDENT MANAGEMENT SYSTEM

        Senator Cochran. Thank you, Senator Byrd, very much for
    your assistance with the work of this committee. I appreciate
    it.
        Mr. Secretary, the budget request includes an increase of
    $7 million for a national incident management system to support
    the President's national strategy for homeland security. This
    incident management system is proposed to be a single
    coordinating system to bring together the Federal, State, and
    local governments, tribal Nations, and citizens during
    emergencies, disasters, or other catastrophic incidents.
        How will the national incident management system differ
    from other systems that are designed to deal with all-hazard
    events within the Federal Emergency Management Agency and the
    Emergency Preparedness and Response Directorate?
        Mr. Brown. Senator, one of the problems we have now is that
    while we have a fairly good, unified command system around the
    country--first responders generally understand unified command
    and command and control systems--what we lack is a unified
    national incident management system with a common language by
    which we can all exercise and train to that common language.
    This $7 million will enable us to do that. So, when we bring in
    teams from anywhere in the country or mutual aid teams are
    helping other teams, they will walk into that situation with a
    common language, a common training. They will have exercised
    under a common system so that everyone will be on the same
    page, so to speak, when they are responding to any kind of
    disaster.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Cochran. Mr. Secretary, we appreciate very much
    your cooperation with our committee, your making available your
    statement to us, and the opportunity to visit with you to talk
    about the budget request in advance of the hearing.
        Senators may submit written questions, as you know. We hope
    that you will be able to respond to them within a reasonable
    time.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                  Questions Submitted by Senator Thad Cochran

                                   BIOSHIELD

        Question. Without Congressional approval of BioShield, who has the
    authority to sign contracts related to the obligation of BioShield
    funds?
        Answer. The fiscal year 2004 Homeland Security Appropriations Act
    provided $890 million to be spent for development of biodefense
    countermeasures for the current fiscal year. The Department of Homeland
    Security (DHS), the Department of Health and Human Services (HHS), the
    Homeland Security Council, and the Office of Management and Budget
    (OMB) recognize the importance of expeditious progress in developing
    much-needed countermeasures while following Congressional intent. In
    that vein, DHS and HHS have sought to ensure that the development of
    the interagency agreement for next-generation anthrax vaccine is in
    line with the proposed BioShield legislation. Until such time as the
    BioShield Act is passed, a FEMA contracting officer has the authority
    to sign interagency agreements with HHS, which, in turn, will execute
    contracts with manufacturers.

                                ANTHRAX VACCINE

        Question. Is the procurement of an anthrax vaccine conducted
    through the Strategic National Stockpile or BioShield? Is this the
    responsibility of the Department of Homeland Security or the Department
    of Health and Human Services?
        Answer. Anthrax vaccine (recombinant Protective Antigen, or rPA)
    procurement will be funded by the Biodefense Countermeasures
    appropriation included in the fiscal year 2004 DHS appropriation, but
    will be acquired for exclusive placement in the Strategic National
    Stockpile (SNS). The SNS discretionary appropriation is used to
    purchase items for which there is a significant commercial market. The
    BioShield program was specifically constructed to spur development of
    countermeasures for which no commercial market existed, as is the case
    with rPA, for inclusion in the Stockpile.
        DHS is responsible for assessing current and emerging threats
    against the United States. The Weapons of Mass Destruction (WMD)
    Medical Countermeasures subcommittee, an interagency group co-chaired
    by DHS, HHS, and the Department of Defense, has developed
    countermeasures information of interest to officials who will make the
    BioShield procurement decisions. The WMD subcommittee commissioned an
    end-to-end analysis of medical countermeasures to Category ``A''
    biological agents (anthrax, smallpox, plague, botulinum toxin,
    tularemia, Ebola and other hemorrhagic fever viruses). Working groups
    developed initial requirements for four high-priority bioweapon (BW)
    countermeasures for which there is high need and a reasonable
    expectation that products will be available in the near term, with rPA
    development topping the list.
        The DHS Secretary enters into an interagency agreement with the HHS
    Secretary, whose department is responsible for providing medical,
    scientific, acquisition, technical, and procurement expertise, and is
    to establish technical requirements, identify suppliers, negotiate and
    evaluate proposals, enter into contracts, assess contractor
    performance, and perform administrative services. HHS also must ensure
    all the necessary steps have been taken for the licensing of the
    finished product.
        Additionally, DHS is in the process of finalizing an interagency
    agreement with the Army for the acquisition of Anthrax Vaccine Adsorbed
    (AVA). This agreement will be funded from the Public Health Programs
    (SNS) appropriations account.
        Question. When will the Department of Homeland Security or the
    Department of Health and Human Services procure the doses for which it
    has identified a requirement? What is that requirement? How many doses
    over what period of time will be necessary to meet it?
        Answer. DHS and HHS are now finalizing an interagency agreement to
    purchase recombinant Protective Antigen (rPA) vaccine to protect 25
    million persons. The government will consider later purchase of
    additional anthrax vaccine contingent on new vaccination delivery
    system technology and other cost-saving factors such as reduced dose
    requirements. A three-dose schedule is currently being evaluated, which
    would require a total purchase of 75 million doses. This initial
    agreement for fiscal year 2004 is for $134 million. Projections for
    obtaining the entire 75 million-dose requirement cover 5 years.
    Additionally, DHS is now finalizing an interagency agreement with the
    Department of the Army for up to 5 million doses of AVA.
        Question. Are we filling at least part of that requirement with an
    FDA-approved product currently available?
        Answer. The Stockpile currently maintains a small amount of the
    only FDA-licensed pre-exposure vaccine against anthrax (Anthrax Vaccine
    Adsorbed, or AVA). Currently, it has limited production capacity, and
    rectifying that problem would be very expensive and take several years
    to accomplish. AVA is not currently licensed for children or for the
    elderly. However, in order to ensure that some type of anthrax vaccine
    is available until the development and procurement of rPA, DHS and HHS
    have signed an interagency agreement for the purchase of AVA through
    the Department of the Army. This agreement will provide approximately 2
    million doses in fiscal year 2004, 1.5 million doses in fiscal year
    2005, and 1.5 million doses in fiscal year 2006.

                          STRATEGIC NATIONAL STOCKPILE

        Question. The proposal to transfer the Strategic National Stockpile
    from the Department of Homeland Security (DHS) back to the Department
    of Health and Human Services (HHS) in fiscal year 2005 requires
    legislative action by the authorizing committee. Has such legislation
    been submitted by DHS, and if so, what action has been taken by the
    authorizing committee?
        Answer. Language to effectuate the transfer of SNS from DHS to HHS
    has been added to S. 15, the Project Bioshield Act of 2003.
        Question. How has the fiscal year 2004 transfer from HHS to DHS,
    and the proposed fiscal year 2005 transfer from DHS to HHS, affected
    the daily operations, personnel, and activities of the program? Have we
    crippled the program in any way by continuing to shuffle it between
    departments? How are decisions being made at this time in regard to the
    Stockpile?
        Answer. The daily operations of the Stockpile have not been
    affected in any significant manner. Personnel and normal operations are
    nearly unchanged since the transfer from HHS to DHS and decisions are
    being made much as they always have been made at the Stockpile. The
    motivation to return the program to HHS is due to the desire to create
    a single command structure for the program, and to streamline
    operations once again. HHS will, however, have the obligation to deploy
    the stockpile when so requested by the Secretary of DHS. As such, the
    potential response needs of the DHS mission will not be compromised in
    any manner.

                      METROPOLITAN MEDICAL RESPONSE SYSTEM

        Question. What is the direct impact of the elimination of funding
    within Emergency Preparedness and Response in fiscal year 2005 for the
    Metropolitan Medical Response System?
        Answer. The funds that Congress has appropriated for the
    Metropolitan Medical Response System (MMRS) over the last several years
    have been used to establish certain capabilities, to get the program up
    to its baseline, and to facilitate transfer of the program to the
    localities for continuation, once the baseline is established. We will
    reach the baseline this fiscal year (2004), and therefore no additional
    funding is being requested.
        Secretary Ridge has proposed a reorganization (a letter was sent to
    Members of Congress on January 26, 2004), wherein the MMRS program for
    fiscal year 2004 will be transferred to a newly established Office of
    State and Local Government Coordination and Preparedness. Under this
    arrangement, FEMA would have no further role in the MMRS program for
    fiscal year 2004, and there will be no Federal program in fiscal year
    2005.
        We cannot precisely estimate the number of local jurisdictions that
    would continue the MMRS program without Federal resources support. We
    are fairly certain that a large number of them, as an element of
    prudent preparedness and operational necessity, will attempt to
    maintain MMRS-type mass casualty integrated response preparedness and
    seek to use Federal funds from other programs to support eligible
    portions of MMRS-type capabilities.
        Question. Are the program activities of the Metropolitan Medical
    Response System being met within any other areas of the President's
    budget?
        Answer. There are other Federal programs, which provide more
    narrowly focused, but related, support. These include the Centers for
    Disease Control and Prevention-Health Resources and Services
    Administration (HRSA) Bioterrorism Preparedness Grants and the HRSA
    Hospital Grants; the Office for Domestic Preparedness (ODP) Training
    and Exercise Programs and Equipment Grants; and ODP Urban Area Security
    Initiative funding to the designated States, which will then work with
    counties and cities to form regions that will work together through
    mutual aid agreements, interoperable communications, statewide
    intelligence centers, and community and citizen participation.

                    EMERGENCY MANAGEMENT PERFORMANCE GRANTS

        Question. What will happen to the all-hazards preparedness,
    mitigation, response, and recovery activities of the Emergency
    Management Performance Grants if the primary focus for all grant
    programs within the Office for Domestic Preparedness is required to be
    homeland security activities?
        Answer. Effective State and local all-hazards planning capabilities
    are critical to the success of FEMA in responding to disasters, but at
    this time, the Administration feels strongly that resources be focused
    toward building local governments' homeland security capabilities.
        Question. If a 25 percent cap is placed on the amount of grant
    funding allowed for personnel costs, many county and local emergency
    management offices may have to close due to the funding shortfall. The
    emergency management offices are critical to the preparation of the
    local community prior to disasters, which is the key to ensuring
    survival of its citizens during a disaster. The 25 percent cap on
    personnel costs could result in as much as a 60 percent decrease in
    emergency management staff nation-wide. If this happens, how will it
    affect FEMA's ability to operate in the field during a disaster? Would
    the direct costs to FEMA increase if more FEMA personnel were required
    to travel to the disaster site for assistance due to lack of local
    emergency management personnel?
        Answer. Currently, Emergency Management Performance Grants funds
    are disproportionately used to pay salaries, which is predominately a
    State/local responsibility. The cap on personnel costs is intended to
    ensure that the State and local governments assume more responsibility
    for their personnel costs. This would allow a greater percentage of
    grant funds to be utilized by State and local governments for training
    and exercises, further enhancing readiness capabilities.

                PREPAREDNESS, MITIGATION, RESPONSE, AND RECOVERY

        Questions. For fiscal year 2004, the Emergency Preparedness and
    Response Directorate proposed to establish one pilot Incident
    Management Team to develop the base structures and procedures for the
    four Incident Management Teams requested in the fiscal year 2005
    budget.
        Where will the one pilot Incident Management Team be located?
        What criteria were used to determine this location?
        Where are you in the process of establishing this pilot team?
        What is the time-frame for having the pilot team fully operational?
        Answer. The Pilot Incident Management Team (IMT) will be collocated
    with the Coast Guard facility in Elizabeth City, North Carolina. This
    location was chosen for the Pilot IMT primarily due to the efficiencies
    that can be achieved through use of existing Coast Guard facilities,
    air transportation, and available space. Our goal in fiscal year 2005
    is for IMTs to be fully activated within 15 hours of initial disaster
    notification and to have an average IMT response time for arrival at a
    disaster site within 22 hours. Our current average response time for
    all existing response teams is 72 hours for arrival on scene; the
    response time for the IMTs will help to reduce this overall average to
    60 hours by fiscal year 2005. Geographic proximity and transportation
    support will be crucial to achievement of this goal.
        Also, this geographic location is ideal for its close proximity to
    high-risk areas in the eastern United States. The Pilot IMT is our
    development phase of this initiative and the timing for its inclusion
    into our response system coincides perfectly with the onset of the 2004
    hurricane season. This location will also afford us the possibility of
    real-time disaster scenarios in which the IMT can be utilized,
    exercised, and evaluated for future development of other teams in
    fiscal year 2005.
        We are currently engaged in the acquisition of support equipment
    and recruitment of personnel, and we plan to have the Pilot IMT at an
    operational status by September 2004. The development and validation of
    procedures and operational doctrine will be complete by that time as
    well. Operational status will be constantly augmented and improved as
    we continue to exercise the teams and to enhance our procedures and
    doctrine through remedial actions.
        In the future, the IMTs will be referred to as Federal Initial
    Response Support Teams (FIRST), a name which differentiates them from
    existing response teams and which follows incident management protocols
    more closely. This name change is proposed in the draft National
    Response Plan (NRP) and will be made official when the NRP is
    finalized.
        Questions. The fiscal year 2005 budget requests an increase of $6.2
    million for four Incident Management Teams to act as the core, field-
    level response teams for major disasters, emergencies, and acts of
    terrorism. It is my understanding that this funding will be used to
    secure half of the personnel needed, secure two locations for housing
    and deployment of teams, complete studies regarding transportation
    needs, and develop plans for full implementation of four teams in
    fiscal year 2006.
        Will the $6.2 million support two Incident Management Teams or
    four? If $6.2 million only supports two fully functional teams, will
    another $6.2 million be needed in fiscal year 2006 for the other two
    teams? If not, then what is the anticipated need to complete this
    initiative?
        How will the locations for the Incident Management Teams be chosen?
        Do you anticipate expanding beyond four teams after fiscal year
    2006?
        What is the projected annual funding needed to maintain these teams
    once they are in place and fully operational?
        Answer. At the time the budget was developed, the plan was for two
    full teams staffed by 10 full-time equivalent (FTE) positions. Current
    plans are to use the funding requested in the fiscal year 2005 budget
    to establish four teams with 5 FTEs to provide better coverage across
    the country. The Pilot Team will be established in fiscal year 2004 and
    three additional teams will be established in fiscal year 2005. We have
    chosen locations for the teams that take advantage of existing DHS
    transportation and support assets without requiring a large team
    structure. Much of the work for site selection is being done in fiscal
    year 2004 to be ready for establishment of the teams. Establishment of
    the teams, however, is not an end stage for readiness.
        Locations for the IMTs are being identified based on geographic
    location as well as collocation with exiting Coast Guard assets that
    will be utilized to support the IMTs in their operations. Elizabeth
    City, North Carolina, and Sacramento, California, have been chosen as
    potential sites on the East and West coasts of the United States. This
    will allow the IMTs to have a quick response across the country,
    including Alaska and Hawaii, through ground and/or air transportation
    provided through support from the Coast Guard.
        Our goal in fiscal year 2005 is for IMTs to be fully activated
    within 15 hours of initial disaster notification and to have an average
    IMT response time for arrival at a disaster site within 22 hours. Our
    current average response time for all existing response teams is 72
    hours for arrival on scene; the response time for the IMTs will help to
    reduce this overall average to 60 hours by fiscal year 2005. Geographic
    proximity and transportation support will be crucial to achievement of
    this goal.
        At this point, we are concentrating on the establishment of the
    four teams planned for fiscal year 2005. It would not be fiscally
    responsible for us to plan for additional teams until we have
    thoroughly tested our capability with the four teams. We plan to
    conduct a thorough review of each team through exercises,
    credentialing, and after-action remediation before we make a
    determination on needs for future development. In order to provide
    support to the IMTs, we are also developing augmentation plans that
    will seamlessly link our regions and existing team structure to the
    IMTs.
        We anticipate that the $6.2 million budget will be programmed in
    outyears to provide maintenance of caches and equipment, exercise
    support, training, further development, and planning support for the
    IMTs.
        In the future, the IMTs will be referred to as Federal Initial
    Response Support Teams (FIRST), a name which differentiates them from
    existing response teams and which follows incident management protocols
    more closely. This name change is proposed in the draft National
    Response Plan (NRP) and will be made official when the NRP is
    finalized.
        Questions. The President's budget request includes a $1.8 million
    increase for the Mobile Emergency Response System to develop a
    temporary workforce to assist in the daily operations, deployments and
    necessary training and exercise programs to ensure that all response
    teams can provide a 24-hour response time to communities impacted by
    disasters, emergencies, terrorist events, or weapons of mass
    destruction incidents.
        How is this workforce trained, maintained, and called into action
    when needed? In general, how will the temporary workforce operate?
        How many workers make up the temporary workforce?
        What is the projected annual funding requirement to maintain the
    Mobile Emergency Response System?
        Answer. Every effort will be made to hire experienced personnel who
    are already trained, qualified, and experienced in the desired general
    skill areas. Once hired, they will be paired with permanent full-time
    employees for on-the-job-training on specific systems. Their skills
    will be maintained and kept current in the same manner by which the
    permanent full-time employees' skills are kept current. As new systems
    are introduced and current systems are upgraded, they will be provided
    a combination of contractor and in-house instruction. They will also be
    provided training literature and manuals as well as opportunities for
    continuing on-the-job-training. They will be called into action by
    using FEMA's Automatic Deployment Database. FEMA developed this system
    several years ago to rapidly activate and deploy its temporary
    workforce known as Disaster Assistance Employees, who provide most of
    the staffing at Disaster Field Offices.
        The Mobile Emergency Response System (MERS) temporary workforce
    will be called into action as training, daily operations, and
    deployment needs develop. In general, the temporary workforce will be
    used to reinforce and extend the capabilities of the MERS. When
    training opportunities occur, they will be activated for the period of
    the training. When deployments occur, they will be utilized in several
    important ways. They will report to the home bases to replace deployed
    permanent full-time employees to sustain ongoing daily operations. They
    will also deploy with full-time employees to increase and extend the
    scope of field operations and will deploy in the place of unavailable
    full-time employees.
        The initial goal is to have 50 MERS temporary employees. Although
    all the temporary employees will be available to assist any of the 5
    (MERS) Detachments, the initial goal will provide 10 temporary
    employees per unit. The final goal is to have 100 MERS temporary
    employees. This would equate to 20 temporary employees per unit.
        Once all hiring activities are completed, the projected annual
    funding to maintain a 100-person MERS temporary workforce is
    approximately $3.2 million.
        Questions. An increase of $5 million is requested to develop one
    fixed and one mobile module to demonstrate medical surge capacity. An
    additional $15 million is requested to develop two pilot projects to
    evaluate one fixed and one mobile medical surge facility.
        How will the locations for the pilot projects be determined?
        What follow-on appropriations will be required to support this
    project?
        What is the anticipated timeframe for expanding this project
    nation-wide?
        Answer. Department staff will develop standardized evaluation
    criteria that will be used to assess potential locations for the pilot
    projects. It is currently anticipated that a significant number of
    factors will be incorporated in the evaluation criteria, including:
    overall population of the jurisdiction; population density in and
    around the location; hazards and risks prevalent in the location
    (including natural, technological, and terrorist incidents); existing
    hospital capacity; strength and organization of existing medical
    response and public health systems; existing State or local plans for
    surge capacity; availability of existing Federal and non-Federal
    facilities with adequate storage space, site access, and proximity to
    commercial ground and air transportation; proximity to sources of
    medical equipment and pharmaceutical suppliers; and proximity to FEMA
    regional offices.
        FEMA continues to work with the Administration on the program
    details and budgetary requirements for future years.
        It is anticipated that if the program is funded beginning in fiscal
    year 2005 without delay, procurement will begin for the two pilot units
    in fiscal year 2005.

                            URBAN SEARCH AND RESCUE

        Question. Why has the administration requested only $7 million to
    support the FEMA urban search and rescue program when the annual
    preparedness grants of $150,000 that were previously generated under a
    $7 million budget were insufficient to properly maintain and operate
    these task forces?
        Answer. A funding level of $7 million is requested for Urban Search
    and Rescue (US&R) for fiscal year 2005. The program will be funded in
    the Preparedness, Mitigation, Response and Recovery account, rather
    than from Disaster Relief, where it has historically been funded. Since
    2001, FEMA has received more than $100 million in both regular and
    supplemental appropriations to upgrade equipment for and to train the
    US&R teams to perform under a variety of scenarios, including those
    involving WMD.
        Question. Since all 28 teams have been made Weapons of Mass
    Destruction (WMD) capable, what is the projected funding level for
    maintaining that WMD capability in fiscal year 2005?
        Answer. The fiscal year 2005 President's Budget requests $7 million
    for the US&R program.
        Question. Although funding was provided in fiscal years 2003 and
    2004 for the purchase of a second equipment cache, is it true that FEMA
    has not moved forward on this acquisition of equipment and materials
    for the 28 task forces? If so, why not? What happened to those funds?
        Answer. The US&R program is committing funds for the 2nd Equipment
    Cache initiative. This includes $22.4 million in fiscal year 2003 funds
    and $27.3 million in fiscal year 2004 funds through an interagency
    agreement with the Defense Logistics Agency, and a subordinate
    acquisition contractor to assist the US&R program office staff and to
    allow for the bulk purchase of the myriad tools, supplies, and
    equipment that will be procured (a full cache has some 6,500 items). An
    ad hoc Tiger Team made up of US&R logistics specialists from selected
    US&R task forces has been convened to address the purchase,
    organization, cache packaging, and other necessary issues for
    developing the prototype standardized cache that will be duplicated and
    distributed to the 28 US&R task forces in the system. Initial meetings
    have already been conducted and subsequent meetings are scheduled.
        Furthermore, we are finalizing the lease of necessary warehouse
    space to allow for the receipt of the ordered items; developing the
    organization, cache packaging scheme, and mobilization load plan of a
    standardized cache; and resolving other related issues. Due to the
    large size and complexity of a full US&R cache, the procurement and
    development is being addressed in a phased approach by cache function,
    such as rescue, communications, medical, logistics, etc. To expedite
    the process, each segment will be forwarded to all task forces as the
    segment is addressed. We anticipate the warehouse lease being finalized
    in mid-March. The overall initiative is in progress and on target with
    identified timelines. We anticipate the task forces will begin
    receiving initial cache shipments in the latter half of calendar year
    2004. Fiscal year 2003 and fiscal year 2004 funding provides for the
    first- and second-year phases of the overall 3-year acquisition.
    Funding for the third phase from fiscal year 2005 is indeterminate.
        Question. There seem to have been some delays in the progress of
    enhancement intended by Congress for the urban search and rescue
    program: a lack of progress in acquiring the second equipment cache for
    all 28 task forces; delay in the acquisition of ground transportation;
    development of additional training programs and task force evaluations
    have not been accomplished. What steps are being taken to rectify the
    delays and lack of progress?
        Answer. The identified aspects of the US&R program are in process
    and on target. The US&R program is committing funds for the 2nd
    Equipment Cache initiative. This includes $22.4 million in fiscal year
    2003 funds and $27.3 million in fiscal year 2004 funds. An ad hoc Tiger
    Team made up of US&R logistics specialists from selected US&R task
    forces has been convened to address the purchase, organization, cache
    packaging, and other necessary issues for developing the prototype
    standardized cache that will be duplicated and distributed to the 28
    US&R task forces in the system. Initial meetings have already been
    conducted and subsequent meetings are scheduled.
        Furthermore, we are finalizing the lease of necessary warehouse
    space to allow for the receipt of the ordered items; developing the
    organization, cache packaging scheme, and mobilization load plan of a
    standardized cache; and resolving other related issues. We anticipate
    the warehouse lease being finalized in mid-March.
        The acquisition of ground transport vehicles, which will allow for
    movement of the US&R equipment cache, is also on target. In fiscal year
    2003 funding, $11.2 million ($400,000 per task force for trucks and
    trailers) and $3.9 million ($138,000 per task force for command and
    support vehicles) is being provided to the 28 task forces for this
    procurement at the sponsoring agency level.
        The US&R program office has received and approved the task forces'
    acquisition plans for the fiscal year 2003 acquisition. We anticipate
    that all task forces will have the truck/trailer assets in place by the
    middle of 2004. Acquisition of command vehicles will follow in the same
    vein with the awarding of the fiscal year 2004 Preparedness Cooperative
    Agreements, which are also in process.
        US&R training requirements are also in process and on target.
    Another $2 million in fiscal year 2003 funds has been committed and
    eight national US&R specialist-training classes are scheduled and being
    conducted in calendar year 2004 (including the development of three new
    classes). For fiscal year 2004, $1.9 million is being obligated for
    nine national training classes scheduled during 2005. A comprehensive
    US&R Task Force Administrative Training Course has been developed and
    was recently delivered for the sponsoring agency task force program
    managers and grants managers of the 28 task forces. The US&R Task Force
    Readiness Evaluation Program is currently under development by US&R
    program staff and selected task force members. Prototypes for US&R
    Preparedness Cooperative Agreement reporting, monthly operational
    readiness reporting (using web-based online access), and onsite peer
    evaluation/readiness checks are in progress or have been developed. We
    anticipate the pilot onsite inspections to begin in the mid-to-latter
    half of calendar year 2004.

                       EMERGENCY FOOD AND SHELTER PROGRAM

        Question. The transfer of the Emergency Food and Shelter Program
    from the Department of Homeland Security (DHS) to the Department of
    Housing and Urban Development (HUD) requires legislative action by the
    authorizing committee. Has the Department sent a request to the
    authorizing committee for legislative language to be considered? If
    not, why? If so, what is the current status of the legislative
    proposal?
        Answer. FEMA is currently working with the appropriate authorizing
    and appropriations committees on the legislative language to transfer
    the Emergency Food and Shelter program to the Department of Housing and
    Urban Development in accordance with the President's fiscal year 2005
    budget request.

                            FLOOD MAP MODERNIZATION

        Question. The fiscal year 2005 budget request includes $200 million
    for the Flood Map Modernization project. How will this funding be used?
        Answer. Fiscal year 2005 funding will be used to continue to
    implement the Multi-Hazard Flood Map Modernization Program. FEMA's
    vision for the program entails providing credible flood maps and data
    for communities nationwide that are more accurate, up-to-date, easier
    to use, and readily available. FEMA intends to accomplish the
    following:
      --Network the Nation using the latest Internet portal technology to
            provide access to general flood hazard, risk, and mitigation
            information, and convert the maps from paper to a digital
            format. The information will be tailored to the needs of
            specific partners, stakeholders, and users.
      --Leverage the use of Federal, State, and local resources, and
            transfer ownership and use of flood maps and data to the State
            and local levels by building and maintaining effective
            partnerships with State, regional, and community entities in
            the development of the maps and data
      --Use clear data standards to ensure that the modernized flood hazard
            maps reflect the best available data that suits the risk level
            for the given area
      --Reduce processing time and costs for flood map updates and increase
            accountability for spending by implementing results-oriented
            systems and standards that will facilitate the rapid exchange
            of data between our partners, staff, and contractors
      --Communicate widely, effectively, consistently, and continuously to
            maximize our partners', stakeholders', and users' understanding
            of flood hazards and the risks the hazards pose to life and
            property
        Primarily, the fiscal year 2005 funding will be used to initiate
    and complete flood map updates nationwide based on our 5-year Multi-
    Hazard Implementation Plan (MHIP) for completing the work in fiscal
    years 2004 through 2008. FEMA will use the MHIP to establish goals and
    baseline with existing priorities; to document and understand flood map
    update needs identified by State, regional, and local partners and
    stakeholders; and to develop prioritization criteria and a sequence for
    scoping counties and watersheds in the priority areas based on
    floodplain management, hydrologic, hydraulics, and terrain needs. The
    MHIP will be reevaluated annually to account for changing needs,
    natural disasters, and new partnerships; to prioritize changes; and to
    update mapping priorities, as appropriate.
        FEMA will provide a precise accounting of the engineering studies
    to be performed and the flood maps to be produced once development of
    the MHIP is completed; will scope the map update projects identified in
    coordination with State, regional, and local partners and stakeholders;
    and will contract the required map updates with our contractors and
    with State, regional, and local participants in our Cooperating
    Technical Partners (CTP) program.
        Question. The final contract for the national flood map
    modernization project has been continuously delayed over the last
    several months. Why? When exactly will the contract be finalized?
        Answer. The National Service Provider (NSP) contract was awarded on
    March 11, 2004. FEMA experienced some delays in finalizing the contract
    with the NSP due to the need to ensure the completeness and accuracy of
    this performance-based contract. More discussions and negotiations were
    needed than for a conventional compliance-based contract. The NSP is
    now on the ground in each of the ten regions as well as in
    headquarters, performing in accordance with the results-based contract,
    and on schedule to deliver initial functionality.
        Question. Since this is a performance-based contract, have the
    guidelines been developed for how performance will be measured? What
    level of funding is available or will be provided for the contract for
    ``independent contractor'' monitoring?
        Answer. FEMA has developed guidelines for how performance on the
    NSP contract will be measured and performance metrics have been closely
    linked to the strategic goals of DHS and FEMA.
        A detailed program management plan that outlines how performance
    will be measured has been developed. FEMA has negotiated a performance
    requirement summary with the NSP that describes each specific
    measurement and its acceptable quality levels. We have established a
    specific team that will be responsible for monitoring performance
    measurements and reporting results on a frequent basis.
        FEMA has assigned specific responsibilities for monitoring and
    measuring not only the contract performance, but program performance as
    well. We are providing the NSP with incentives to effectively manage
    all mapping activities and build partnerships and capabilities while
    producing high-quality flood maps using accurate, credible data.
        In addition, FEMA is procuring the services of an independent
    contractor to help monitor the NSP's performance and to verify that
    program outcomes are truly achieved. The projected funding level for
    this independent contractor is approximately $1.2 million for fiscal
    year 2004.
        Question. There is concern about conflict of interest with the
    company who has won the national contract and how much work they may be
    doing on the sub-contractor level. Are there guidelines in place to
    ensure there is no conflict of interest? How will identified conflicts
    of interest be avoided or mitigated?
        Answer. During the source selection process, one of the key issues
    was identifying mechanisms to avoid conflicts of interest or the
    appearance of conflict. Each offeror included presentations on means of
    avoiding such conflicts. The contract has established that the NSP will
    have an aggressive Organizational Conflict of Interest (OCI) management
    program consistent with Federal Acquisition Regulation 9.5.
        The NSP, which is a team of experienced contractors led by one
    primary contractor, has proposed a conflict of interest management
    approach that will be put into place upon contract award. Under the
    proposed approach, the prime contractor will not pursue any contracts
    for engineering studies with our regional offices or with States under
    our CTP program. The proposed approach also includes a reporting
    requirement for all other members of the NSP team to disclose all
    ongoing contracts and pursuit of contracts to the prime contractor for
    screening to identify potential OCI issues, perceived or actual. The
    prime contractor will inform our Contracting Officer in writing of any
    work that could pose a potential OCI so that appropriate measures may
    be taken to eliminate the OCI.
        Question. Without valid data the people at the State and local
    level won't have confidence in the maps, making them virtually useless.
    What guidelines are in place for an independent review of the process
    itself and the new digitized maps to ensure the revised maps have valid
    data? How will FEMA ensure that the flood hazard ``data'' has been
    updated or is current before converting it into new digital maps?
        Answer. A fundamental tenet of the Multi-Hazard Flood Map
    Modernization Program is that State and local involvement in the
    modernization of the flood maps is essential for program success.
    State, regional, and local partner involvement is particularly vital
    for the identification and use of best available, accurate data that
    are appropriate for the flood risk in the area being mapped. We are
    maximizing our partners' involvement and contributions in this critical
    area by establishing clear quality standards; by making appropriate use
    of Internet technology, automated data collection and processing tools;
    and through use of independent quality reviews.
        FEMA has developed criteria for assuring the quality of flood
    hazard maps and supporting data. FEMA implemented Digital Flood
    Insurance Rate Map base map standards in 1998 and Light Detection and
    Ranging system standards in 2000. Both standards were updated when the
    consolidated Guidelines and Specifications for Flood Hazard Mapping
    Partners was published in February 2002.
        State, regional, and local review and acceptance of new and
    existing data will be achieved at key milestones throughout the flood
    map update process--from the initial identification of flood map update
    needs as part of the MHIP, to the scoping of the flood map update, to
    the preparation and adoption of the final maps.
        Through our web-based flood hazard data collection and delivery
    system, we will make component data, such as topographic data,
    available for use by our mapping partners as it is developed. This will
    allow for data quality verification at the State, regional, and local
    levels at numerous points in the flood map update process. These
    reviews will help to assure that the data reflect a level of analysis
    and effort commensurate with the flood risk faced by the mapped
    communities.
        In addition to providing access to the data as it is developed, we
    are assuring quality by providing data collection and processing tools
    for our partners and contractors to use in performing map update
    projects. These tools have been designed with quality checks built in
    to minimize errors and to assure internal consistency in the collection
    and processing of the data. To ensure the tools are used properly, we
    will provide appropriate training and support to the partners and
    contractors who are using the tools for map update projects.
        FEMA is using the latest Internet portal technology to allow State,
    regional, and local partners to obtain current status information on
    the progress of a map update. This access will give our partners a more
    significant role in the management of the program.
        Furthermore, FEMA has incorporated a quality standard into the
    performance measurement system for the program, and plans to establish
    an independent contract to perform independent verification and
    validation and to measure the quality of the products produced. The
    independent contractor also will help monitor the NSP's performance and
    verify that program outcomes are achieved.
        Finally, FEMA is continuing the very effective practice of
    requiring independent quality reviews as part of the flood map update
    process. This practice was institutionalized when we published our
    consolidated Guidelines and Specifications for Flood Hazard Mapping
    Partners in February 2002. We include the independent quality review
    requirement in all mapping project-related contract documents developed
    with our contractors and with participants in the CTP program. These
    independent reviews help to assure map updates are completed
    efficiently and are consistent with FEMA standards.
        By requiring independent quality reviews throughout the map update
    process, we are assuring that products resulting from each activity
    meet FEMA standards before the next activity is started. We also are
    assuring that the maps and related products and data are internally
    consistent. These reviews also provide an opportunity for providing
    task-specific training to partners who may not be completely familiar
    with FEMA quality standards. The frequent independent quality reviews
    also eliminate the costly rework that can result when an error is made
    early in the processing and is not identified before processing
    continues.
        Question. Is the schedule of trying to have completely revised,
    digitized flood maps for the entire country in 5 years realistic?
        Answer. Based on our current schedule, we believe our plan for
    preparing and distributing updated, digitized flood maps is realistic.
    However, we will be better prepared to provide a precise accounting of
    the type of engineering study to be performed in each county when we
    complete the development of our 5-year implementation plan (MHIP);
    scope the map update projects identified in coordination with State,
    regional, and local partners and stakeholders; and contract the
    required map updates with our contractors and participants in our CTP
    program.
        Question. Is $200 million a year still an accurate estimate of the
    cost for this project, not just to convert the old paper maps into
    digitized maps but to truly revise them with the most accurate flood
    plain data? Are we sacrificing quality at any level for quantity of
    maps completed?
        Answer. Based on the information we have to date, we believe the
    funding requested will be adequate to meet our initial program goals.
    We will validate our original program baseline and provide a precise
    accounting of when and how the funding will be expended later this
    year, after we have completed the development of our 5-year
    implementation plan (MHIP), scoped the map update projects identified;
    determined the contributions that may be made by State, regional, and
    local partners through the CTP program; and contracted the required map
    updates.
        One of the primary objectives that our NSP was asked to meet was
    the creation of credible flood maps for use by partners, stakeholders,
    and other users. The maps will reflect the best data available and will
    be appropriate for the level of risk associated with the mapped area.
        In addition, we have incorporated a quality standard into our
    program performance standards to ensure quality of maps produced.
        Question. Beyond the 5 years anticipated to complete the project,
    how much follow-on funding is anticipated in the out-years to maintain
    the digitized map?
        Answer. At the present time, we cannot formulate a precise cost for
    maintaining the digitized maps. The cost of maintaining the digitized
    maps will depend on several factors, including the total cost savings
    realized by eliminating routine production of paper maps (e.g., manual
    updates, warehousing), and the level of State and local participation
    in maintaining the new maps that will be realized by expanding our CTP
    program. We will be able to estimate the maintenance budget for the
    program after we complete our 5-year implementation plan (MHIP);
    coordinate with States, regional agencies, and local communities; and
    assess each State's desired level of program participation as
    identified in its State Business Plan.
                                     ______

                   Question Submitted by Senator Ted Stevens

        Question. FEMA Region X has denied the use of Stafford Act disaster
    funds for two airports in Alaska (Northway Airport and Gulkana
    Airport). The repairs of these airports total $13,675,693. FEMA claims
    that it does not have the authority to perform these repairs and claims
    that the Federal Aviation Administration is authorized to perform these
    repairs. The FAA disagrees and claims that its agency lacks authority
    to provide for disaster repairs. Who has the legal responsibility for
    repairs to disaster damaged runways and airports?
        Answer. The appeal from the State of Alaska has been received and
    is currently under review. We will notify your office once a decision
    has been reached and the applicant has been informed.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

        Question. What percentage of fiscal year 2003 and fiscal year 2004
    EMPG funds are being used to pay salaries nationally? Please provide
    breakouts by State and include State and local government personnel
    expenses.
        Answer. In an attempt to be as responsive as possible to the
    questions of the Committee, we have developed the information in the
    table below. It is a statistical extrapolation based on budget levels
    for ``Personnel'' and ``Fringe Benefits'' submitted by the States on
    FEMA Form 20-20, ``Budget Information--Non-construction Programs.'' The
    States are not required to maintain or to submit detailed information
    on the exact percentages of their personnel costs funded with Emergency
    Management Performance Grant (EMPG) funds, therefore, we must emphasize
    that the data and methodology underlying this analysis are of known
    inadequacy, and the results below may not provide a complete or
    accurate assessment of the amount of EMPG funds used to pay salaries.
        The indications that we are able to derive from this analysis are
    that the amount of the Federal share of EMPG funds budgeted by the
    States for salaries and fringe benefits varies greatly, ranging from
    about 16 percent to about 72 percent. The average of the percentages
    was about 37 percent. For the Insular Areas, which are not required to
    share cost, the percentages ranged from about 56 to about 72 and
    averaged about 67 percent.
        Very little data is available for use of pass-through, or subgrant,
    EMPG funds for salaries and benefits at the local level. What we do
    have indicates that the number is higher than at the State level,
    probably averaging 80 percent or more.

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 Estimated
                                                                                                                Percent of                      Percent of
                          Reg./St. Name                        EMPG  Federal     Personnel        Fringe      Federal  Share     Estimated     Pass-through
                                                                   Share                         Benefits     for  Salaries/   Pass-through      Salaries/
                                                                                                                  Fringe                          Fringe
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    National Totals.........................................     154,885,912      75,144,375      16,416,336           37.40     115,843,873  ..............
    Region 1................................................      12,185,673       7,177,474       2,189,927           34.75       7,164,177  ..............
        Connecticut.........................................       2,407,428       1,477,757         603,221           43.22       1,404,291  ..............
        Maine...............................................       1,609,597         611,124         291,873           28.05       1,464,192  ..............
        Massachusetts.......................................       3,457,781       3,062,227         673,690           54.02       1,595,952  ..............
        New Hampshire.......................................       1,667,748         733,957         237,289           29.12         959,703  ..............
        Rhode Island........................................       1,599,677         891,015         285,125           36.76       1,136,623  ..............
        Vermont.............................................       1,443,442         401,394          98,729           17.32         603,416  ..............
        Region 2............................................      15,011,754       4,632,915       1,311,370           45.25       2,742,707  ..............
        New Jersey..........................................       4,139,084       1,031,739         201,641           29.80       1,672,122  ..............
        New York............................................       7,703,460       2,500,000         859,250           43.61         215,085  ..............
        Puerto Rico.........................................       2,536,400         737,895         156,026           35.24         855,500  ..............
        Virgin Islands......................................         632,810         363,281          94,453           72.33  ..............
    Region 3................................................       7,329,496       5,003,332       1,383,750           46.67       6,025,436  ..............
        Delaware............................................  ..............  ..............  ..............  ..............  ..............  ..............
        District of Columbia................................       1,501,603       1,793,206         284,000           69.17         410,000  ..............
        Maryland............................................  ..............  ..............  ..............  ..............  ..............  ..............
        Pennsylvania........................................  ..............  ..............  ..............  ..............  ..............  ..............
        Virginia............................................       3,889,095       2,306,396         810,356           40.07       3,195,436  ..............
        West Virginia.......................................       1,938,798         903,730         289,394           30.77       2,420,000  ..............
    Region 4................................................      29,591,145      18,954,422               0           33.48      25,329,569  ..............
        Alabama.............................................       3,823,967       3,696,461  ..............           48.33       2,500,000  ..............
        Florida.............................................       7,233,935       2,617,511  ..............           18.09       4,279,886  ..............
        Georgia.............................................       4,123,419       4,040,060  ..............           48.99       3,687,500  ..............
        Kentucky............................................       1,809,701       1,309,020  ..............           36.17       1,340,853
        Mississippi.........................................       2,318,816       1,521,486  ..............           32.81       1,936,342  ..............
        North Carolina......................................       4,253,671       2,399,006  ..............           28.20       5,149,520  ..............
        South Carolina......................................       2,669,936       1,320,078  ..............           24.72       3,317,468  ..............
        Tennessee...........................................       3,357,700       2,050,800  ..............           30.54       3,118,000  ..............
    Region 5................................................      24,931,917      11,509,247       4,558,027           30.80      22,249,984  ..............
        Illinois............................................       5,580,907       3,608,501       1,479,486           45.58       2,927,069  ..............
        Indiana.............................................       3,365,504       1,200,538         497,218           25.22       4,288,816              87
        Michigan............................................       4,709,793       2,504,359       1,192,078           39.24       3,034,000  ..............
        Minnesota...........................................       2,972,911       1,294,766         455,809           29.44       3,547,586              78
        Ohio................................................       5,184,208       1,981,083         553,436           24.44       3,852,513              86
        Wisconsin...........................................       3,118,594         920,000         380,000           20.84       4,600,000              88
    Region 6................................................      17,990,977       4,333,511       1,184,259           28.34      11,282,574  ..............
        Arkansas............................................       2,179,451       1,376,311         415,921           41.12         991,384              41
        Louisiana...........................................       2,791,271         673,366         121,206           28.47       1,581,860              93
        New Mexico..........................................       1,862,907         331,978         107,487           23.59       1,244,156              75
        Oklahoma............................................       2,415,000         531,156         137,871           27.70       1,764,007  ..............
        Texas...............................................       8,742,348       1,420,700         401,774           20.85       5,701,167              75
    Region 7................................................       6,752,153       4,277,632       1,152,392           38.98       6,945,990  ..............
        Iowa................................................       1,600,520       1,094,279         364,760           45.58           5,000  ..............
        Kansas..............................................       1,511,233         850,063         212,712           35.16       3,230,491  ..............
        Missouri............................................       2,295,781       1,712,376         428,095           46.62       1,954,000  ..............
        Nebraska............................................       1,344,619         620,914         146,825           28.55       1,756,499  ..............
    Region 8................................................      11,212,298       4,176,758       1,244,091           28.98      11,553,304  ..............
        Colorado............................................       2,899,310       1,079,936         152,671           21.26       3,949,354  ..............
        Montana.............................................       1,621,942         693,757         222,002           28.23       2,173,008  ..............
        North Dakota........................................       1,524,180         651,240         201,884           27.99       2,137,116  ..............
        South Dakota........................................       1,569,201  ..............            0.00  ..............  ..............
        Utah................................................       2,121,554         978,743         431,343           33.23       2,373,456  ..............
        Wyoming.............................................       1,476,111         773,082         236,191           34.19         920,370  ..............
    Region 9................................................      21,734,734      10,460,851       1,968,488           48.28      12,300,869  ..............
        Arizona.............................................       3,123,049       4,104,686         416,372           72.38          45,308  ..............
        California..........................................      13,350,374       3,599,274         690,715           16.07       6,735,231  ..............
        Hawaii..............................................       1,676,149       1,338,168         431,158           52.78       2,022,655  ..............
        Nevada..............................................       1,992,530         646,106         201,491           21.27       3,036,516  ..............
        American Samoa......................................         431,942         243,092          46,176           66.97          10,756  ..............
        Guam................................................         589,350         299,847         117,248           70.77          84,365  ..............
        CNMI................................................         471,340         202,678          62,628           56.29         366,038  ..............
        FSM.................................................          50,000  ..............  ..............            0.00  ..............  ..............
        RMI.................................................          50,000          27,000           2,700           29.70          20,300  ..............
    Region 10...............................................       8,145,765       4,618,233       1,424,032           42.81      10,249,263  ..............
        Alaska..............................................       1,173,241       1,223,577         429,905           70.47         693,000  ..............
        Idaho...............................................       1,501,310       1,090,683         368,881           48.61       1,543,055              63
        Oregon..............................................       2,205,226         721,252         274,074           22.57       3,415,126              79
        Washington..........................................       3,265,988       1,582,721         351,172           29.61       4,598,082  ..............
    --------------------------------------------------------------------------------------------------------------------------------------------------------

        Question. What percentage of fiscal year 2003 and fiscal year 2004
    EMPG are being used for homeland security activities nationally? Please
    provide this information for each State.
        Answer. State and local entities have not been required to maintain
    detailed reports which segregate their program expenditures on a
    percentage-of-use basis.
        That being said, FEMA would contend that very nearly all of the
    State and local emergency management agencies' resources are being used
    for all-hazards preparedness activities, including terrorism. The
    capabilities developed and maintained in such areas as training,
    exercising, command and control, communications, and even
    administration are essential for homeland security (as broadly defined)
    as well as for hurricanes, earthquakes, floods, hazardous materials
    accidents, plane crashes--any and all mass-casualty situations.
        Question. On what equipment, training and exercises were the fiscal
    year 2003 fire grants spent? What was requested?
        Answer. Below is a list of eligible equipment and training under
    the Assistance to Firefighters Grant Program. Approximately $440
    million to $460 million was expended in fiscal year 2003 on these kinds
    of items. These represent 80-85 percent of the activities supported for
    and applied for under the Fire Operations and Firefighter Safety and
    Emergency Medical Services (EMS) program areas. The Fire Operations and
    Firefighter Safety program area is the largest request area in the
    program, representing 13,888 of the 20,136 applications initially
    submitted, and nearly $1.377 billion of the $2.468 billion (inclusive
    of non-Federal share) requested. EMS applications totaled 216 for
    $14,145,120.

                          Basic Firefighting Equipment

    Adapters, Wyes, & Siamese
    Foam eductors and foam concentrate
    Hose--(3\1/2\ inches or less)
    Hose--Large Diameter (LDH 4 inches or larger)
    Hydrant and spanner wrenches
    Ladders
    Nozzles
    Portable deluge sets
    Power saws
    Ropes, harnesses, carabineers, pulleys, etc.
    RIT pack
    Wildland
    Other basic equipment
                                 Communications
    Base station
    Computer aided dispatch (CAD)
    Computers
    Headsets
    Mobile radios
    Mobile date terminal (MDT)
    Pagers
    Two-way pagers
    Portable radios
    Repeaters
    Other communications
                                      EMS
    ALS airway equipment
    BLS airway equipment
    Suction
    Automated external defibrillators (AED)
    Defibrillator/monitor
    Blood pressure cuffs
    Pen lights
    Pulse oximeters
    Stethoscopes
    Thermometers
    Backboards
    Cervical collars
    Splints
    Vest extrication devices
    Other EMS

                                   EMS/Rescue

    AEDs
    Powered/mechanical extrication tools/equipment
    Stretchers, backboards, splints, etc.
    Technical rescue equipment
    Various supplies
    Other EMS/rescue

                          Hazardous Materials (Hazmat)

    Computers
    Decontamination, clean-up, containment, and packaging equipment
    Monitoring and sampling devices
    Reference library
    Spark-proof tools
    Suppression
    Other Hazmat

                                 Investigation

    Cameras
    Lights, portable
    Computers
    Monitoring and sampling devices
    Hand tools
    Other investigation

                                  Specialized

    All-terrain vehicles
    Rehab equipment
    Compressors/cascade/fill station (fixed)
    Skid unit
    Compressors/cascade/fill station (mobile)
    Thermal imaging devices
    Fixed generator
    Washer
    Portable/mobile generator
    Boats (13 feet in length and under)
    Portable pump
    Other specialized

                    PERSONAL PROTECTIVE EQUIPMENT (PPE) LIST

                                   Structural
    Helmets
    Pants, coats
    Boots
    Goggles
    Gloves
    Hoods
    PASS devices
    Accountability systems
    Flashlights
    Complete set of turnout
    Hearing protection

                                  Respiratory
    Self-contained breathing apparatus (SCBA)--30 minutes with face piece--
    no extra bottle
    SCBA--30 minutes with face piece--with extra bottle
    SCBA--45 minutes with face piece--no extra bottle
    SCBA--45 minutes with face piece--with extra bottle
    SCBA--60 minutes with face piece--no extra bottle
    SCBA--60 minutes with face piece--with extra bottle
    Spare cylinders-30 minutes
    Spare cylinders-45 minutes
    Spare cylinders-60 minutes
    Face pieces
    Respirators
    Air-line units

                                    Wildland
    Helmets
    Boots
    Goggles
    Gloves
    Pants, coats
    Jumpsuits/coveralls
    Accountability systems
    Shelters
    Canteens

                       Weapons of Mass Destruction (WMD)
    SCBA/chemical/biological/radiological/nuclear environment respirators
    Chemical/Biological Suits (Must conform to NFPA 1994, 2001 edition)
    Other WMD-related PPE

                                   Other PPE
    Encapsulated Suits
    Tyveck suits
    Splash suits
    Escape masks
    Proximity and entry suits
    Wet and dry suits
    Infection control

                          TRAINING PROGRAM TITLES LIST
    Operations (NFPA 472)
    Firefighter I, Firefighter II (NFPA 1001)
    Instructor Training (NFPA 1041)
    Driver/Operator (NFPA 1002)
    Officer Training (NFPA 1021)
    Basic Wildland Firefighting
    Wildland Firefighter Certification
    Airport Rescue Firefighting (ARFF) (NFPA 1003)
    RIT Training
    Confined Space Rescue--Awareness level
    Vehicle Rescue
    Technical Rescue/Urban Search and Rescue--Awareness level (NFPA 1670/
    1006)
    Technical Rescue/Urban Search and Rescue--Operations level (NFPA 1670/
    1006)
    Technical Rescue/Urban Search and Rescue--Technician level (NFPA 1670/
    1006)
    Hazmat--Technician/Specialist level
    Infection Control (NFPA 1581)
    Medical First Responder Training
    Emergency Medical Technician--Basic (EMT B)
    Emergency Medical Technician--Intermediate (EMT I)
    Paramedic Training (EMT-P)
    Mass Casualty Incident Training (MCI)
    NIIMS (Unified Command)
    Incident Management Course (IMC)
    Integrated Emergency Management Course (IEMC)
    Fire Inspector (NFPA 1031)
    Fire Investigator (NFPA 1033)
    Fire Educator (NFPA 1035)
    Telecommunications/Dispatcher
    Safety Officer

        Question. TOPOFF 2 highlighted the fact that a large-scale
    bioterrorism attack does not qualify as a Major Disaster under the
    Stafford Act. How did the Emergency declaration differ from the
    response and resources that a Disaster would have triggered? Is a
    legislative change to the Stafford Act necessary? Will you request such
    a change?
        Answer. The scenario in TOPOFF 2 did result in an emergency
    declaration. The Stafford Act provides authority for the President to
    declare either a major disaster or an emergency, as a situation may
    warrant. In the case of TOPOFF 2, where the nature of the incident was
    not one contemplated for major disaster declarations, an emergency
    declaration was determined to be appropriate. The emergency declaration
    makes available the same response resources and assistance as would be
    available for a major disaster. It also makes available assistance for
    individuals under the Individuals and Households Program. The primary
    difference in assistance that would be available under a major
    disaster, but not for an emergency declaration, is assistance for the
    repair, replacement, and restoration of public facilities that sustain
    physical damage from the event. This was not a factor in the
    bioterrorism attack in TOPOFF 2, nor would it be expected to be a
    factor in such types of events in general. In contrast, should a
    terrorist event also include fire or explosion, it then would be within
    the type of event contemplated as a major disaster under the Act; as a
    practical matter, public assistance would then be available to address
    physical damages likely to occur in such cases. Accordingly, it is
    FEMA's position that the types of events that are addressed by major
    disaster or emergency declarations, respectively, are adequate and
    appropriate to the types of assistance available under the respective
    declaration authorities of the Stafford Act.
        Question. What is currently contained in the Strategic National
    Stockpile? How will fisccal year 2004 and proposed fiscal year 2005
    funds be spent? How much anthrax vaccine is needed? From where will the
    Department procure the needed anthrax vaccine, and how long will the
    process take?
        Answer. The Strategic National Stockpile currently contains anthrax
    exposure treatments, smallpox vaccine, nerve agent treatment, and
    radiation countermeasures, as well as a limited amount of botulinum
    antitoxin.
        Proposed Stockpile funding for fiscal year 2004 and fiscal year
    2005 will be used to sustain its 12-Hour Push Packages and Vendor
    Managed Inventory, to increase stocks for anthrax antibiotics and
    vaccine, to purchase smallpox vaccine, and to develop botulinum
    antitoxin plasma. The Weapons of Mass Destruction (WMD) Medical
    Countermeasures subcommittee, an interagency group co-chaired by the
    Department of Health and Human Services (HHS), DHS, and the Department
    of Defense, has recommended the eventual procurement of enough anthrax
    vaccine to inoculate 25 million people.
        HHS will be the procurement agent for the anthrax vaccine and will
    request proposals for the vaccine development. The time requirement for
    the actual procurement of the vaccine will be dependent on clinical
    trials and Food and Drug Administration (FDA) licensure processes.
        The Stockpile currently maintains a small amount of the only FDA-
    licensed pre-exposure vaccine against anthrax (Anthrax Vaccine
    Adsorbed, or AVA). Currently, it has limited production capacity, and
    rectifying that problem would be very expensive and take several years
    to accomplish. AVA is not currently licensed for children or for the
    elderly. However, in order to ensure that some type of anthrax vaccine
    is available until the development and procurement of rPA, DHS and HHS
    have signed an interagency agreement for the purchase of AVA through
    the Department of the Army. This agreement will provide approximately 2
    million doses in fiscal year 2004, 1.5 million doses in fiscal year
    2005, and 1.5 million doses in fiscal year 2006.
        Question. Please detail how the fiscal year 2004 and fiscal year
    2005 proposed funding for Project BioShield will be spent.
        Answer. Over the past 10 months, the WMD Medical Countermeasures
    subcommittee has developed countermeasures information of interest to
    administration policymakers who will make the BioShield procurement
    decisions. The WMD subcommittee commissioned an end-to-end analysis of
    medical countermeasures to Category ``A'' biological agents (anthrax,
    smallpox, plague, botulinum toxin, tularemia, Ebola, and other
    hemorrhagic fever viruses). Working groups developed initial
    requirements for four high-priority bioweapon countermeasures for which
    there is high need and a reasonable expectation that products will be
    available in the near term:
      --Next generation anthrax vaccine (recombinant Protective Antigen,
            rPA)
      --Anthrax immune therapy
      --Next generation smallpox vaccine (modified vaccinia, MVA or LC16m8)
      --Botulinum antitoxin
        Question. Provide the status of the Disaster Relief Fund. What are
    the carryover funds from fiscal year 2004, current balance?
        Answer. As of March 10, 2004, the unobligated balance in the
    Disaster Relief Fund was $1.813 billion. The fiscal year 2005 budget
    request includes an estimated carryover of $453 million from fiscal
    year 2004 into fiscal year 2005.
        Question. What is the justification for requesting $0 for the
    Metropolitan Medical Response System? Provide a legislative history of
    MMRS, including its genesis and original intent. What costs are
    incurred by EP&R, and what costs are incurred by local governments?
    What will EP&R's role be in the MMRS if no funds are appropriated in
    fiscal year 2005? How many cities are expected to continue the program
    without Federal resources support?
        Answer. The funds that Congress has appropriated for the
    Metropolitan Medical Response System (MMRS) over the last several years
    have been used to establish certain capabilities, to get the program up
    to its baseline, and to facilitate transfer of the program to the
    localities for continuation, once the baseline is established. We will
    reach the baseline this fiscal year (2004), and therefore no additional
    funding is being requested. Since 1995, the Federal Government has
    publicly articulated a necessity to improve planning and response to
    acts of terrorism involving WMD. The Defense Against Weapons of Mass
    Destruction Act of 1996, Public Law 104-201, states in Section 1412--
    Emergency Response Assistance Program, paragraph (h)(2), ``Of the
    amount available for the program pursuant to paragraph (1), $10,500,000
    is available for use by the Secretary of Defense to assist the
    Secretary of Health and Human Services in the establishment of
    metropolitan emergency medical response teams (commonly referred to as
    `Metropolitan Medical Strike Force Teams') to provide medical services
    that are necessary or potentially necessary by reason of a use or
    threatened use of a weapon of mass destruction.''
        In 1997, HHS initiated the MMRS program to provide support for the
    development of a response system in the event of a terrorist attack. On
    March 1, 2003, the MMRS program was transferred to DHS.
        DHS is responsible for sponsoring the MMRS program, a system-based
    approach to mass casualty/surge capacity preparedness and response,
    developed to enhance existing local first responder, medical, public
    health, and emergency planning in the event of a terrorist attack.
    Through contracts administered by FEMA, DHS is responsible for
    providing funding and technical assistance to plan, develop, equip, and
    identify training to local governments in 125 identified jurisdictions,
    based on threat and population.
        MMRS program duties have been absorbed as additional duties by
    existing FEMA staff. Costs to absorb these duties include approximately
    $770,000 to fund regional salaries, set at 50 percent of the time for
    18 staff members currently administering the program; approximately
    $408,000 to fund two staff years at the Noble Training Center and two
    staff years at headquarters; and an estimated $350,000 for travel.
    There are no cost-sharing requirements for local governments.
        Secretary Ridge has proposed a reorganization (a letter was sent to
    Members of Congress on January 26, 2004), wherein the MMRS program for
    fiscal year 2004 will be transferred to a newly established Office of
    State and Local Government Coordination and Preparedness. Under this
    arrangement, FEMA would have no further role in the MMRS program for
    fiscal year 2004, and there will be no Federal program in fiscal year
    2005.
        We cannot precisely estimate the number of local jurisdictions that
    would continue the MMRS program without Federal resources support. We
    are fairly certain that a large number of them, as an element of
    prudent preparedness and operational necessity, will attempt to
    maintain MMRS-type mass casualty integrated response preparedness and
    seek to use Federal funds from other programs to support eligible
    portions of MMRS-type capabilities.
        Question. Provide specific examples of capacity at the Department
    of Housing and Urban Development that FEMA does not have for operating
    the Emergency Food and Shelter program.
        Answer. The Department of Housing and Urban Development (HUD) is
    the primary Federal agency responsible for the administration of
    homeless assistance programs. While FEMA has successfully administered
    the Emergency Food and Shelter (EFS) program over the years, there are
    ways that the program could be improved by moving it to HUD.
    Specifically, the following examples demonstrate the capacity of HUD to
    operate the program:
      --HUD, as mandated by Congress, is currently assessing all homeless
            assistance programs to determine the need for structural
            changes to the programs in order to address the President's
            goal to end homelessness in the next 10 years. The EFS program
            is the only homeless assistance program not included in this
            assessment. In order to ensure an integrated approach to
            assisting persons facing housing emergencies and to meet this
            goal, it would be more logical for the program to be
            administered by HUD. FEMA does not have the capacity to perform
            this requirement.
      --HUD is able to link housing and supportive services for chronically
            homeless persons to other comprehensive services through its
            numerous other homeless assistance programs and mainstream
            housing programs. FEMA does not have any other homeless
            assistance programs.
      --HUD has the staffing and financial resources to improve the
            administration and delivery of the EFS program.
      --HUD has the capacity to ensure that homeless assistance/prevention
            programs are not duplicative, allowing for scarce resources to
            be utilized more efficiently and effectively. Currently, the
            EFS program provides funding to the same agencies that HUD
            programs fund for the same services and individuals. FEMA does
            not have the capacity to monitor which agencies are duplicating
            services.
      --As FEMA's mission evolves under the Department of Homeland
            Security, its resources must be focused entirely on natural
            disasters and catastrophic events, such as the terrorist
            attacks of 9/11. The EFS program does not fit within the goals
            and objectives of DHS or of FEMA.
        Question. How many staff vacancies do you have in EP&R at this
    time?
        Answer. Vacancies in directly funded programs total 256. This
    excludes the Disaster Relief Fund and 88 newly funded positions in the
    Mitigation program for Flood Map Modernization and Pre-disaster
    Mitigation activities.
        Question. Provide the numbers of FTE that have been detailed and
    transferred out of FEMA since the Department was created. From which
    offices were the transfers made, and to which offices did FTE go?
        Answer. In fiscal year 2003, there were 200 FTE budgeted for FEMA's
    Office of Inspector General, which transferred in its entirety to the
    Department. The only transfers of positions that have occurred are
    those positions associated with the Office of Inspector General; no
    other FEMA positions have been transferred. FEMA has documented
    approximately 85 FTE details since March 1, 2003, to various components
    of the Department.
        Question. Provide the number of positions (filled and unfilled) and
    the Salaries and Expense funds spent within each FEMA office, before
    February 1, 2003 and currently. Please indicate which positions are in
    the regional offices and the headquarters offices. Do not include EP&R
    FTE detailed out of the Directorate.
        Answer. The tables below provide the positions and Salaries and
    Expense in FEMA as of February 1, 2003, and as of February 21, 2004.

                                  FEBRUARY 2003
    ------------------------------------------------------------------------
                                                    Positions
    ------------------------------------------------------------------------
              Organization           Encumbered   Vacant  TOTAL \1\    S&E
    ------------------------------------------------------------------------
    Office of Director.............         15         4        19      $968
    National Security..............         27        20        47       905
    General Counsel................         31         3        34     1,184
    Equal Rights...................         10         0        10       283
    Regional Operations............          3         0         3       107
    Inspector General..............    ( \2\ )   ( \2\ )   ( \2\ )   ( \2\ )
    External Affairs...............         52         7        59     1,853
    Administration & Resource                4         1         5       210
     Planning \3\..................
    Human Resources................         62         2        64     2,103
    Financial & Acquisition                130        21       151     4,365
     Management....................
    Facilities Management..........         64         7        71     7,876
    Response & Recovery............        327        69       396    12,675
    Fed. Insurance & Mitigation....        153        27       180     5,607
    U.S. Fire Administration.......        196         7       203     6,272
    National Preparedness..........         74         7        81     2,759
    Information Technology.........        191        17       208     6,867
                                    ----------------------------------------
          Subtotal Headquarters....      1,339       192     1,531    54,033
                                    ----------------------------------------
          Subtotal Regions.........        771        45       816    25,991
                                    ----------------------------------------
          TOTAL....................      2,110       237     2,347    80,024
    ------------------------------------------------------------------------
    \1\ In 2003, encumbered total excludes positions funded under Disaster
      Relief and the Working Capital Fund.
    \2\ Inspector General (IG) personnel activity was handled by Bureau of
      Public Debt. In fiscal year 2004, the entire IG office was transferred
      to the Department of Homeland Security.
    \3\ Office abolished in 2003.

                                  FEBRUARY 2004
    ------------------------------------------------------------------------
                                                    Positions
    ------------------------------------------------------------------------
              Organization           Encumbered   Vacant  TOTAL \1\    S&E
    ------------------------------------------------------------------------
    Office of the Under Secretary..         22         4        26    $1,022
    National Security..............         38        12        50     1,579
    General Counsel................         32         3        35     1,221
    Equal Rights...................          9         1        10       275
    Regional Operations............          3         1         4       106
    External Affairs...............         40        14        54     1,643
    Human Resources................         55        10        65     1,711
    Financial & Acquisition                140        16       156     4,504
     Management....................
    Facilities Management..........         60         8        68     8,009
    Recovery.......................         73         7        80     2,939
    Mitigation.....................        148        32       180     5,662
    Preparedness...................        249        38       287     8,006
    Response.......................        314        51       365    13,582
    Information Technology.........        174        22       196     7,013
                                    ----------------------------------------
          Subtotal Headquarters....      1,357       219     1,576    57,272
                                    ----------------------------------------
          Subtotal Regions.........        770        37       807    25,966
                                    ----------------------------------------
          TOTAL....................      2,127       256     2,383    83,238
    ------------------------------------------------------------------------
    \1\ In 2004, encumbered total excludes positions funded under Disaster
      Relief, National Disaster Medical System, and the Working Capital
      Fund.

        Question. Also please provide the number of Senior Executive
    Service positions which FEMA had on Feb. 1, 2003 and the number it has
    now. Please include the filled and vacant, indicate political and
    career and the division or department. If a position has been moved,
    indicate where it was located before and to where it has been
    transferred.
        Answer. The tables that follow provide the number of Senior
    Executive Service (SES) positions in FEMA. FEMA has a set number of SES
    slots that the Under Secretary can use for any SES position. Each time
    an SES position becomes vacant, the slot returns to the Under
    Secretary's ``SES pool'' and the Under Secretary can reallocate it to
    another FEMA organization based on a determination of the most critical
    SES need. As the charts indicate, from February 2003 to March 2004,
    some SES positions were realigned to best support new mission critical
    responsibilities.
        There was no net change in the number of FEMA's allocated SES slots
    between February 2003 and March 2004. In February 2003, FEMA's
    allocation was 54 permanent slots and one term allocation for a total
    of 55 slots.
        As a result of FEMA's transition into DHS, 2 slots were transferred
    (the only 2 SES slots transferred outside of FEMA) to the DHS Office of
    the Inspector General (OIG). Although OIG originally had three
    incumbents, one had retired. However, DHS provided 2 slots from its
    overall allocation to FEMA for 2 positions in the Office of the Under
    Secretary.
        The term appointee in the Information Technology Services Division,
    identified in the February 2003 order, resigned and the one slot was
    lost. However, again as a result of transitional activities, one slot
    was transferred to FEMA from the Department of Health and Human
    Services as an encumbered position. Therefore, FEMA's allocation was
    then and is now 55 slots.

                                    FEBRUARY 2003 FEDERAL EMERGENCY MANAGEMENT AGENCY
    ----------------------------------------------------------------------------------------------------------------
                                                            Encumbered  Encumbered  Encumbered
                         Organization                         Career    Non-Career     Term       Vacant     Total
    ----------------------------------------------------------------------------------------------------------------
    Office of the Director................................           2           1  ..........          1          4
    Office of National Security Coordination..............  ..........  ..........  ..........          1          1
    Office of the General Counsel.........................  ..........  ..........  ..........          2          2
    External Affairs Division.............................  ..........           1  ..........          2          3
    Administration & Resource Planning Division...........  ..........           1  ..........  .........          1
    Human Resources Division..............................  ..........           1  ..........  .........          1
    Finance & Acquisition Management Division.............           2  ..........  ..........  .........          2
    Facilities Management & Services Division.............           2  ..........  ..........  .........          2
    Mt. Weather Emergency Operations Division.............           1           1  ..........  .........          2
    Response & Recovery Directorate.......................           5           1  ..........      \2\ 2          8
    Federal Insurance & Mitigation Directorate............           6  ..........  ..........  .........          6
    U.S. Fire Administration..............................           2           1  ..........  .........          3
    Office of National Preparedness.......................           1  ..........           1  .........          2
    Office of the Inspector General \1\...................           3  ..........  ..........  .........          3
    Information Technology Services Division..............           5           1           1  .........          7
    Region 1..............................................  ..........           1  ..........  .........          1
    Region 2..............................................  ..........  ..........  ..........          1          1
    Region 3..............................................  ..........  ..........  ..........          1          1
    Region 4..............................................           1  ..........  ..........  .........          1
    Region 5..............................................  ..........           1  ..........  .........          1
    Region 6..............................................  ..........           1  ..........  .........          1
    Region 7..............................................  ..........           1  ..........  .........          1
    Region 8..............................................  ..........           1  ..........  .........          1
    Region 9..............................................  ..........           1  ..........  .........          1
    Region 10.............................................  ..........           1  ..........  .........          1
                                                           ---------------------------------------------------------
          Total...........................................          30      \4\ 15           2          8     \3\ 57
    ----------------------------------------------------------------------------------------------------------------
    \1\ Determination order of February 2003 did not include OIG SES members since they received personnel services
      from the Bureau of Public Debt.
    \2\ Two additional vacancies were listed on determination order (which were subsequently canceled).
    \3\  SES slots allocation (maximum number that could be filled) was 55.
    \4\ Ceiling of 19 non-career (political).

                                  MARCH 10, 2004 DEPARTMENT OF HOMELAND SECURITY (FEMA)
    ----------------------------------------------------------------------------------------------------------------
                                                            Encumbered  Encumbered  Encumbered
                         Organization                         Career    Non-Career     Term       Vacant     Total
    ----------------------------------------------------------------------------------------------------------------
    Office of the Under Secretary--Emergency Preparedness            3           2  ..........          2          7
     & Response...........................................
    Office of National Security Coordination..............  ..........           1  ..........  .........          1
    Office of the General Counsel.........................  ..........  ..........  ..........          1          1
    Office of External Affairs Coordination...............  ..........  ..........  ..........          1          1
    Human Resources Division..............................  ..........  ..........  ..........          1          1
    Finance & Acquisition Management Division.............           2  ..........  ..........          1          3
    Facilities Management & Services Division.............           1  ..........  ..........          1          2
    Mt. Weather Operations................................           2           1  ..........  .........          3
    Response Division.....................................           3  ..........           1          2          6
    Recovery Division.....................................           2           1  ..........          2          5
    Mitigation Division...................................           4  ..........  ..........          2          6
    Preparedness Division.................................           2           1  ..........          1          4
    Information Technology Division.......................           5  ..........  ..........  .........          5
    Region 1..............................................  ..........  ..........  ..........          1          1
    Region 2..............................................  ..........  ..........           6          1          1
    Region 3..............................................  ..........  ..........  ..........          1          1
    Region 4..............................................           1  ..........  ..........  .........          1
    Region 5..............................................  ..........           1  ..........  .........          1
    Region 6..............................................  ..........           1  ..........  .........          1
    Region 7..............................................  ..........           1  ..........  .........          1
    Region 8..............................................  ..........           1  ..........  .........          1
    Region 9..............................................  ..........           1  ..........  .........          1
    Region 10.............................................  ..........           1  ..........  .........          1
                                                           ---------------------------------------------------------
          Total...........................................          25      \1\ 12           1         17         55
    ----------------------------------------------------------------------------------------------------------------
    \1\ Ceiling of 19 non-career available for fill.

        Question. Please describe how the amounts of CAP-SSSE funds
    provided to each State are determined. Describe the States'
    responsibilities and how they've changed, if at all, in recent years.
    As income associated with the Federal policy fee has increased, have
    funds provided by FEMA to the States increased proportionally?
        Answer. The purpose of the Community Assistance Program--State
    Support Services Element (CAP-SSSE) is to provide, through a State
    grant mechanism, a means to ensure that communities participating in
    the National Flood Insurance Program (NFIP) are achieving the flood
    loss reduction objectives of the NFIP. CAP-SSSE is intended to
    accomplish this by funding States to provide technical assistance to
    NFIP communities and to evaluate community performance in implementing
    NFIP floodplain management activities with the goal of building
    community and State floodplain management expertise and capability.
    Using CAP-SSSE funding, States now provide a significant portion of the
    technical assistance to NFIP communities. Without this State support,
    FEMA regions would not have enough staff to implement the program. CAP-
    SSSE capitalizes on partnering with the staff of State agencies to
    provide this assistance.
        CAP-SSSE grant fund allocations to States are determined by the
    FEMA regional offices. In general, States are provided a baseline
    funding amount to develop basic floodplain management capabilities to
    assist the FEMA regions in providing technical assistance to
    communities. After the baseline amount is established, other factors
    such as the number of participating communities in the State,
    population growth rate, and number of NFIP insurance policies, as well
    as each State's capability to provide assistance and overall technical
    support needs, are considered in determining the final allocations. All
    States participate in the program and receive funds in varying amounts.
    FEMA regional offices and the designated State agency negotiate a CAP-
    SSSE agreement that specifies activities and products to be completed
    by a State in return for CAP-SSSE funds. There is a 25 percent non-
    Federal match for all States receiving CAP-SSSE funds. In some cases, a
    State's ability to provide the required funding match may affect
    funding levels.
        In recent years, States' responsibilities have been changing in
    order to support nationwide map modernization implementation.
    Specifically, States have been more involved in map modernization
    planning activities to assist in implementing this important
    initiative. Finally, CAP-SSSE grant funds are not directly linked to
    Federal policy fee income. However, total CAP-SSSE funds have increased
    by 40 percent over the past 2 years to assist States in their
    floodplain management activities and in meeting the challenges of map
    modernization.
        Question. When will DHS release 2004 CAP-SSSE funds to the FEMA
    Regions for distribution to the states?
        Answer. Fiscal year 2004 CAP-SSSE funds were released to the FEMA
    regions in November 2003. Many States have already received their
    fiscal year 2004 CAP-SSSE funding allocation. Some of the FEMA regions
    are still negotiating with the States regarding the content of the
    State Work Plans. Once the State Work Plans are finalized and approved,
    the remaining funds will be awarded.
        Question. Are all of the Federal Personnel paid with funds
    collected from the Federal Policy fee working directly on National
    Flood Insurance Program projects?
        Answer. Yes. Each year we carefully monitor the program assignments
    paid from the National Flood Insurance Fund to ensure that those
    Federal employees are performing NFIP work.
        Question. Describe how DHS and HUD are working together to assure
    that HUD regulations address installation of manufactured homes
    specifically in flood hazard areas.
        Answer. On December 27, 2000, the Manufactured Housing Improvement
    Act (MHIA) became law (Public Law No. 106-569) and for the first time
    established a requirement that HUD develop national model manufactured
    home installation standards. DHS has participated in this development
    process by submitting to the non-Federal consensus committee,
    established by the MHIA, proposed flood disaster-resistant provisions,
    consistent with NFIP, which would apply to manufactured homes sited in
    flood hazard areas. On December 18, 2003, the consensus committee
    approved DHS' proposed provisions and included them in the final
    recommended national model manufactured home installation standards
    submitted to the HUD Secretary. In accordance with the law, the HUD
    Secretary has 1 year (December 18, 2004) in which to act on these
    recommended standards.
        Question. Will DHS coordinate with HUD to include in existing
    Federal regulations (24 CFR Part 3282.303(c)), a requirement that State
    administrative agency plans must require licensed installers and/or
    dealers to determine whether a proposed manufactured housing site is
    located in a FEMA identified flood hazard area before installation?
        Answer. Changes to 24 CFR Part 3282.303(c) are not anticipated by
    HUD. Rather, under the MHIA, State installation programs for their
    licensed installers and/or dealers must include standards that meet or
    exceed the protection provided by the national model manufactured home
    installation standards that are currently being developed by HUD. A key
    provision of the model standards reads, ``Prior to the initial
    installation of a manufactured home, it shall be determined whether the
    home site lies wholly or partly within a special flood hazard area.''
    In this way, States will be fulfilling 3282.303(c) in assuring that
    homes are properly installed in their States.
        Question. Will DHS coordinate with HUD to require manufacturers
    installation manuals to specifically state whether model installation
    designs are intended for use in flood hazard areas?
        Answer. Under the MHIA, manufacturers shall provide with each home
    designs and instructions for the installation of the manufactured home
    that have been approved by a design approval primary inspection agency
    (DAPIA). Once the national model installation standards have been
    established, DAPIAs may not issue approvals unless the designs and
    instructions for installation provide equal or greater protection than
    the protection provided under the national model standards. A key
    provision in the new national model installation standards is that
    manufactured homes located wholly or partly within flood hazard areas
    shall be installed using methods and practices that minimize damage in
    accordance with the flood damage reduction requirements contained in
    the NFIP regulations. Specific to foundation systems used in the
    manufacturers' instructions, the standards also require that, in flood
    hazard areas, the piers, anchoring, and support systems shall be
    capable of resisting loads associated with design flood and wind
    events.
        Question. What priority are you giving to preparing new floodplain
    delineations to replace or refine approximated flood hazard areas,
    rather than simply converting them to a digital format? How much of the
    fiscal year 2005 request for flood map modernization will be spent on
    preparing new floodplain delineations? On digitization of existing
    paper maps?
        Answer. FEMA's current priority is working with States and local
    governments to identify those communities at greatest risk and to
    provide updated geospatial data. The long-term performance goal for the
    Multi-Hazard Flood Map Modernization Program is for the U.S. population
    to have up-to-date digital flood hazard data and maps for flood-prone
    areas. FEMA is developing flood data and producing maps for communities
    that reflect the level of analysis and effort commensurate with the
    flood risk faced by each community. Part of the mapping process
    involves a needs assessment during which FEMA works with the local
    community to determine mapping needs and to assess whether existing
    local data are sufficiently accurate to meet local needs and NFIP
    criteria. All assessments will be coordinated with States, regional
    agencies, and local communities.
        During the next 6 months, FEMA will be working with national,
    State, and local partners and stakeholders to assemble an integrated 5-
    year implementation plan for the Multi-Hazard Flood Map Modernization
    Program. We will use the plan to establish goals and baseline with
    existing priorities; to document and understand flood map update needs
    identified by State, regional, and local partners and stakeholders; and
    to develop prioritization criteria and a sequence for scoping counties
    and watersheds in the priority areas based on floodplain management,
    hydrologic, hydraulic, and terrain needs. The plan that will be
    developed is the MHIP for fiscal years 2004-2008.
        FEMA will provide a precise accounting of the new engineering
    studies and floodplain boundary delineations once we complete the
    development of the MHIP; will scope the map update projects identified
    in coordination with State, regional, and local partners and
    stakeholders; will determine the contributions that may be made by
    State, regional, and local partners through the Cooperating Technical
    Partners (CTP) program; and will contract the required map updates with
    our contractors and with participants in our CTP program.
        FEMA plans to update the flood maps based on the level of flood
    risk associated with an area and the accuracy of the existing data for
    that area. For some areas, there may not be a need to perform a new
    engineering study because the flood hazards and related risk are
    accurately portrayed on the flood map and are appropriate for the area.
    For example, for recently mapped areas, we will use the accurate
    available data to create a digital map.
        Our modernization effort is predicated on using the best available
    data and clear data standards. To that end, it is not our intention to
    convert inaccurate flood maps to a digital format.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

        Question. I have noted that the Emergency Preparedness and Response
    Directorate, which includes the Federal Emergency Management Agency
    (FEMA), has slowly shifted its emphasis from all-hazards to terrorism.
    The President's budget request includes legislative language that would
    give ``priority to homeland security activities.'' The intent of FEMA,
    however, was to insure broad-based, all-hazards approaches to State and
    local preparedness and response efforts. This shift is cause for great
    concern.
        I strongly believe that a reliable emergency infrastructure--
    adequately resourced at the Federal, State and local levels--must build
    upon the all-hazards emergency management approach and address the
    needs of the entire emergency system, including, but not limited to:
    law enforcement, fire, emergency medical services, public health, the
    911 communications system and emergency management. Currently, a
    greater focus on terrorism has increased the role of emergency managers
    and the immediate needs of all responders to ensure adequate
    preparedness. Meanwhile, natural hazards continue to be the pervasive
    disaster that occurs regularly. In 2003, for example, there were 56
    major disaster declarations, 19 emergency declarations and 46 fire
    suppression authorizations--none of which were terrorist-related.
        Mr. Brown, would you agree that natural disaster preparedness must
    not suffer as a result of homeland security efforts, but rather should
    be viewed as the most frequent opportunity to validate domestic
    preparedness efforts and to also build best practices? If not, please
    explain why you think our emergency response system must be focused on
    terrorism rather than all-hazards and how that benefits us.
        Answer. Although the Department of Homeland Security is focused on
    terrorism and protecting the homeland, the President, Secretary Ridge,
    and I are committed to an all-hazards approach of preparedness,
    response, and recovery from all events, including natural disasters.
    Recent efforts to improve response to and recovery from a terrorism
    event do not diminish FEMA's commitment to dealing with the destruction
    of a natural disaster--just the opposite. FEMA has enjoyed a long
    history of focusing on all hazards, and I believe that being part of
    DHS has strengthened that approach. As you mention, FEMA has
    successfully continued to respond to and recover from a multitude of
    natural disasters in the past year. At the same time, these efforts do
    provide us with opportunities to better prepare not only for terrorism
    events, but also for catastrophic events, whether they be natural or
    caused by terrorism.
        Question. The President's fiscal year 2005 budget request for the
    Department of Homeland Security (DHS) proposes changes to the Emergency
    Management Performance Grants (EMPG) Program that would severely impact
    State and local emergency management. In the fiscal year 2003
    Consolidated Appropriations law (Public Law 108-7), Congress called the
    EMPG Program ``the backbone of the Nation's emergency management
    system.'' In fiscal year 2004, Congress increased EMPG funding to $179
    million, directed that EMPG would remain in the Emergency Preparedness
    and Response Directorate where the focus is an all-hazards approach to
    emergency management, and ordered the continuation of funding personnel
    expenses.
        I was surprised to read, therefore, that the President's fiscal
    year 2005 request cuts EMPG funding by $9 million and also proposes a
    25 percent cap on the use of funds to support personnel salaries. Since
    the functions of emergency management are almost 100 percent personnel
    driven (i.e., planning, coordinating, exercise design, public
    education, and hazards at the State and local levels and would result
    in losses of 70 percent of their emergency management staff response to
    and recovery from actual incidents), this provision would have a
    devastating effect on emergency management agencies nationwide. The cap
    would eliminate current personnel responsible for planning for and
    responding to all
        Mr. Brown, now is the time when we should be building the capacity
    of our Nation's emergency management agencies. Why, then, is this
    Administration seeking to weaken it?
        Answer. The EMPG personnel cap is intended to ensure that State and
    local governments assume responsibility for their personnel costs.
    Effective State and local emergency management capability is not the
    primary responsibility of the Federal Government, rather, it is a
    shared responsibility. In exchange for absorbing some of these
    personnel costs, DHS will increase the amount of funding that goes to
    the State and local governments for training and exercises. If the
    State and local governments can reprioritize some of their monies to
    keep their personnel intact, then DHS will spend the funding freed up
    by that on training and exercises to make sure they are still capable
    of doing what DHS needs them to do. DHS feels that by imposing the
    personnel cap, the Department will be able to do more to build the
    capabilities of the States rather than weaken them.
        Question. I am very concerned about the state of the floodmap
    modernization program. I saw in your budget submission that almost $40
    million of fiscal year 2004 funds would be distributed this year.
    However, my home State of Vermont has received no funds thus far, and
    it appears that several of the state's grants requests have been acted
    upon very slowly if at all.
        You are asking for another $293 million this year for the program,
    yet I am beginning to question whether the benefits of this program are
    really flowing to the communities that need to update their maps, and I
    wonder whether the program is taking too broad an approach to be useful
    at the local level.
        Mr. Brown, can you please tell me specifically what this program is
    going to do for my home State of Vermont. Is FEMA going to stick to a
    verbal commitment made to the State to support its Fluvial Hazards Risk
    Assessment Initiative through Map Modernization funding opportunities?
    What is the status of Vermont's grant applications for other programs
    that will help prepare for flooding, such as the Pre-Disaster
    Mitigation program? Answer. FEMA's Mitigation Division administers two
    major programs that involve extensive coordination and planning with
    State and local officials--the Pre-Disaster Mitigation Program (PDM)
    and the Multi-Hazard Flood Map Modernization Program.
        FEMA's PDM fiscal year 2003 funds will be awarded on a competitive
    basis with a national priority on funding mitigation projects that
    address National Flood Insurance Program (NFIP) repetitive flood loss
    properties. The national evaluation of fiscal year 2003 PDM competitive
    grant applications submitted by the October 6th application deadline
    was completed on November 21, 2003. All projects funded under the PDM
    program must be cost-effective, consistent with environmental laws and
    regulations, and contribute to a long-term mitigation solution.
        The sub-applications identified for selection will be approved for
    funding in phases. We have approved a list of sub-applications
    identified as Phase I and Phase II. An application from North Troy,
    Vermont, The River Road Acquisition Project, is included in Phase II.
    FEMA's Region I staff soon will be contacting Vermont Emergency
    Management staff to discuss program and grants management requirements
    that must be addressed in order to make a final determination and to
    proceed with a grant award for this project. A final phase of PDM
    awards will follow later this spring. Because of the competitive nature
    of this program, details about the status of the remaining sub-
    applications cannot be released until funding decisions are made. At
    that time, I will provide an update to you. In fiscal year 2003,
    Vermont also received a $248,275 non-competitive planning grant to help
    the State and its local communities protect lives and property by
    developing multi-hazard mitigation plans.
        In addition, we have a number of Hazard Mitigation Grant Program
    (HMGP) projects that address flood hazards underway in Vermont. FEMA
    recently obligated $233,575 for 13 projects and planning grants in
    various Vermont communities with HMGP funds made available after
    disaster declaration DR-1428-VT (severe storms and flooding, July
    2002). The final project to be awarded under DR-1428-VT is in Richford,
    Vermont. FEMA is providing $54,375 for a project to relocate the town's
    water main from a precarious location under the river where it is
    subject to damage from ongoing scouring. The U.S. Army Corps of
    Engineers is the lead agency on this project. We are waiting to review
    their environmental assessment and expect, if there are no problems, to
    obligate funds this spring. Vermont Emergency Management currently is
    soliciting applications for HMGP projects that will be funded following
    disaster declaration DR-1488-VT (severe storms and flooding, September
    2003).
        Under the Multi-Hazard Flood Map Modernization Program, FEMA has
    provided $800,000 to fund flood map updates for Windsor County, Windham
    County, Washington County, and the Towns of Hinesburg, Stowe, and West
    Rutland. FEMA plans to distribute preliminary versions of the updated
    flood maps for Windsor and Windham Counties and the three towns during
    this summer. FEMA will send these preliminary versions to community and
    county officials, State officials, and other key stakeholders to
    facilitate a thorough review. The study being performed for Washington
    County, which is still in the scoping phase, includes a component of
    the Fluvial Hazard Morphology initiative, specifically, riverine
    erosion assessment protocol and tools developed by the Vermont Agency
    of Natural Resources.
        The FEMA regional office staff in Boston has a regional business
    plan that describes its 5-year strategic plan for executing the Multi-
    Hazard Flood Map Modernization Program. The Vermont Agency of Natural
    Resources has expressed an interest in taking some responsibility for
    managing local flood hazard data and is preparing its State business
    plan to identify the activities it desires to undertake and its 5-year
    flood map project priorities. FEMA will use this information to update
    the regional and National business plans for the Multi-Hazard Flood Map
    Modernization Program.
                                     ______

                    Questions Submitted by Senator Herb Kohl

                    EMERGENCY MANAGEMENT PERFORMANCE GRANTS

        Question. I am concerned about the Administration's budget cuts and
    policy changes to the Emergency Management Performance Grants. First, I
    disagree with the President's decision to move the grants from FEMA to
    the Office of Domestic Preparedness. No one in my State thinks this is
    necessary, and they are concerned that this diminishes the role and
    power of FEMA. FEMA was one of the most successful agencies to be
    folded into Homeland Security and it would be a shame if the Department
    undermined FEMA by taking away programs it handled well in the past. I
    think the Administration should avoid trying to fix grant programs that
    are not broken.
        In addition, not only is there $9 million less than last year for
    the grants, but the $170 million that is included in the President's
    budget will no longer fund all hazard planning. This is a real
    disappointment for county emergency managers in my state. They used
    these funds to help them prepare for terrorist attacks as well as
    natural disasters like floods and tornados. A reduction in funding,
    especially when adjusted for inflation, could force some counties to
    reduce staff as well as leave them unprepared for non-terrorism
    catastrophes.
        Why did the Administration reduce these funds, and why did they
    prohibit these funds from being used for all hazard planning?
        Answer. The Emergency Management Planning Grant Program provides
    vital support to the State and local emergency management system. The
    purpose of EMPG is to assist the development, maintenance, and
    improvement of State and local emergency management capabilities, which
    are key components of a comprehensive national emergency management
    system for disasters and emergencies that may result from natural
    disasters or accidental or man-caused events. At this time, the
    Administration's priority is assisting states in building capabilities
    for homeland security.
        These grants are a critical part of our homeland security efforts
    and an existing strength that must be maintained. The President's
    fiscal year 2005 request includes $170 million for continuation of this
    program, which is the most any administration has requested for this
    program. In fact, the fiscal year 2005 request is $20 million or more
    than 10 percent above the fiscal year 2004 request.
        The funding increase, and restriction on the amount of funds that
    can be used for salaries, will result in a more robust emergency
    planning and management system at the State and local effort.
        Follow up: The Administration has also decided to allow only 25
    percent of these grants to be used to pay personnel costs. The counties
    in my State have used these grants to hire people that facilitate
    disaster planning and help the local communities to make the best use
    of the State and Federal funds they receive. The emergency management
    community in my State has told me that this would force them to lay-off
    workers and planners, leaving them less prepared for any disaster. Will
    the Administration change its position on capping personnel costs, and
    if not, how do you expect the states and counties to continue to pay
    for this staff?
        Answer. The Administration's fiscal year 2005 request for the
    Emergency Management Planning Grants is $170 million, which is higher
    than any previous request for this program. The funds will be used to
    assist the development, maintenance, and improvement of State and local
    emergency management capabilities, with a focus on building local
    capabilities for homeland security.
        As you note, though, the request does cap the amount that states
    can use for salaries, thereby significantly increasing the amount of
    funds available for planning, training and exercises. The
    Administration's budget request still allows for award funds to support
    salaries. The request shifts the emphasis to Federal support for
    planning while properly aligning responsibility for staffing and
    salaries with the states and local governments. The Administration and
    Department have consistently supported the idea that homeland security
    is a shared responsibility between Federal and State and local
    governments. Additionally, it is important to remember that we are
    operating in a fiscal and security environment where we must ensure
    maximum security benefits are derived from every security dollar. To do
    that, we must be able to take a new look at the way in which we
    allocate resources, including sharing financial responsibility with our
    State and local partners.

                              SUBCOMMITTEE RECESS

        Senator Cochran. Our next hearing on the budget request for
    the Department of Homeland Security will be held on Tuesday,
    March 2, in this same room. At that time, the Under Secretary
    for Science and Technology, Dr. Charles McQueary, and the Under
    Secretary for Information Analysis and Infrastructure
    Protection, Mr. Frank Libutti, will be here to discuss the
    budget for the programs under their jurisdiction.
        Until then, the subcommittee stands in recess.
        [Whereupon, at 11:10 a.m., Thursday, February 26, the
    subcommittee was recessed, to reconvene at 10 a.m., Tuesday,
    March 2.]

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                             TUESDAY, MARCH 2, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Thad Cochran (chairman) presiding.
        Present: Senators Cochran, Stevens, and Byrd.

                        DEPARTMENT OF HOMELAND SECURITY

    STATEMENTS OF:
            DR. CHARLES E. McQUEARY, UNDER SECRETARY, SCIENCE AND
                TECHNOLOGY DIRECTORATE
            LIEUTENANT GENERAL FRANK LIBUTTI, UNDER SECRETARY, INFORMATION
                ANALYSIS AND INFRASTRUCTURE PROTECTION

                   OPENING STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. The meeting will please come to order.
        We appreciate very much the attendance of our witnesses at
    today's hearing. We continue our review, today, of the fiscal
    year 2005 budget request for the Department of Homeland
    Security, with specific consideration being given to the
    programs and activities of the Science and Technology
    Directorate, and the Information Analysis and Infrastructure
    Protection Directorate.
        I am pleased to welcome the Under Secretary for Science and
    Technology, Dr. Charles E. McQueary, and the Under Secretary
    for Information Analysis and Infrastructure Protection,
    Lieutenant General Frank Libutti.
        The President is requesting $1.04 billion for Science and
    Technology, and $865 million for Information Analysis and
    Infrastructure Protection.
        We appreciate the witnesses submitting their statements in
    advance. They will be printed in the hearing record and we
    invite you to make any remarks that you think would be helpful
    to the Committee's understanding of the budget request. But
    before proceeding, I want to yield to my distinguished friend
    and colleague, Senator Robert C. Byrd, for any opening
    statement that he may wish to make.
        Senator Byrd. Thank you, Mr. Chairman.
        Welcome, Mr. Under Secretary McQueary and Mr. Under
    Secretary Libutti.
        Oh, by the way, Happy Birthday. Happy Birthday.
        Dr. McQueary. Thank you.

                         HOW IAIP FUNDS ARE BEING SPENT

        Senator Byrd. Over 1 year ago, the Information Analysis and
    Infrastructure Protection Directorate was established to
    enhance the sharing of threat information amongst all levels of
    Government and the private sector, to assess vulnerabilities of
    our critical infrastructure sectors, and to provide resources
    to protect them. However, it has been quite difficult for this
    subcommittee to receive information on what your budget is
    being spent on, or how the funding is being awarded.
        I understand that our staffs had a constructive meeting
    yesterday, and I hope that this cooperation will continue. Not
    only do we hope it, but we expect it to continue.

                       CRITICAL INFRASTRUCTURE PROTECTION

        When it comes to protecting this Nation's critical
    infrastructure, the Administration tells us that the private
    sector is taking care of it. Yet, there is no mandate on the
    private sector to make investments in security. Their
    involvement is voluntary. There are no benchmarks for Congress
    to use in assessing the private sector's role in critical
    infrastructure protection.
        And so that is why, today, I am sending a letter asking the
    General Accounting Office, which is an arm of the Congress, to
    provide this subcommittee with an assessment of private sector
    investments to improve the security of our critical
    infrastructure such as chemical plants and ports since
    September 11, 2001.

                              INFORMATION ANALYSIS

        Regarding information analysis, it is a mystery to me why
    this Administration, which celebrated the creation of this new
    department as a great success, has gone to great lengths to
    splinter its functions in the area of intelligence.
        The President created the Terrorist Threat Integration
    Center, but gave primary responsibility to the CIA. He followed
    up this decision by establishing the Terrorist Screening Center
    within the FBI, creating further confusion about this
    Department's role in intelligence sharing.
        Experts who follow this situation are concerned. The
    Advisory Panel to Assess Domestic Response Capabilities for
    Terrorism Involving Weapons of Mass Destruction, better known
    as the Gilmore Commission, concluded in December that the IAIP
    directorate ``does not have significant analytical power'' to
    do what it takes, to analyze and disseminate intelligence
    information.

                                 IAIP STAFFING

        In the area of staffing, the IAIP directorate is barely
    keeping its head above water. After a year in existence, IAIP
    is struggling to meet its staffing goals. My understanding is
    that very few of the authorized intelligence analysts are on
    board.

                         SCIENCE AND TECHNOLOGY BUDGET

        Let me turn now to Science and Technology. The Science and
    Technology Directorate's budget is the eighth largest R&D
    budget in the Federal Government. The budget request for fiscal
    year 2005 is just over $1 billion. There is concern whether
    this budget is sufficient to address the various threats that
    we face, such as a biological, chemical or radiological attack.
        Last year this subcommittee received hundreds of requests
    from members for research and technology projects at major
    universities. Rather than earmark projects, the subcommittee
    significantly increased the university account and allowed the
    department to select projects through a competitive process.
    Unfortunately, the President responded to this approach by
    proposing to substantially reducing funding for this purpose
    next year.
        I look forward to hearing from our witnesses on why this
    cut is appropriate.
        Mr. Chairman, I beg you to pardon my tardiness and I thank
    you for allowing me to proceed with my opening statement.
        Senator Cochran. Dr. McQueary, we have a copy of your
    statement and we invite you to make any comments and remarks
    about the budget request which you think would be helpful to
    our understanding of the request that you're making.
        You may proceed.

                     STATEMENT OF DR. CHARLES E. MC QUEARY

        Dr. McQueary. Thank you, Chairman Cochran. And Senator
    Byrd.
        It's been several months since I have appeared before you
    and I welcome the opportunity to do so again.
        It is a pleasure to be here today and have a chance to talk
    about the research and development activities of the Department
    of Homeland Security's Science and Technology Directorate.
        The Nation's advantage in science and technology is key to
    securing the homeland. The most important mission for the
    Science and Technology Directorate is to support the efforts of
    the dedicated men and women who protect and secure our
    homeland.

                         HIGHLIGHTS OF ACCOMPLISHMENTS

        When I first reported to you about activities last year, we
    had just begun our work. The Directorate has accomplished much
    since its inception last March. And I would like to give you a
    few brief highlights, and several others are included in the
    written testimony that I have submitted.
        First, we have deployed monitoring systems that operate
    continuously to detect biological pathogens in approximately 30
    cities in the United States. We have also set up test beds to
    provide accurate radiation and nuclear warnings at air and
    marine cargo points, ports in cooperation with the Port
    Authority of New York and New Jersey. We have established the
    first series of interoperability guidelines for the Nation's
    wireless emergency communications network.
        In another effort, we have greatly reduced the time it
    takes to develop national standards for technologies to protect
    the homeland.
        Our new standards for radiation detection equipment will
    help put needed technologies into the hands of first responders
    quickly. And, our Homeland Security Advance Research Project
    Agency, or HSARPA, has started extensive research for next
    generation biological and chemical, as well as radiological and
    nuclear detectors.
        We have awarded the first round of 100 Homeland Security
    fellowships and scholarships to build U.S. leadership in
    science and technology. And we have also established the first
    university-based Homeland Security Center of Excellence to
    address both the targets and means of terrorism. And, we have
    become active contributors in numerous inter-agency working
    groups throughout the Federal Government.
        In accomplishing this, we have doubled the staff of this
    directorate with some of the country's brightest and most
    dedicated people. We started the Directorate on March 1, last
    year, with 87 people and 53 of those were transferred in bulk
    from the Environmental Measurements Laboratory in Manhattan,
    New York. So the basic staff was quite small for carrying the
    program that we had responsibility for forward. Today, we are
    at about 210 people, which is exactly where we had hoped to be
    on our plan of adding staff to the organization.
        However, as we all know, the threats to our homeland remain
    diverse and daunting. We must constantly monitor current and
    emerging threats, and assess our vulnerabilities to them. And
    we must develop new and improved capabilities to counter them,
    and be prepared to respond to and recover from a potential
    attack.

               PRIORITIZATION OF RESEARCH AND DEVELOPMENT EFFORTS

        The Science and Technology Directorate has prioritized its
    research and development efforts based on the directives and
    recommendations of many sources, including the Homeland
    Security Act of 2002, President Bush's National Strategy and
    nine Homeland Security Presidential Directives as well as the
    report of the National Academies of Science on making the
    Nation safer, and reports from the Gilmore, Bremer, and Hart-
    Rudman Committees.
        We have identified and integrated the information in these
    sources for review and evaluation by our scientific staff, and
    it provides the basis for determining the Research and
    Development needed to meet our mission.
        We recognize that many organizations are contributing to
    the Homeland Security's Science and Technology base. Congress
    recognized this as well and the Homeland Security Act of 2002
    directed the Under Secretary of Science and Technology to
    coordinate the Federal Government's civilian efforts to
    identify and develop countermeasures to current and emerging
    threats. We take this responsibility very seriously.
        We began this coordination process by evaluating and
    producing a report on the Department of Homeland Security
    research and development activities underway that were not
    under the direct cognizance of the Under Secretary for Science
    and Technology. Where appropriate, Science and Technology will
    absorb these research and development functions in this fiscal
    year.
        We are now initiating the effort needed to coordinate
    Homeland Security research and development across the entire
    United States Government. Discussions are ongoing with the
    Federal departments and agencies, as well as the Office of
    Management and Budget, the Office of Science and Technology
    Policy, and the Homeland Security Council to ensure the best
    possible coordination.

                             FISCAL YEAR 2005 PLANS

        At this time, I would like to briefly describe our fiscal
    year 2005 plans. We have an overall budget request of $1.04
    billion, which you identified, which is an increase of $126.5
    million or about 14 percent over fiscal year 2004. With these
    funds Science and Technology will continue to make progress in
    securing the homeland.
        For example, under President Bush's new biological-
    surveillance initiative, which accounts for most of the
    increase in funding, additional capability will be implemented
    quickly in the top-threat urban areas to provide more than
    twice the current capability.
        We will continue to provide the science and technology
    capabilities and enduring partnerships needed to develop
    methods and tools to test and assess threats and
    vulnerabilities to protect our critical infrastructure and
    enhance information exchange.
        We will continue to work in cyber security both through
    partnerships and by creating low-cost and high impact solutions
    to identified cyber security challenges. And of course, this is
    done in concert with my good friend, General Libutti.
        We will wrap-up our work in counter-MANPADS to improve
    technology to protect commercial aircraft from the man-portable
    air defense systems or the shoulder-fired missiles, which
    present a vulnerability to our commercial aircraft industry.
        We will award contracts in fiscal year 2005 for integrating
    commercial prototype equipment on selected commercial aircraft
    and conduct test evaluation including a live-fire range test.
        In conclusion, this year the scientists and engineers in
    the Science and Technology Directorate have accomplished more
    than I could have expected. I am proud to have shared some of
    these success stories with you today. We have appended a more
    comprehensive summary of the accomplishments to date for the
    record.

                               PREPARED STATEMENT

        Yet, we also recognize that there is much more to do and we
    will be working just as hard in fiscal year 2005. I look
    forward to working with you, with my colleagues in other
    Federal agencies, and with private industry and academia to
    continue this work and improve our ability to protect our
    homeland and our way of life.
        This concludes my prepared statement, and I will be
    prepared to answer questions at the appropriate time.
        [The statement follows:]

                 Prepared Statement of Dr. Charles E. McQueary

                                  INTRODUCTION

        Good morning. Chairman Cochran, Senator Byrd, and distinguished
    Members of the subcommittee, it is a pleasure to be with you today to
    discuss the research and development activities of the Department of
    Homeland Security's Science and Technology Directorate.
        The Nation's advantage in science and technology is key to securing
    the homeland. The most important mission for the Science and Technology
    Directorate is to develop and deploy cutting-edge technologies and new
    capabilities so that the dedicated men and women who serve to protect
    and secure our homeland can perform their jobs more effectively and
    efficiently--these men and women are my customers.
        When I last reported to you about our activities, we had just
    started our work. Since its inception less than a year ago, the Science
    and Technology Directorate has:
      --deployed continuously operating biological pathogen detection
            systems to approximately 30 United States cities;
      --set up testbeds for radiation and nuclear warnings at air and
            marine cargo ports in cooperation with the Port Authority of
            New York and New Jersey;
      --established the first series of interoperability guidelines for the
            Nation's wireless emergency communications network;
      --established the first national standards guidelines for radiation
            detection equipment;
      --awarded the first Homeland Security Fellowships and Scholarships;
      --established the first Homeland Security University Center of
            Excellence;
      --transferred the Plum Island Animal Disease Center from the
            Department of Agriculture to the Science and Technology
            Directorate;
      --engaged private industry in bringing innovative and effective
            solutions to homeland security problems through the interagency
            Technical Support Working Group and issuance of HSARPA's first
            two Broad Agency Announcements and a Small Business Innovative
            Research Program solicitation;
      --initiated a development and demonstration program to assess the
            technical and economic viability of adapting military
            countermeasures to the threat of man portable anti-aircraft
            missiles for commercial aircraft;
      --collaborated with and assisted other components of the Department
            to enhance their abilities to meet their missions and become
            active contributors in interagency working groups--all while
            staffing this Directorate with some of this country's brightest
            and most dedicated people.
        I continue to be energized by and proud of the scientists,
    engineers, managers, and support staff in the Science and Technology
    Directorate. We have accomplished a great deal in a short amount of
    time and are positioning the Directorate to make continuing
    contributions to the homeland security mission of the Department.
        However, the threats to our homeland remain diverse and daunting.
    We must constantly monitor current and emerging threats and assess our
    vulnerabilities to them, develop new and improved capabilities to
    counter them, and mitigate the effects of terrorist attacks should they
    occur. The Science and Technology Directorate must also enhance the
    conventional missions of the Department to protect and provide
    assistance to civilians in response to natural disasters, law
    enforcement needs, and other activities such as maritime search and
    rescue.

                SCIENCE AND TECHNOLOGY DIRECTORATE ORGANIZATION

        Because our Department is relatively new, I'd like to describe the
    way we are structured. We have four key offices in the Science &
    Technology Directorate, each of which has an important role in
    implementing the Directorate's RDT&E activities. Individuals with
    strong credentials have been appointed to head each office and we
    continue to strategically add highly skilled technical, professional
    and support staff. These offices are: Plans, Programs and Budgets;
    Research and Development; Homeland Security Advanced Research Projects
    Agency; and Systems Engineering and Development. In addition, we have
    created the Office of Weapons of Mass Destruction Operations and
    Incident Management to offer scientific advice and support.
        Crosscutting the four key offices, the Science and Technology
    Directorate is implementing its activities through focused portfolios
    that address biological, chemical, high explosives, radiological and
    nuclear, and cyber threats; support the research and development needs
    of the operational units of the Department; support the development of
    standards; develop an enduring R&D capability for homeland security;
    and receive valuable input from private industry and academia as well
    as national and Federal laboratories. I will talk about the offices
    first and then about the portfolios.

    Office of Plans, Programs and Budgets
        The Office of Plans, Programs and Budgets operates under the
    supervision of Dr. Penrose Albright. He has organized this office into
    the portfolios I just mentioned, each of which is focused on a
    particular discipline or activity; taken together, these portfolios
    span the Directorate's mission space. As I will cover the portfolios in
    detail later in this testimony, I will limit myself here to a summary
    explanation. The staff of each portfolio is charged with being expert
    in their particular area; with understanding the activities and
    capabilities extant in Federal agencies and across the broad research
    and development community; and with developing a strategic plan for
    their particular portfolio, to include near-, mid-, and long-range
    research and development activities. In addition, we have staff that is
    charged with understanding the threat from a technical perspective,
    with integrating the various portfolios into a coherent overall plan,
    and with developing the corresponding budget and monitoring its
    financial execution.
        Finally, the Office of Plans, Programs and Budget is responsible
    for executing the Directorate's implementation responsibilities for the
    SAFETY (Support Anti-Terrorism by Fostering Effective Technologies)
    Act.

    Office of Research and Development
        We are fortunate to have Dr. Maureen McCarthy as our Director of
    Science and Technology's Office of Research and Development (ORD). Dr.
    McCarthy has served as Chief Scientist for the National Nuclear
    Security Administration and the Department of Energy (DOE) and was
    previously DOE's senior representative to the Homeland Security
    Transition Planning Office. She will lead the office as it strives to
    provide the Nation with an enduring capability in research,
    development, demonstration, testing and evaluation of technologies to
    protect the homeland. This office also plans to provide stewardship to
    the scientific community and to preserve and broaden the leadership of
    the United States in science and technology.
        Activities within ORD address the resources that can be brought to
    bear to better secure the homeland through the participation of
    universities, national laboratories, Federal laboratories and research
    centers. Directors have been appointed to lead efforts in each of these
    areas and staff is being added rapidly.

    Homeland Security Advanced Research Projects Agency
        Dr. David Bolka joined us in September 2003 as director of the
    Homeland Security Advanced Research Projects Agency, known as HSARPA.
    Dr. Bolka made significant contributions in advancing technical and
    scientific projects in his prior work with Lucent Technologies and Bell
    Laboratories, following a notable career in the United States Navy.
        HSARPA is the external research-funding arm of the Science and
    Technology Directorate. It has at its disposal the full range of
    contracting vehicles and the authority under the Homeland Security Act
    to engage businesses, federally funded research and development
    centers, universities and other government partners in an effort to
    gather and develop viable concepts for advanced technologies to protect
    the homeland.
        HSARPA's mission, as stated in the Homeland Security Act of 2002,
    is to support basic and applied homeland security research to promote
    revolutionary changes in technologies that would promote homeland
    security; advance the development, testing and evaluation, and
    deployment of homeland security technologies; and accelerate the
    prototyping and deployment of technologies that would address homeland
    security vulnerabilities. Its customers are State and local first
    responders, and Federal agencies that are allied with homeland security
    such as the United States Coast Guard, United States Secret Service,
    the U.S. Citizenship and Immigration Services, the Federal Emergency
    Management Agency and others.
        About 60 percent of the Science and Technology Directorate's
    appropriation in fiscal year 2004 will be executed directly through the
    private sector with HSARPA managing about half of that. At least 5 to
    10 percent of HSARPA's funds are dedicated for revolutionary, long-
    range research for breakthrough technologies and systems.

    Office of Systems Engineering and Development
        Mr. John Kubricky joined us in early October 2003 as our Director
    of the Office of Systems Engineering and Development (SE&D). He is
    tasked with leading the implementation and transition of large-scale or
    pilot systems to the field through a rapid, efficient and disciplined
    approach to project management. Mr. Kubricky previously served as
    Advanced Program Development Manager for Northrop Grumman and has held
    senior positions with California Microwave and Westinghouse Defense.
        One of the Science and Technology Directorate's challenges is to
    evaluate a wide spectrum of military and commercial technologies so
    rapid, effective and affordable solutions can be transitioned to the
    Department's customers that include first responders and Federal
    agencies. In some cases, military technologies could be candidates for
    commercialization, but rigorous systems engineering processes need to
    be applied to ensure a successful transition. SE&D's role is to
    identify and then, in a disciplined manner, retire risks associated
    with such technologies to ready them for deployment to the field. In
    doing so, the office must view each technology through the prism of
    affordability, performance and supportability--all critical to end-
    users.
        SE&D must weigh considerations such as the urgency for a solution,
    consequences of the threat, safety of the product, and lifecycle
    support as new products are introduced. Products must be user friendly,
    have a minimum of false alarms, require little or no training and
    consistently provide accurate results. SE&D will demonstrate and test
    solutions before they are released to the field, and will validate that
    those solutions meet user expectations.

    Office of Weapons of Mass Destruction Operations and Incident
            Management
        We created the Office of Weapons of Mass Destruction Operations and
    Incident Management to serve as the Science and Technology
    Directorate's technical support for crisis operations. The office
    provides scientific advice and support to the Office of the Secretary
    of Homeland Security in assessing and responding to threats against the
    homeland. This office's activities are primarily focused on the
    biological, chemical, radiological, and nuclear threats.
    results from current research and development (r&d) spending and fiscal

                       YEAR 2005 PLANS: PORTFOLIO DETAILS

        As I have mentioned, the Science and Technology Directorate has
    organized its efforts into research and development portfolios that
    span the set of product lines of the Directorate.
        Four portfolios address specific terrorist threats:
      --Biological Countermeasures
      --Chemical Countermeasures
      --High Explosive Countermeasures
      --Radiological and Nuclear Countermeasures
        Four portfolios crosscut these threats:
      --Threat and Vulnerability, Testing and Assessment--this portfolio
            includes our support to the Information Analysis and
            Infrastructure Protection Directorate, including our critical
            infrastructure protection and cybersecurity activities.
      --Standards
      --Emerging Threats
      --Rapid Prototyping
        We also have portfolios that support the operational units of the
    Department (Border and Transportation Security; Emergency Preparedness
    and Response, United States Coast Guard and United States Secret
    Service) in both their homeland security and conventional missions.
        Our University and Fellowship Programs portfolio addresses the need
    to build an enduring science and technology capability and support
    United States leadership in science and technology.
        Our most recent program, Counter-MANPADS, is seeking to improve
    technologies to protect commercial aircraft from the threat of MAN-
    Portable Air Defense Systems (MANPADS).
        In addition, the Science and Technology Directorate is responsible
    for the management of one of the United States government's E-Gov
    Initiatives, the SAFECOM Program. There are tens of thousands of State
    and local public safety agencies, and 100 Federal law enforcement
    agencies that depend on interoperable wireless communications. The
    SAFECOM (Wireless Public SAFEty Interoperable COMmunications) program
    is the umbrella initiative to coordinate all Federal, State, local, and
    Tribal users to achieve national wireless communications
    interoperability. The placement of SAFECOM in the Department of
    Homeland Security's Science and Technology Directorate allows it full
    access to the scientific expertise and resources needed to help our
    Nation achieve true public safety wireless communications
    interoperability.
        At this time I would like to briefly describe some of our
    accomplishments to date and our fiscal year 2005 plans. As can be seen
    in the following chart, we have an overall fiscal year 2005 budget
    request of $1.039 billion, which is an increase of $126.5 million (13.9
    percent) over the fiscal year 2004 levels. The request includes $35
    million for construction of facilities. In addition, the increase
    includes President Bush's request for an additional $65 million to
    enhance and expand the BioWatch Program.

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                                         Increases/Decreases from
                                                        Fiscal year      Proposed        fiscal year 2004 to 2005
             Budget activity            Fiscal year      2004 less      fiscal year  -------------------------------
                                        2003 Amount     rescission      2005 Amount                       Percent
                                                          Amount                          Amount         increase
    ----------------------------------------------------------------------------------------------------------------
    Budget Activity M&A.............            $0.0           $44.2           $52.6            $8.4            19.1
        Salary and expenses.........             0.0            44.2            52.6             8.4            19.1
    Budget Activity R&D.............           553.5           868.7           986.7           118.0            13.6
        Bio Countermeasures (incl.             362.6           285.0           407.0           122.0            42.8
         NBACC).....................
        High-Explosives                          0.0             9.5             9.7             0.2             2.1
         Countermeasures............
        Chemical Countermeasures....             7.0            52.0            53.0             1.0             1.9
        R/N Countermeasures.........            75.0           126.3           129.3             3.0             2.4
        TVTA (incl. CIP & Cyber)....            36.1           100.1           101.9             1.8             1.8
        Standards...................            20.0            39.0            39.7             0.7             1.9
        Components..................             0.0            34.0            34.0             0.0             0.0
        University & Fellowship                  3.0            68.8            30.0           -38.8           -56.4
         Programs...................
        Emerging Threats............            16.8            21.0            21.0             0.0             0.0
        Rapid Prototyping...........            33.0            73.0            76.0             3.0             4.1
        Counter MANPADS.............             0.0            60.0            61.0             1.0             1.7
        R&D Consolidation                        0.0             0.0            24.1            24.1  ..............
         transferred funds..........
                                     -------------------------------------------------------------------------------
          Total enacted                        553.5           912.8          1039.3           126.5            13.9
           appropriations and budget
           estimates................
    ----------------------------------------------------------------------------------------------------------------

    Biological Countermeasures
        Biological threats can take many forms and be distributed in many
    ways. Aerosolized anthrax, smallpox, foot and mouth disease, and bulk
    food contamination are among the threats that can have high
    consequences for humans and agriculture. Our Biological Countermeasures
    portfolio uses the Nation's science base to prevent, protect, respond
    to and recover from bioterrorism events. This portfolio provides the
    science and technology needed to reduce the probability and potential
    consequences of a biological attack on this Nation's civilian
    population, its infrastructure, and its agricultural system. Portfolio
    managers and scientists are developing and implementing an integrated
    systems approach with a wide range of activities, including
    vulnerability and risk analyses to identify the need for vaccines,
    therapeutics, and diagnostics; development and implementation of early
    detection and warning systems to characterize an attack and permit
    early prophylaxis and decontamination activities; and development of a
    national bioforensics analysis capability to support attribution of
    biological agent use.
        In fiscal year 2003 and 2004, the Biological Countermeasures
    portfolio:
        Deployed BioWatch to approximately 30 cities across the Nation.
    BioWatch consists of air samplers that detect the release of biothreat
    pathogens, such as anthrax, in a manner timely enough to allow for
    effective treatment of the exposed population. In addition, with
    additional funds provided by Congress in fiscal year 2004, we were able
    to integrate environmental monitoring data with biosurveillance to
    provide early attack alerts and assessments. The environmental
    monitoring activities include not only BioWatch, which provides
    continuous monitoring of most of our major metropolitan areas, but also
    targeted monitoring that is temporarily deployed for special national
    needs, such as a Homeland Security Elevated Threat Level. While serving
    the primary function of mitigating attacks, both BioWatch and
    environmental monitoring systems also play a significant deterrent
    role, since terrorists are less likely to attack when they know that
    defensive systems prevent them from attaining their goals.
        Established the National Biodefense Analysis and Countermeasures
    Center, which provides scientific support for intelligence activities,
    prioritizes biothreats, and conducts bioforensic analyses for
    attribution and hence deterrence.
        In fiscal year 2005, we will build upon our past work and continue
    to deploy and improve wide area monitoring systems for urban areas.
    Under President Bush's new Biosurveillance Initiative, which accounts
    for most of the fiscal year 2005 increase in funding, additional
    capability will be implemented quickly in the top threat urban areas to
    more than twice the current capability. We will be working on
    decontamination technologies and standards for facilities and outdoor
    areas, and a National Academy of Science study characterizing
    contamination risks will be completed in fiscal year 2005. At a smaller
    scale, we will define requirements for expanded technology in detect-
    to-warn scenarios relevant to facilities monitoring. At the same time,
    we will be building our capabilities in the National Biodefense
    Analysis and Counterterrorism Center (NBACC) and at Plum Island Animal
    Disease Center (PIADC). At the NBACC, we are focusing first on
    bioforensics and development of a biodefense knowledge center; for
    agro-bioterrorism, we are prioritizing countermeasures to foreign
    animal diseases. We are requesting additional funding in fiscal year
    2005 for Plum Island to improve the facilities and security of this
    important research and development site.

    Chemical Countermeasures
        The National Research Council Report Making the Nation Safer points
    out that ``chemicals continue to be the weapon of choice for terrorist
    attacks.'' The large volumes of toxic industrial chemicals and
    materials along with the potential for chemical warfare agents and
    emerging threat agents constitute a broad range of threats that may be
    applied to virtually any civilian target.
        Our Chemical Countermeasures portfolio provides the science and
    technology needed to reduce the probability and potential consequences
    of a chemical attack on this Nation's civilian population. The
    portfolio places high priority on characterizing and reducing the
    vulnerability posed by the large volumes of toxic industrial materials
    in use, storage or transport within the Nation. The research and
    development activities include prioritization of efforts among the many
    possible chemical threats and targets, and development of new detection
    and forensic technologies and integrated protective systems for high-
    value facilities such as airports and subways. These activities are
    informed by end-user input and simulated exercises.
        Over the past year, our Chemical portfolio completed Project
    PROTECT--Program for Response Options and Technology Enhancements for
    Chemical/Biological Terrorism--a program conducted in collaboration
    with the Washington Metropolitan Area Transit Authority (WMATA).
    PROTECT, an operational chemical agent detection and response
    capability, significantly decreases response time, which in the event
    of an attack will save human lives. PROTECT is deployed in Metro
    stations and is operated by the WMATA.
        In fiscal year 2005, our focus will be on protecting facilities
    from chemical attacks and controlling the industrial chemicals that may
    be used for such attacks. Our scientists, working with the Information
    Analysis and Infrastructure Protection Directorate (IAIP), will
    complete a detailed end-to-end study of three reference scenarios, to
    culminate in recommendations for top-level architectures,
    identification of key gaps, and a ``report card'' showing present, mid-
    term (3-year), and long-term (5-plus year) capabilities. We will
    qualify candidate off-the-shelf sensors for demonstration in an
    application to facilities protection. We will also address response and
    recovery. Working with the user community, we will develop first-
    generation playbooks for responding to the three reference scenarios
    and develop technical requirements for personal protection equipment.

    High Explosives Countermeasures
        The High Explosives Countermeasures portfolio addresses the threat
    that terrorists will use explosives in attacks on buildings, critical
    infrastructure, and the civilian population of the United States. The
    Science and Technology Directorate's portfolio is closely coordinated
    with the activities ongoing in the Transportation Security
    Administration to ensure that research and development (R&D) activities
    are complementary, not duplicative. R&D priorities in this portfolio
    have focused on the detection of vehicle bombs and suicide bombers, and
    on providing the science and technology needed to significantly
    increase the probability of preventing an explosives attack on
    buildings, infrastructure and people.
        This portfolio in fiscal year 2005 will develop and field
    equipment, technologies and procedures to interdict suicide bombers and
    car and truck bombs before they can reach their intended targets while
    minimizing the impact on the American way of life. We will complete
    testing and evaluation of known procedures and commercial off-the-shelf
    devices applicable to indoor or outdoor interdiction of suicide
    bombers, and develop a training package for local law enforcement,
    including recommended equipment and procedures. In addition, we will
    support the development of new devices to interdict suicide bombers and
    study the feasibility of using existing detectors to identify
    explosives in trucks. Finally, we will analyze the costs and benefits
    of hardening aircraft cargo containers, cargo bays, and overhead bin
    storage compartments to better withstand the effects of an explosion.

    Radiological and Nuclear Countermeasures
        Potential radiological and nuclear threats range from the
    deliberate dispersal of small amounts of radioactive material to the
    detonation of an improvised or stolen nuclear weapon to an attack on
    our nuclear power industry. Our Radiological and Nuclear
    Countermeasures portfolio provides the science and technology needed to
    reduce both the probability and the potential consequences of a
    radiological or nuclear attack on this Nation's civilian population or
    our nuclear power facilities.
        On August 19, 2003, our Radiological and Nuclear Countermeasures
    portfolio formally assumed management of the Port Authority of New York
    and New Jersey radiation detection test bed. The test bed was
    previously managed by the United States Department of Energy. Following
    the transfer, we have broadened the project scope beyond testing and
    evaluating individual pieces of technology to a systems approach,
    including response protocols and operational concepts. As part of the
    Science and Technology Directorate's effort, radiation detection
    sensors will be deployed and operated by Federal, State, and local
    inspectors and police at land, maritime and aviation venues. By judging
    the efficacy of deployed systems over time, we will be able to inform
    future decisions on detection technology R&D investment, deployment of
    urban monitoring systems, configurations best able to enhance security,
    and viable ways to defend against a radioactive dispersal device or an
    improvised nuclear device.
        For fiscal year 2005, we plan to leverage our previous technology
    and capability successes and place a high priority on providing the
    end-user community with the most appropriate and effective detection
    and interdiction technologies available to prohibit the importation or
    transportation and subsequent detonation of a radiological or nuclear
    device within U.S. borders. Specifically, we will do the following:
      --Integrate at least five Federal, State, and local sites into an
            operational detection system architecture to detect
            radiological and nuclear threats;
      --Establish a test and evaluation capability, and test and evaluate
            90 percent of the fiscal year 2005 prototype technologies
            developed in the portfolio's programs;
      --Demonstrate two advanced characterization technologies for crisis
            response; and
      --Demonstrate a prototype for automatic radiological imaging analysis
            that enhances current imaging systems at one pilot site.

    Threat and Vulnerability, Testing and Assessment
        Our Threat and Vulnerability, Testing and Assessment (TVTA)
    portfolio is one of our largest portfolios, and includes our scientific
    and technical support to the Information Analysis and Infrastructure
    Protection (IAIP) Directorate. TVTA includes our R&D activities in
    Critical Infrastructure Protection and Cybersecurity. Activities in
    this portfolio are designed to help evaluate extensive amounts of
    diverse threat information; detect and document terrorist intent;
    couple threat information with knowledge of complex, interdependent
    critical infrastructure vulnerabilities; and enable analysts to draw
    timely insights and distribute warnings from the information. This
    portfolio provides the science and technology needed to develop methods
    and tools to test and assess threats and vulnerabilities to protect
    critical infrastructure and enhance information exchange; this
    portfolio also includes a Biometrics Program and a Cybersecurity
    Program.
        In fiscal year 2004, TVTA:
      --Developed and installed an operational component, the Threat-
            Vulnerability Mapper (TVM), as part of the Threat and
            Vulnerability Integration System for the Information Analysis
            and Infrastructure Protection Directorate. The TVM provides
            counterterrorism analysts with a simple, straightforward way
            not only to depict the geographic distribution of threats
            across the United States, but also to search the underlying
            databases for information on the possible actors, agents,
            potential severity of attacks, and extent of the
            vulnerabilities to and effects of such attacks.
      --Co-funded the Cyber Defense Technology Experimental Research
            (``DETER'') Network with the National Science Foundation, a
            $5.45 million, 3-year research project to create an
            experimental infrastructure network to support development and
            demonstration of next-generation information security
            technologies for cyber defense. This is a multi-university
            project led by the University of California at Berkeley.
      --Developed a Decision Support System focused on prioritizing
            investment, protection, mitigation, response, and recovery
            strategies related to Critical Infrastructure Protection. The
            initial proof-of-concept began in August 2003 and a case study
            is being conducted in February 2004. The prototype model will
            include representation of all 14 critical infrastructure
            sectors/assets and their interdependencies.
      --Developed advanced algorithms for speeding the creation of DNA
            signatures for biological pathogen detection through the
            Advanced Scientific Computing Research and Development program.
            These discoveries will result in cheaper, faster and more
            reliable bio-detectors for homeland security.
        In fiscal year 2005, TVTA will provide the science and technology
    capabilities and enduring partnerships needed to develop methods and
    tools to test and assess threats and vulnerabilities to protect
    critical infrastructure and enhance information exchange. The Threat-
    Vulnerability Mapper is only one component of a large Threat and
    Vulnerability Information System that we will continue to build,
    drawing upon advances in the information and computer sciences as well
    as innovative analytic techniques. Our objective is to continually
    improve an analyst's capability to answer threat-related questions. The
    Science and Technology Directorate will contribute to the capability to
    produce high-quality net assessments and assessments of weapons of mass
    destruction.
        We will develop advanced computing algorithms in support of
    improved aerosol dispersion models, blast effects calculations, neutron
    interrogation models, bioinformatics, and scalable information
    extraction; improved algorithms make more accurate information
    available faster. We will continue to provide, in collaboration with
    other relevant organizations, the science and technology and associated
    standards needed in the development of biometrics for precise
    identification of individuals and develop instrumentation to aid
    authorized officials in detecting individuals with potentially hostile
    intent. In the cybersecurity area, the DETER Network testbed will be up
    and running, and we will competitively fund several low-cost, high-
    impact solutions to specific cybersecurity problems.

    Standards
        Ensuring that standards are created and adopted is critically
    important for homeland security. We need consistent and verifiable
    measures of effectiveness in terms of basic functionality,
    appropriateness and adequacy for the task, interoperability,
    efficiency, and sustainability. Standards will improve the quality and
    usefulness of homeland security systems and technologies. Our Standards
    portfolio cuts across all aspects of the Science and Technology
    Directorate's mission and all threats to improve effectiveness,
    efficiency, and interoperability of the systems and technologies
    developed, as envisioned in the Homeland Security Act.
        Our Standards portfolio continues to actively engage the Federal,
    State, and local first responders to ensure that developed standards
    are effective in detection, prevention, response, management, and
    attribution. This portfolio also conducts the essential activities in
    order to meet the requirement of the SAFETY (Support Anti-Terrorism by
    Fostering Effective Technologies) Act in developing certification
    standards for technologies related to homeland security.
        In fiscal year 2004, our Standards portfolio:
      --Created initial standards guidelines, with formal standards nearing
            completion, for radiation pagers, hand-held radiation dosimetry
            instruments, radioisotope identifiers and radiation portal
            monitors. These standards were developed under the auspices of
            the American National Standards Institute's Accredited American
            Standards Committee on Radiation Instrumentation.
      --Published guidelines for interoperable communications gear. Common
            grant guidance has been developed and incorporated in the
            public safety wireless interoperability grant programs of both
            the Department of Justice and the Department of Homeland
            Security;
      --Launched the SAFETY Act process for evaluating anti-terrorism
            technologies for potential liability limits.
        In fiscal year 2005, the Standards portfolio will continue to work
    on many fronts and with many partners to establish needed standards for
    technologies (including equipment), processes, and systems. We will
    especially focus on two major milestones. First, we will establish
    technical standards and test and evaluation protocols for
    decontamination technologies and analysis across the ranges of weapons
    of mass destruction. Second, we will publish a ``Consumer's Report'' on
    radiation and bioagent detection devices for Federal, State, and local
    users.

    Emerging Threats
        It is truly the threats we do not yet know that are often the most
    terrifying. Our Emerging Threats portfolio addresses the dynamic nature
    of terrorist threats, as science and technology advancements enable new
    agents of harm and new ways to employ them. This portfolio places high
    priority on developing the capability to use innovative, crosscutting,
    out-of-the-box approaches for anticipating and responding to new and
    emerging threats. Successful identification of emerging threats will
    permit capabilities to be developed to thwart these emerging threats
    before they are used.
        Relevant R&D is underway at other agencies and organizations; thus,
    partnerships in this area hold great potential for synergistic focus on
    homeland security. Work is being done and will continue to be pursued
    in partnership with the Departments of Energy, Defense, Justice, and
    Agriculture, the intelligence community, and the National Institutes of
    Health.
        In fiscal year 2003 and 2004, our scientists in the Emerging
    Threats portfolio established informal partnerships with the
    intelligence community and with the United States Secret Service in
    order to leverage ongoing activities in support of over-the-horizon
    assessment.
        In fiscal year 2005, we will leverage the activities started during
    fiscal year 2004, and continue to focus on developing the capability to
    use innovative, crosscutting, out-of-the-box approaches for
    anticipating and responding to new and emerging threats and to develop
    revolutionary technologies to combat them.

    Rapid Prototyping
        By accelerating the time needed to develop and commercialize
    relevant technologies, the Science and Technology Directorate will
    ensure that operational end-users will be better able to prevent
    terrorist attacks, reduce the Nation's vulnerability, and minimize the
    damage and assist in recovery if attacks occur. Our Rapid Prototyping
    portfolio advances the Directorate's mission to conduct, stimulate and
    enable research, development, test, evaluation and timely transition of
    homeland security capabilities to Federal, State and local operational
    end-users.
        In fiscal year 2003 and fiscal year 2004, the Rapid Prototyping
    portfolio provided funding of $30 million each year through our
    Homeland Security Advanced Research Projects Agency (HSARPA) to the
    interagency Technical Support Working Group (TSWG) to solicit ideas,
    concepts and technologies for 50 requirement areas of interest to both
    the Department and TWSG; initial contracts have been made and HSARPA
    will provide the programmatic monitoring of those efforts for the
    Science and Technology Directorate. This portfolio also provided
    support through HSARPA for a joint port and coastal surveillance
    prototype testbed designated ``HAWKEYE'' with the United States Coast
    Guard. Funding has been made available to support the creation of a
    Technology Clearinghouse as required in the Homeland Security Act of
    2002.
        In fiscal year 2005, this program will continue to provide a
    mechanism for accelerated development of technologies relevant to
    homeland security in a process driven by technology developers. Through
    rapid prototyping and commercialization, these technologies will be
    made available to operational end-users as quickly as possible, thus
    increasing their capability to secure the homeland.

    Support to Department of Homeland Security Components
        As I have mentioned, the operational components of the Department
    are my customers. The Department of Homeland Security's Science and
    Technology Directorate supports the missions of the Information
    Analysis and Infrastructure Protection (IAIP) Directorate, Border and
    Transportation Security (BTS), Emergency Preparedness and Response
    (EP&R), United States Coast Guard (USCG), and United States Secret
    Service (USSS). Our TVTA portfolio supports the mission of the IAIP
    Directorate as previously indicated. This portfolio places high
    priorities on high-risk, high-reward research and development relevant
    to homeland security that might not otherwise be conducted in support
    of the missions of BTS, EP&R, USCG, and the USSS.
        In fiscal year 2003 and fiscal year 2004, we continued to support
    the conventional missions of these operational components. Ongoing
    activities within BTS, USCG and USSS focus on preventing terrorists and
    terrorist weapons (particularly weapons of mass destruction) from
    entering the United States, on detecting and preventing cyber attacks,
    supporting maritime transportation, safety and economy (Port and
    Channel navigation, Search and Rescue, and Aquatic Nuisance Species
    Remediation), and on preventing attacks on United States Secret Service
    protectees and high-visibility venues.

    Support to Border and Transportation Security
        The Science and Technology Directorate supports all elements of BTS
    enforcement and facilitation processes through identifying operational
    requirements, developing mission capabilities-based technological needs
    and implementing a strategic plan. We are providing systems engineering
    support to various BTS programs including US VISIT and Unmanned Aerial
    Vehicles.
        The Science and Technology Directorate's support to the BTS
    Directorate is accomplished by implementing a capabilities-based
    technology planning process. The capabilities-based approach
    establishes the scope of effort and framework for a technology plan.
    Through a series of user conferences and technology opportunity
    conferences, requirements are developed and prioritized for new and
    improved capabilities. Operational personnel identify capabilities and
    technology personnel identify potential development opportunities.
    Capability gaps and possible technology solutions are proposed, and a
    budget is developed to distinguish between both funded and unfunded
    needs.
        The Science & Technology Directorate co-chairs with BTS, the
    Department's Unmanned Aerial Vehicle (UAV) Working Group, which is
    currently focused on developing the Border and Transportation Security
    operational requirements for UAVs and related technologies, e.g.,
    aerostats, blimps, lighter than air (LTA) ships, and fixed and mobile
    towers. The starting point for the requirements generation process is
    six BTS capability objectives we have identified that could benefit by
    the utilization of UAVs: surveillance and monitoring communications,
    apprehension, targeting, intelligence, deterrence, and officer safety.
    Functional capabilities that could be filled or improved through the
    application of UAVs and other technologies have been identified. Based
    on these high-level requirements, the Science and Technology
    Directorate is developing concepts of operations and assumptions that
    will be used in conducting an Analysis of Alternatives that will
    include UAVs and other technologies.
        In fiscal year 2005 we will be involved in a wide range of
    activities supporting the components, based upon their needs. For BTS,
    we will focus on discovering and implementing technologies that include
    improved screening and inspection, access control, document
    verification and validity, and data compression and analysis.

    Support to Emergency Preparedness and Response
        The Nation has more than 750 regionally accredited community
    colleges. Community colleges train more than 80 percent of our
    country's first responders; these first responders are critical for
    homeland security. The Science and Technology Directorate has a
    responsibility to ensure that these first responders have the necessary
    tools available to them to perform their jobs effectively and safely on
    a daily basis. This portfolio has a key role in our meeting that
    responsibility.
        The scope of our EP&R portfolio includes research, development,
    test and evaluation for State, local and Federal emergency responders
    and emergency managers. Particular emphasis is placed on technology
    integration at all levels of government, technology insertion for
    weapons of mass destruction detection and monitoring systems, and long-
    term sustained performance and interoperability to enhance State and
    local preparedness.
        Our work in the EP&R portfolio focuses on three major areas:
      --Technology development for first responders
      --Scientific and technical support to Federal response
      --Technology integration--Safe Cities
        The Safe Cities Program, a new initiative in fiscal year 2004, is
    focused on implementing technology and operational system solutions in
    local communities/regions. This program is being piloted in a select
    number of cities in fiscal year 2004 and will be conducted in close
    cooperation with State and local emergency managers and city planners
    to identify capability needs and gaps that advanced technologies being
    developed by the Science and Technology Directorate can meet. The Safe
    Cities Program seeks to provide technology and operational solutions
    that are sustainable by the communities in which they are implemented.
    The Safe Cities Program will enable us to better understand the
    operational context into which new technologies will be inserted. The
    Program will result in the creation of an infrastructure that
    facilitates the evaluation of new technologies in real-world operating
    environments as well as providing a venue for integrating these
    technologies with existing State and local systems.
        In fiscal year 2005 the EP&R portfolio will continue its focus on
    technology development and technical guidance for first responders
    (State and local), scientific and technical support to the EP&R
    Directorate; and expansion of technology integration--Safe Cities.

    Support to United States Coast Guard
        The Science & Technology Directorate is integrating a major
    research program into a United States Coast Guard operational testbed
    in south Florida. The HAWKEYE program injects technologies (such as
    Surveillance, Command & Control, Sensor Fusion, and Communications)
    allowing simultaneous evaluation of technology performance as a direct
    impact on mission execution.

    Support to the United States Secret Service
        We have coordinated with the United States Secret Service and
    established its first direct-funded R&D program. Based upon
    appropriated funding, four initiatives have been identified and
    prioritized, and are underway in fiscal year 2004. In addition, there
    will be joint activities in support of the assessment of emerging
    threats.
    Homeland Security University and Fellowship Programs
        In this portfolio we seek to develop a broad research capability
    within the Nation's universities to address scientific and
    technological issues related to homeland security. The portfolio places
    high priorities on developing academic programs and supporting students
    in order to build learning and research environments in key areas of
    Departmental interest.
        In fiscal year 2004, this portfolio established the Department of
    Homeland Security's first University-based Center of Excellence, for
    Risk and Economic Analysis of Terrorism Events. The Center, based at
    the University of Southern California, will assess the level of risk
    associated with various terrorist scenarios, in particular the
    potential economic consequences. A request for proposals has been
    issued for the next two Centers of Excellence, which will focus on
    Foreign Animal and Zoonotic Disease Defense and Post-Harvest Food
    Protection and Defense.
        Last fall, we awarded our 2003-2004 academic year DHS Scholarships
    and Fellowships, and welcomed our new Scholars and Fellows with a
    reception in Washington, DC. The solicitation for this program received
    just under 2,500 applications for 100 Scholarships and Fellowships.
    Besides making immediate contributions to homeland security-related
    R&D, these students will be part of the development of a broad research
    capability within the Nation's universities to address scientific and
    technological issues related to homeland security.
        During fiscal year 2005, another 100 Scholars and Fellows will be
    supported for the academic year of 2004-2005, bringing the total of
    supported students to 200. We will also continue to support the
    Homeland Security University Centers of Excellence established in
    fiscal year 2004, each with a different subject expertise focused on
    reducing the terrorist threat on the United States. Each Center of
    Excellence is awarded an initial 3-year contract whose annual cost we
    account for in our planning.

    Counter-MANPADS
        The Counter-MANPADS program is focused on identifying, developing,
    and testing a cost-effective capability to protect the Nation's
    commercial aircraft against the threat of man-portable, anti-aircraft
    missiles. This program also provides the science and technology base
    needed to reduce the vulnerability of commercial aircraft to terrorist
    attack using man-portable anti-aircraft missiles.
        Over the past year, we have had a successful solicitation
    announcing a program to address the potential threat of MANPADS to
    commercial aircraft. White papers responding to the Counter-MANPADS
    program solicitation were reviewed by technical experts from the
    Department of Homeland Security, Department of Defense, and other
    government agencies; proposals were evaluated; and awards were made to
    three contractor teams to perform the first of two program phases,
    which began in January, 2004. The first phase will result in a
    preliminary design and a test plan to demonstrate missile
    countermeasure equipment on selected commercial aircraft.
        The second program phase is an 18-month effort beginning in August
    2004, with the one or two contractors that produced the most promising
    results in Phase One. During this phase, the commercial prototype
    countermeasure equipment will be integrated on selected commercial
    aircraft, and live-fire range tests will be accomplished with extensive
    data collection and analysis. Results of this second phase will be
    presented to the Administration and Congress to aid in formulating an
    informed decision on how best to address the protection of commercial
    airlines from the MANPADS threat.

    SAFECOM
        The SAFECOM (Wireless Public SAFEty Interoperable COMmunications)
    program is the umbrella initiative to coordinate all Federal, State,
    local, and Tribal users to achieve national wireless communications
    interoperability. The placement of SAFECOM in the Department of
    Homeland Security's Science and Technology Directorate allows it full
    access to the scientific expertise and resources needed to help our
    Nation achieve true public safety wireless communications
    interoperability.
        Since the Science and Technology Directorate formally assumed
    responsibility for the management of the SAFECOM program barely 7
    months ago:
      --SAFECOM has been established as the one umbrella group in the
            Federal Government for the management of public safety wireless
            interoperability programs;
      --Common grant guidance has been developed and incorporated in the
            public safety wireless interoperability grant programs of both
            the Department of Justice and the Department of Homeland
            Security;
      --A Federal coordinating structure has, for the first time, been
            created to coordinate all Federal public safety wireless
            interoperability programs;
      --The first catalog of national programs touching on public safety
            wireless interoperability has been developed and published; and
      --The ten major State and local organizations concerned with public
            safety wireless interoperability--the Association of Public-
            Safety Communications Officials (APCO), International
            Association of Fire Chiefs (IAFC), International Association of
            Chiefs of Police (IACP), Major Cities Chiefs Association (MCC),
            National Sheriffs' Association (NSA), Major County Sheriffs'
            Association (MCSA), National Association of Counties (NACO),
            National League of Cities (NLC), National Public Safety
            Telecommunications Council (NPSTC), and the United States
            Conference of Mayors (USCM)--released a statement in support of
            the SAFECOM program which declared that ``With the advent of
            the SAFECOM Program . . . Public safety, State and local
            government finally have both a voice in public safety
            discussions at the Federal level and confidence that the
            Federal Government is coordinating its resources.''

                                 PRIORITIZATION

        The Science and Technology Directorate has prioritized its research
    and development efforts based on the directives, recommendations and
    suggestions from many sources, including:
      --Homeland Security Act of 2002;
      --The fiscal year 2004 Congressional Appropriations for the
            Department of Homeland Security;
      --President Bush's National Strategy for Homeland Security, the
            National Strategy for the Physical Protection of Critical
            Infrastructure and Key Assets, the National Strategy to Combat
            Weapons of Mass Destruction, the National Strategy to Secure
            Cyberspace, and the National Security Strategy;
      --President Bush's nine Homeland Security Presidential Directives;
      --Office of Management and Budget's 2003 Report on Combating
            Terrorism;
      --Current threat assessments as understood by the Intelligence
            Community;
      --Requirements identified by other Department components;
      --Expert understanding of enemy capabilities that exist today or that
            can be expected to appear in the future; and
      --The report from the National Academy of Science on ``Making the
            Nation Safer: The Role of Science and Technology in Countering
            Terrorism,'' and the reports from the Gilmore, Bremer and Hart-
            Rudman Committees.
        Identifying and integrating the information contained in these
    sources has not been a small task, but the result, coupled with expert
    evaluation and judgment by our scientific staff, is the basis for
    determining the research and development needed to meet our mission
    requirements.

     DIVISION OF EFFORT AMONG THE DHS S&T DIRECTORATE AND RESEARCH EFFORTS
                          AT OTHER GOVERNMENT AGENCIES

        One of the accomplishments of which I am personally most proud is
    the emphasis our new Directorate has put on interacting with other
    Federal departments and agencies. Knowledge of other science and
    technology programs and their results, appropriate collaboration
    between agencies, coordination of relevant programmatic activities, and
    information sharing are essential for us to best meet our mission
    requirements. Science and Technology Directorate cybersecurity
    personnel and those at the National Science Foundation and the National
    Institute of Standards and Technology have already established
    collaborative and coordinated programs to ensure no duplication of
    effort. Our biological and chemical countermeasures staff have
    partnered with the Department of Defense's (DOD's) Defense Threat
    Reduction Agency (DTRA) to plan and execute the BioNet program and
    roadmap the biological countermeasures R&D programs in both agencies to
    understand capabilities and shortfalls. They work with the National
    Science Foundation on pathogen sequencing. The BioWatch program,
    although led by the Science and Technology Directorate, was
    accomplished through collaboration with personnel from the Department
    of Energy's National Laboratories, contractors, the Environmental
    Protection Agency, and the Centers for Disease Control and Prevention.
    We work with DOD's Office of Homeland Defense to ensure the effective
    transfer to the Department of relevant DOD technologies.
        Our high explosives scientists are working with the interagency
    Technical Support Working Group, managed by the Department of State, to
    evaluate commercial off-the-shelf systems with capabilities against
    suicide bombers. The Director of the Homeland Security Advanced
    Research Projects Agency is a member of the TSWG Executive Committee.
    Our staff are in frequent contact with the Office of Science and
    Technology Policy on a range of issues, and several are members and co-
    chairs of the Office of Science and Technology Policy's National
    Science and Technology Council. Our Office of Research and Development
    works closely with the Department of Agriculture to ensure that the
    Plum Island Animal Disease Center facility is operating smoothly and
    fully meeting its mission. The Office of Research and Development also
    interfaces with the Department of Energy to keep the Office of Science,
    as well as the National Nuclear Security Administration, apprised of
    our long-term homeland security requirements.
        The Department of Homeland Security, Science and Technology
    Directorate recognizes that many organizations are contributing to the
    science and technology base needed to enhance the Nation's capabilities
    to thwart terrorist acts and to fully support the conventional missions
    of the operational components of the Department. Congress recognized
    the importance of the research and development being conducted by
    numerous Federal departments and agencies, and, in the Homeland
    Security Act of 2002, directed the Under Secretary of Science and
    Technology to coordinate the Federal Government's civilian efforts to
    identify and develop countermeasures to current and emerging threats.
        We take this responsibility very seriously.
        We are now initiating the effort needed to coordinate homeland
    security research and development across the entire United States
    Government. It will come as no surprise to the members of this
    Subcommittee that good, solid, effective research and development
    relevant to homeland security is being conducted by the Departments of
    Agriculture, Commerce, Defense, Energy, Justice, Health and Human
    Services, State, and Veteran's Affairs; within the National Science
    Foundation, the Environmental Protection Agency and other Federal
    agencies; and by members of the Intelligence Community.
        Several interagency working groups already exist that are
    addressing issues important to homeland security. The Science and
    Technology Directorate has been, and continues to be, an active
    participant in these working groups, and in most cases has taken a
    leadership role. These fora foster an active exchange of information
    and assist each participating agency in identifying related needs and
    requirements, conducting research and development of mutual benefit,
    and avoiding duplication of effort.
        We also continue to have discussions at multiple levels of
    management with Federal departments and Agencies, as well as with the
    Office of Management and Budget, the Office of Science and Technology
    Policy, and the Homeland Security Council. These discussions ensure
    that the strongest possible links are made and the best possible
    coordination occurs between our Department and those who are conducting
    sector-specific research. By the autumn of 2004, all Department of
    Homeland Security research and development programs will be
    consolidated and all United States Government research and development
    relevant to fulfilling the Department's mission will have been
    identified and coordinated as appropriate. It is important to note that
    this identification and relevant coordination does not imply the
    Department of Homeland Security should have the responsibility and
    authority for these programs within other Federal agencies; it does
    recognize that science and technology advances can have many
    applications, including homeland security.

                        OUTSIDE INPUTS TO THE S&T BUDGET

        The Science and Technology Directorate's budget is built to meet
    the Department's and our mission requirements. As previously discussed,
    we identify and prioritize our efforts using multiple national sources
    and the sharing of information relevant to homeland security among
    government organizations. Our Homeland Security Science and Technology
    Advisory Committee will hold its first meeting February 26-27, 2004,
    and this group will also provide input to the scope, priority and level
    of effort needed to meet our objectives.

          METRICS DEVELOPED BY THE SCIENCE AND TECHNOLOGY DIRECTORATE

        The success of the Science and Technology Directorate depends on
    its ability to identify, develop and transition capabilities to end-
    users that enhance the Nation's ability to protect itself. Appropriate
    goals and performance measures must be identified and used to measure
    our progress. The following table identifies the programmatic metrics
    developed by the Science and Technology Directorate's portfolio
    managers; these metrics will be used to measure our performance.
    ST0001 Biological Countermeasures
        Long term performance goal.--The United States will have a high-
    performance and well-integrated biological threat agent warning and
    characterization system that will include sustainable environmental
    monitoring capability for metropolitan areas; a national special
    security event system for the Nation at large; and identification of
    needs for vaccines and therapeutics for people and animals. Longer term
    research will support the development of biological threat warning and
    characterization systems that address both current and future threats.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    Capability to detect and assess biological  FAR=10EE-4, Multiplex 10
     threats, measured by a set of attributes:   assays
     increase sensitivity by decreasing false
     alarm rate (FAR), and increase multiplex
     samples.
    Fiscal year 2005 milestones:                Milestones will be achieved
     Decontamination technologies and
     standards for facilities and outdoor
     areas. National Academy of Science study
     characterizes contamination risks.
    Fiscal year 2005 milestones: Establishment  Milestones will be achieved
     of a national capability in biodefense
     analysis and agro-bioterrorism
     countermeasures. Research operations
     begin; phased construction continues.
     BioForensics Analysis Center Hub
     operational.
    Improved capabilities to detect threats in  Milestone will be achieved
     urban areas (Urban Monitoring Program),
     measured by increased sampling coverage
     and frequency, and capability to detect
     additional threats. Fiscal year 2005
     milestone: increase coverage in top
     threat cities.
    Integrated field demonstrations of next-    2 Demos operational
     generation solutions (Domestic
     Demonstrations and Applications Program).
    Validated human and agricultural bioassays  10
    ------------------------------------------------------------------------

    ST0002 Chemical Countermeasures
        Long term performance goal.--Develop and deploy a broad capability
    to prevent and rapidly mitigate the consequences of chemical attacks.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    Fiscal year 2005 milestone: Development of  Milestone will be achieved
     protocols for the highest priority toxic
     industrial chemicals (TICs) and toxic
     industrial materials (TIMs).
    ------------------------------------------------------------------------

    ST0003 Chemical High Explosives
        Long term performance goal.--The Chemical High Explosives portfolio
    will improve explosives detection equipment and procedures for all
    forms of transportation as well as fixed facilities.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    Fiscal year 2005 milestone: Pilot tests of  Milestone will be achieved
     standoff detection technologies.
    ------------------------------------------------------------------------

    ST0004 Radiological & Nuclear Countermeasures
        Long term performance goal.--By fiscal year 2009, an effective
    suite of countermeasures against radiological and nuclear threats will
    be developed with capabilities in detection, intelligence analysis,
    response, and preparedness.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    Federal, State and local sites that are     5
     integrated into an operational secondary
     reachback architecture to resolve
     radiological and nuclear alarms.
    Performance measures associated with Test   Milestone will be achieved
     and Evaluation (T and E) of developmental
     prototypes of Radiation Detectors.
     Establish a long-range plan for T and E
     capability.
    Progression on planned capability           Milestone will be achieved
     development for Nuclear Incident
     Management and Recovery. Demonstrate 2
     advanced detection technologies.
    Progression on pre-planned product          Milestone will be achieved
     improvement of deployed technologies.
     Perform critical design reviews for Phase
     One technology improvements for projects
     awarded in fiscal year 2004.
    ------------------------------------------------------------------------

    ST0005 Threat and Vulnerability, Testing & Assessments
        Long term performance goal.--Provide measurable advancements in
    information assurance, threat detection and discovery, linkages of
    threats to vulnerabilities, and capability assessments and information
    analysis required by Departmental missions to anticipate, detect,
    deter, avoid, mitigate and respond to threats to our homeland security.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    Improvement in the national capability to   Improvement in 7 categories
     assess threats and vulnerabilities to
     terrorist attacks: 10 categories to be
     assessed.
    ------------------------------------------------------------------------

    ST0006 Standards
        Long term performance goal.--Establish an integrated infrastructure
    for determining and developing standards, and test and evaluation
    protocols for technology used for detecting, mitigating, and recovering
    from terrorist attacks and also to support other Departmental
    components' technologies. Provide consistent and verifiable measures of
    effectiveness of homeland security-related technologies, operators, and
    systems in terms of basic functionality, interoperability, efficiency,
    and sustainability. Facilitate the development of guidelines in
    conjunction with both users and developers.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    Long-term implementation of SAFETY Act....  Certifications
    Fiscal year 2005 milestones: Technical      Milestones will be achieved
     standards and test/evaluation protocols
     will be established for WMD
     decontamination technologies and analysis
     tools. ``Consumer's report'' on radiation
     and bioagent detection devices for
     Federal, State, and local users will be
     published.
    ------------------------------------------------------------------------

    ST0008 Homeland Security Fellowship Programs/University Programs
        Long term performance goal.--Significantly increase the number of
    U.S. students in fields relevant to homeland security including the
    physical life and social sciences; and engineering.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    To increase the nation's science and        200 students 3 centers
     technology workforce and research
     capability on issues related to homeland
     security. Fiscal year 2005: students
     supported/Centers of Excellence
     established.
    ------------------------------------------------------------------------

    ST0009 Emerging Threats
        Long term performance goal.--To develop effective capabilities to
    characterize, assess, and counter new and emerging threats, and to
    exploit technology development opportunities as they arise.

    ------------------------------------------------------------------------
               Performance measures                Fiscal year 2005 target
    ------------------------------------------------------------------------
    Improved capability to prevent terrorist    Baseline
     attacks through annual emerging threat
     assessment report (percent of responding
     recipients indicating the report is
     valuable).
    ------------------------------------------------------------------------

    ST0010 Rapid Prototyping
        Long term performance goal.--Support the development of innovative
    solutions to enhance homeland security and work with Federal, State,
    and local governments; and the private sector to implement these
    solutions. In partnership with the Technical Support Working Group
    (TSWG), operate an effective and efficient clearinghouse that will
    develop, prototype, and commercialize innovative technologies to
    support the homeland security mission.

    ------------------------------------------------------------------------
                                                                Fiscal year
                      Performance measures                      2005 target
    ------------------------------------------------------------------------
    Technologies prototyped or commercialized...............               3
    ------------------------------------------------------------------------

    ST0011 SAFECOM
        Long term performance goal.--Provide public safety agencies with
    central coordination, leadership and guidance to help them achieve
    short-term interoperability and long-term compatibility of their radio
    networks across jurisdictions and disciplines.

    ------------------------------------------------------------------------
                                                                Fiscal year
                      Performance measures                      2005 target
    ------------------------------------------------------------------------
    Increased interoperability across local, tribal, State,                3
     and Federal public safety jurisdictions and
     disciplines. Fiscal year 2005: Based on fiscal year
     2004 baseline, improvements in 3 categories............
    ------------------------------------------------------------------------

    ST0012 Counter Man-Portable Air Defense System (MANPADS)
        Long term performance goal.--The Nation will have effective
    capabilities to defeat the threat to commercial aircraft of man-
    portable anti-aircraft missiles.

    ------------------------------------------------------------------------
                                                                Fiscal year
                      Performance measures                      2005 target
    ------------------------------------------------------------------------
    Effective technology/technologies for commercial                       2
     aircraft to defeat man-portable anti-aircraft missiles
     identified. Fiscal year 2005: Technologies identified,
     and prototypes developed and tested....................
    ------------------------------------------------------------------------

    ST007 Support to Department of Homeland Security Components
        Long term performance goal.--Increase the capabilities of mission-
    focused operational components (BTS, EP&R, Coast Guard, and Secret
    Service) to secure the homeland and enhance their ability to conduct
    their missions.

    ------------------------------------------------------------------------
                                                                Fiscal year
                      Performance measures                      2005 target
    ------------------------------------------------------------------------
    Improved capability of DHS Components to secure the             Baseline
     homeland as measured by assessment of customer
     organizations in accomplishing agreed-upon areas of
     assistance.............................................
    ------------------------------------------------------------------------

                       short-term and long-term research
        In the 11 months that this Department has been in existence, the
    Science and Technology Directorate has focused its initial efforts on
    near-term development and deployment of technologies to improve our
    nation's ability to detect and respond to potential terrorist acts.
    However, we recognize that a sustained effort to continually add to our
    knowledge base and our resource base is necessary for future
    developments. Thus, we have invested a portion of our resources,
    including our university programs, toward these objectives. The
    following table indicates our expenditures in basic research, applied
    research, and development to date, excluding construction funding.

                                   SCIENCE AND TECHNOLOGY DIRECTORATE R&D INVESTMENTS
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year     Fiscal year
                               Fiscal year                              Fiscal year        2004            2005
                                                                          (actual       (estimated)     (proposed)
    ----------------------------------------------------------------------------------------------------------------
    Basic...........................................................              47             117              80
    Applied.........................................................              59              56             229
    Developmental...................................................             398             608             643
                                                                     -----------------------------------------------
          Total.....................................................             504             781             952
                                                                     -----------------------------------------------
    Percent basic...................................................             9.3            15.0             8.4
    ----------------------------------------------------------------------------------------------------------------

        Our initial expenditures in basic research are heavily weighted by
    our investments in university programs. These university programs will
    not only provide new information relevant to homeland security, but
    will also provide a workforce of people who are cognizant of the needs
    of homeland security, especially in areas of risk analysis, animal-
    related agro-terrorism, bioforensics, cybersecurity, disaster modeling,
    and psychological and behavioral analysis.
        We expect to gradually increase our total percentage of basic and
    applied research to the level needed for sustaining our role as a
    research, development, testing and evaluation (RDT&E) organization.

     RATIONALE FOR BUDGET INCREASES: BIOWATCH AND THE NATIONAL BIODEFENSE
                      ANALYSIS AND COUNTERMEASURES CENTER

        President Bush's fiscal year 2005 budget request includes a $274
    million Bio-Surveillance Program Initiative to protect the Nation
    against bioterrorism and to strengthen the public health
    infrastructure. Included in this request is an increase of $65 million
    for the Science and Technology Directorate to enhance current
    environmental monitoring activities. This requested increase is a
    direct outgrowth of the recently completed joint Homeland Security
    Council--National Security Council (HSC-NSC) Bio-Defense End-to-End
    study which identified the need for an integrated, real-time, human-
    animal-plant surveillance system as a top priority national need. The
    DHS BioWatch system, which currently provides a bio-aerosol warning for
    most of this nation's large metropolitan areas, figures prominently in
    the integrated Biosurveillance initiative. This initiative would
    entail: (1) Expanding BioWatch coverage in the top ten threat cities;
    and (2) Piloting of an integrated attack warning and assessment system
    known as BWICS (BioWarning and Incident Characterization System).
    Currently the ``average'' BioWatch city has about 10 collectors per
    city. Systems studies and city feedback provide a more needs based'
    guide to the optimal number of collectors in our large, high threat
    cities. The systems studies show that about 40-60 collectors provide
    optimal outdoor coverage for a city, while the cities themselves have
    requested additional collectors for key facilities (transit systems,
    airports, stadiums). Alternate labor contracting processes, simplified
    sample handling techniques, and the introduction of additional
    automation in analyses will allow us to do this expansion in a cost
    effective manner.
        The BWICS pilot will integrate real-time bio-surveillance and
    environmental monitoring data with plume hazard predictions,
    epidemiological forecasts, population and critical infrastructure
    databases, and other available resources in two of the highest threat
    cities.
        We also will accelerate R&D on next generation environmental
    monitoring systems. New classes of detectors, that can identify bio-
    agents in 2 minutes or less with incredibly low false alarm rates will
    make it possible to do detect-to-protect for key facilities--allowing
    one to reroute air flow or evacuate a facility so as to minimize
    exposure and not simply begin the onset of early treatment. And
    tailoring of existing and emerging detection systems to monitoring key
    high volume nodes in our food processing will be critical to the
    development of proposed food shields.
        The National Biodefense Analysis and Countermeasures Center (NBACC)
    provides scientific support for intelligence activities, prioritizes
    biothreats, and also conducts bioforensic analyses contributing to
    attribution and hence to deterrence. Specifically, the NBACC (both
    facilities and programs) will support public and agricultural health,
    law enforcement, and national and homeland security by providing hub
    laboratory capabilities for:
      --Dedicated and accredited bio-forensic analysis capabilities to
            support attribution of the use of bio-threat agents (BTA) by
            criminals, non-State, and State-sponsored actors
      --Laboratory-based, scientific data from the analysis and assessment
            of biological threats to human health and agriculture to
            support a national bio-defense net assessment--fundamental to
            development of national plans, risk assessment evaluations and
            priorities to deter, detect, mitigate and recover from BTA
            attack
      --Applied models, materials, and validation processes to evaluate BTA
            countermeasures
      --Evidenced-based subject matter expertise to integrate, analyze and
            distribute critical bio-defense and related information
            assembled from multiple sources through a high security and
            open clearinghouse.

         TRANSFER OF R&D BUDGETS AND ACTIVITIES FROM OTHER DIRECTORATES

        The Science and Technology Directorate is both a generator and a
    consumer of scientific and technological advances resulting from basic
    and applied research and development. We also have a responsibility for
    testing and evaluating capabilities to ensure that their deployment
    results in improved operational systems. Standards are needed to assist
    first responders and operational components of the Department in
    evaluating, procuring, and deploying new capabilities. This is a broad
    range of responsibility and one we take seriously. The Department has
    defined R&D activities as follows:
        Activities associated with R&D efforts include the development of a
    new or improved capability to the point where it is appropriate for
    operational use, including test and evaluation. R&D activities include
    the analytic application of scientific and engineering principles in
    support of operational capabilities, concept exploration, systems
    development, proof of principle demonstration and pilot deployments,
    standards development, and product improvement including application
    and integration of technologies. For mission (non-management) systems,
    resources associated with developing technology to provide new
    capabilities (including systems engineering, research, development,
    testing and prototyping) are covered under the R&D category.
        This definition encompasses all of the research, development, test,
    and evaluation (RDT&E) efforts of the Science and Technology
    Directorate. It also encompasses RDT&E efforts currently existing in
    other parts of the Department of Homeland Security. The Science and
    Technology Directorate has been tasked to consolidate these activities
    from elsewhere within the Department into our directorate.
        We have begun this coordination process by evaluating and producing
    a report on the research, development, testing, and evaluation work
    that was being conducted within the Department of Homeland Security but
    was not already under the direct cognizance of the Science and
    Technology Directorate. Where it is appropriate, the Science and
    Technology Directorate will absorb these R&D functions. In other cases,
    the Science and Technology Directorate will provide appropriate input,
    guidance, and oversight of these R&D programs.
        Research and Development activities are ongoing in fiscal year 2004
    within the following departmental elements: Border and Transportation
    Security (BTS), Emergency Preparedness and Response (EPR), United
    States Coast Guard (USCG), and United States Secret Service (USSS). The
    Information Analysis and Infrastructure Protection (IAIP) Directorate
    reported no fiscal year 2004 R&D activities.
        The fiscal year 2005 President's Budget contains three programs
    that have been identified to transfer to the Science and Technology
    Directorate. They are United States Coast Guard RDT&E activities
    conducted at their Groton, CT laboratory ($13.5 million); Emergency
    Preparedness and Response RDT&E activities supporting the U.S. Fire
    Administration ($0.65 million); and ICE-Federal Air Marshall's RDT&E
    activities supporting the development of their Air-to-Ground
    Communication System ($10 million).
        The transfer of these three RDT &E Programs is only the start and
    not the complete identification of the potential programs to review for
    consideration. S&T will be working throughout the year with the
    Department and with Congress to identify other existing programs and
    transfer them consistent with direction.

               BUDGET AND ACTIVITIES SUPPORTING CYBERSECURITY R&D

        The cybersecurity program within the Science and Technology
    Directorate is conducted by the Threat and Vulnerability, Testing and
    Assessment portfolio. The approach of this program includes addressing
    areas not currently addressed elsewhere in the Federal Government. An
    example of this is developing tools and techniques for assessing and
    detecting the insider threat. The cybersecurity budget request for
    fiscal year 2005 is $18 million.
        An important component of the cybersecurity program is coordination
    with others who are performing cyber research and who are responsible
    for cybersecurity. For example, our staff have engaged in a series of
    meetings with staff members from the Department's Information Analysis
    and Infrastructure Protection Directorate (IAIP), both the National
    Cyber Security Division and National Communications System. These
    meetings provide an venue for general exchanges of information about
    each organizations' respective plans for cybersecurity, as well as
    specific discussions focused on IAIP technical requirements to feed
    into cybersecurity R&D programs funded by the Science and Technology
    Directorate.
        Further, we are coordinating with the National Institute for
    Standards and Technology (NIST) and the National Science Foundation
    (NSF) to plan our respective roles. We are funding two projects with
    NIST, Secure Domain Name System and Secure Border Gateway Protocol,
    which are protocols that the Internet relies on to function. We are co-
    funding two projects with the NSF: a research project to create an
    experimental infrastructure network to support development and
    demonstration of next generation information security technologies for
    cyber defense, called Cyber Defense Technology Experimental Research
    (``DETER'') Network; and a project called Evaluation Methods in
    Internet Security Technology (EMIST), a testing framework that will
    include attack scenarios, attack simulators, generators for topology
    and background traffic, data sets derived from live traffic, and tools
    to monitor and summarize results.

            BASIS FOR POLICY ON THE USE OF THE NATIONAL LABORATORIES

        The Science and Technology Directorate has identified separate
    mechanisms to access the capability base at the DOE national
    laboratories and sites to guard against organizational conflicts of
    interest and inappropriate use of inside information in responding to
    competitive private sector solicitations. Five national laboratories
    (Livermore, Los Alamos, Oak Ridge, Pacific Northwest, and Sandia) have
    been identified as Intramural Laboratories. These labs will help S&T
    set research goals and requirements and formulate R&D road maps. This
    level of engagement would give the intramural labs unfair advantage if
    they were permitted to compete for funding awarded through open
    solicitations.
        All other DOE laboratories and sites have been identified as
    Extramural Laboratories. Because the Extramural Laboratories will not
    be involved in internal DHS research planning, they are eligible to
    compete in Homeland Security Advanced Research Projects Agency (HSARPA)
    and Systems Engineering and Development (SED) funding, such as the
    Broad Agency Announcement (BAA) valued at $50 million for radiological/
    nuclear technologies that was recently issued. The majority of the
    Science and Technology Directorate's funding will be executed through
    HSARPA and SED. These labs may also freely team with industrial
    partners to seamlessly commercialize technologies they have developed.

        BUDGET FOR UNIVERSITY CENTERS OF EXCELLENCE AND FELLOWS PROGRAMS

        The President's fiscal year 2005 budget request of $30 million will
    sustain the current scholars and fellows program and a total of three
    Homeland Security Centers of Excellence. Each additional Center of
    Excellence would require a sustained investment of $5 million per year.
    If more than a total of three Centers of Excellence are desired without
    increasing the President's fiscal year 2005 budget request, a reduction
    in the scholars and fellows program would be required.

                                    STAFFING

        When the Department of Homeland Security (DHS) stood up on March 1,
    2003, the Science and Technology Directorate had a total staff of about
    87, including the 53 staff transferred from the Department of Energy's
    Environmental Measurements Laboratory. The balance was comprised of
    permanently assigned personnel, employees detailed from within and
    without the Department, Intergovernmental Personnel Act assignments,
    and personnel support from the National Laboratories.
        By January 6, 2004, we more than doubled our staff. In January
    2004, we had a total staff of 212, including 100 DHS employees, six
    Public Health Service Officers, 21 Intergovernmental Personnel Act
    employees, 26 individuals on assignment from other agencies, and 59
    contractors.
        We continue to be active in staffing our Directorate with well-
    qualified individuals whose skills support the full breadth of our
    responsibilities and RDT&E activities. We continue to actively seek
    additional staff in accordance with our approved staffing plan.

                                   CONCLUSION

        With less than a full year under the Department's belt, the
    scientists and engineers in the Science and Technology Directorate have
    accomplished more than I could have expected. I am proud to have shared
    with you today some of those success stories. We have appended a more
    comprehensive summary of accomplishments to date for the record.
        And yet, we also recognize that there is much to do, and we will be
    working just as hard in fiscal year 2005.
        I look forward to continuing to work with you on the Cybersecurity,
    Science, and Research & Development Subcommittee; other Federal
    departments and agencies; the academic community; and private industry
    to continue the work begun and continually improve our ability to
    protect our homeland and way of life.
        Mr. Chairman, Senator Byrd, and Members of the Subcommittee, this
    concludes my prepared statement. I thank you for the opportunity to
    appear before this committee and I will be happy to answer any
    questions you may have.
                                    APPENDIX

           ACCOMPLISHMENTS OF THE SCIENCE AND TECHNOLOGY DIRECTORATE

    Biological and Chemical Countermeasures
                Biowatch: National Urban Monitoring for Biological
                        Pathogens
        The Biowatch program has been established and deployed to cities
    across the nation. The program--developed, funded, and managed by the
    Science and Technology (S&T) Directorate--is executed in cooperation
    with the Environmental Protection Agency (EPA) and the Centers for
    Disease Control and Prevention (CDC). It employs environmental sampling
    devices to quickly detect biological pathogens, such as anthrax, in
    time to distribute life-saving pharmaceuticals to affected citizens.
    The S&T Directorate is now focusing its efforts on piloting the next
    generation of environmental samplers, which will reduce the amount of
    labor required and the response time needed for detection while keeping
    the detection probability high and false alarm rates low. These devices
    will take advantage of the latest advances in micro-chemistry, commonly
    referred to as ``chemistry on a chip.''

                PROTECT (Program for Response Options and Technology
                        Enhancements for Chemical Terrorism): Chemical
                        Defense and Response Capability for Transportation
                        Facility
        The S&T Directorate, in collaboration with the Washington
    Metropolitan Area Transit Authority (WMATA), completed PROTECT (Program
    for Response Options and Technology Enhancements for Chemical/
    Biological Terrorism). PROTECT, which is an operational chemical agent
    detection and response capability, is deployed in Metro stations and
    operated by the WMATA. PROTECT is a team effort that owes its success
    to the scientific and engineering talent from Argonne, Sandia, and
    Livermore National Laboratories and operational expertise from WMATA
    and the First Responder community (the District of Columbia; Arlington,
    VA; Montgomery County, MD; and others). Also contributing significantly
    to the project are private industry partners, including LiveWave Inc.,
    ManTech Security Technology, the detector manufacturer (name withheld
    for security reasons); and Federal partners, including the Federal
    Transit Administration (FTA), Department of Transportation (DOT),
    National Institute of Justice (NIJ), and the Department of Homeland
    Security's (DHS's) Office of Domestic Preparedness (ODP). The system
    integrates chemical detector data and video feed and transmits the
    integrated information to the Operation Control Center (OCC), where the
    information is analyzed and an event confirmed. The information is then
    transmitted to the first responders who access it in both their OCC and
    through the use of wired jacks on the scene to facilitate response and
    recovery. PROTECT also has application in other areas, including fire
    and emergency response, security, and forensics. Upon completion, the
    system will be totally owned and operated by WMATA and expanded to
    approximately 20 stations. FTA is working with WMATA and Argonne
    National Laboratory to transfer the technology nationally. The
    information gleaned from PROTECT will have direct application to
    facility protection and response. A related effort is being piloted in
    the Boston subway system.

                Joint Urban 2003: Experimental Atmospheric Transport and
                        Modeling
        In June 2003, the S&T Directorate, in coordination with the
    Department of Defense's Defense Threat Reduction Agency, Department of
    Energy, and University of Oklahoma sponsored a month-long atmospheric
    dispersion study in Oklahoma City, OK. Nearly 150 scientists,
    engineers, and student assistants were dedicated to this study, which
    tracked the air movement of safe, non-toxic tracer gases in and around
    city buildings. The resulting data is being used to enhance and develop
    urban-specific atmospheric dispersion computer models that will allow
    emergency management, law enforcement and other personnel to train for
    and respond to potential chemical, biological, and radiological
    terrorist attacks.

                ProACT (Protective and Response Options for Airport Counter
                        Terrorism): Chemical and Biological
                        Counterterrorism Demonstration and Application
                        Program
        The S&T Directorate and its partners at the San Francisco
    International Airport are involved in a pilot program that couples
    biological and chemical detection with vulnerability analysis,
    response, and restoration. This program integrates networked sensors
    with the operation of ventilation systems, allowing redirection of
    contaminated air and effective evacuation should an event occur.
    Guidance for the airport facility operators to manage biological and
    chemical crises will be finalized soon for distribution throughout the
    applicable community. Protocols and concepts of operation for
    restoration also are under development. This program is designed to
    serve as a template for deployment of these capabilities to other
    similar facilities.

                LINC (Local Integration of National Atmospheric Release
                        Advisory Center (NARAC) with Cities): Hazard
                        Assessment Tool for Operational Event Management
        LINC demonstrates the capability for providing local government
    agencies with advanced operational atmospheric plume prediction
    capabilities that can be seamlessly integrated with appropriate Federal
    agency support for homeland security. LINC's approach is to integrate
    NARAC capabilities with local emergency management and response
    centers. In the event of a chemical or biological release, NARAC
    predictions can be used by emergency managers and responders to map the
    extent and effects of hazardous airborne material. Prompt predictions
    are provided to guide front-line responders in determining protective
    actions to be taken, critical facilities that may be at risk, and safe
    locations for incident command posts. LINC provides response teams from
    multiple jurisdictions with tools to effectively share information
    regarding the areas and populations at risk. To date, several cities
    have participated in the project. New York City used LINC to help
    inform and manage an explosion and fire at a Staten Island refinery in
    the Spring of 2003.

                BioNet: Integrated Civilian and Military Consequence
                        Management
        The Department of Homeland Security (DHS) and the Department of
    Defense's Defense Threat Reduction Agency have initiated the BioNet
    program to address joint civilian-military consequence management
    issues for localities near military bases. Upon completion of BioNet, a
    seamless consequence management plan that incorporates concepts of
    operation, information products, area monitoring, population health
    monitoring, and sample analysis laboratory will be developed that can
    be used nationally.

                Plum Island Animal Disease Center (PIADC)
        The S&T Directorate assumed responsibility for the operations of
    the ``facilities and liabilities'' of PIADC in June 2003. A 60-day
    review of security and operations resulted in immediate improvements
    and a plan for enhancements to security and operational maintenance.
    Dr. Beth Lautner has become new Center Director for PIADC. Dr. Lautner
    was with the National Pork Board for 13 years, most recently serving as
    the vice-president of Science and Technology. Highly respected
    throughout animal agriculture for her work on numerous issues, she
    pioneered the establishment of the Pork Quality Assurance (PQA) Program
    and has worked extensively with the USDA and other organizations on
    national agricultural security issues. In 1994, she was awarded the
    prestigious Howard Dunne Memorial Award by the association. In
    addition, DHS announced on December 9, 2003, the selection of Field
    Support Services, Inc. (FSSI), as the new contractor for maintenance at
    PIADC. FSSI is a subsidiary of Arctic Slope Regional Corporation, an
    Alaskan Native corporation, headquartered in Barrow, Alaska.

                TOPOFF2 Exercise
        In May 2003, leadership and staff members of the Science and
    Technology Directorate served as members of the Secretary's Crisis
    Assessment Team (CAT) and the interagency Domestic Emergency Support
    Team (DEST) and provided expert technical advice on understanding,
    communicating and responding to the hypothetical radiological and
    plague events during the TOPOFF2 exercise.

    Radiological and Nuclear Countermeasures Programs
                Radiation Detection in Metropolitan Areas
        The Science and Technology division formally assumed management of
    the Port Authority of New York and New Jersey's radiation detection
    test bed on August 2003. The test bed was previously managed by the
    U.S. Department of Energy. The transfer will broaden the project scope
    beyond testing and evaluation of individual pieces of technology to a
    systems approach including response protocols and operational concepts.
    Radiation detection equipment will be installed at tunnels, bridges,
    ports, and airports in the New York City metropolitan area, and all
    functions associated with their operational use will be evaluated. By
    judging the efficacy of fielded systems over time, the Science and
    Technology division will be able to influence future decisions on
    detection technology R&D investment, deployment of urban monitoring
    systems, configurations best able to enhance security, and viable
    solutions for protecting the Nation from radiological and nuclear
    threats.

                Determined Promise Exercise
        In August 2003, staff members of the S&T Directorate participated
    in Determined Promise, a Department of Defense (DOD) exercise held in
    Las Vegas, NV. The exercise demonstrated the military's capability to
    assist in the response to a natural disaster, a bioterrorism event, and
    a number of other emergency situations nationwide. The exercise also
    provided a forum for initiating discussions that will foster
    interagency cooperation between DHS and USNORTHCOM.

                Nuclear Threat Assessments
        The S&T Directorate has provided eight rapid nuclear threat
    assessments for the Federal Bureau of Investigation (FBI), and
    approximately two dozen assessments on reports of illicit trafficking
    in nuclear materials for the Department of State and other customers.
    The Department of Homeland Security has been leading the interagency
    Nuclear Trafficking Focus Group, which regularly brings together the
    operational players of all agencies involved in response to and
    understanding of nuclear smuggling events.

                Secondary ``Reach Back''
        In August 2003, the S&T Directorate's Nuclear Assessment Program
    stood up a system to provide secondary ``reach back'' support to
    operational DHS entities employing radiation detection systems in the
    field. Secondary reach back provides inspectors with an additional
    information resource to utilize for the resolution of radiation
    detection alarms that draws upon experience in the analysis of nuclear
    smuggling incidents and threat analysis.

    Standards
                Radiation Detection
        The S&T Directorate has developed a suite of four radiation
    detector standards under the auspices of the American National
    Standards Institute (ANSI)'s Accredited American Standards Committee on
    Radiation Instrumentation. The four standards deal with radiation
    pagers, hand-held dosimetry instruments, radioisotope identifiers and
    radiation portal monitors. The S&T Directorate has formed three writing
    groups to prepare Test and Evaluation (T&E) protocols for hand-held
    radiation detectors, radionuclide identifiers and radiation portal
    monitors. The writing groups have met in working sessions in San Diego,
    CA (July 2003) and Las Vegas, NV (September 2003) and have prepared
    draft T&E protocols. Benchmark testing against these draft protocols
    has been initiated at four National Laboratories.

                Biopathogen Identification
        The Science and Technology Directorate has partnered with the
    Department of Defense, Office of the Secretary of Defense to fund a
    contract with the Association of Analytical Communities International
    to develop Reference Methods and Official Methods for bulk assay of
    bacillus anthracis. This work will also permit the comparison of
    commercially available rapid identification methods (hand-held assays)
    for B. anthracis.

                SAFETY Act
        On October 10, 2003, Secretary Ridge signed an interim final rule
    implementing the Support Anti-Terrorism by Fostering Effective
    Technologies (SAFETY) Act which was a requirement of the Homeland
    Security Act of 2002. The SAFETY Act is designed to encourage the
    development and rapid deployment of life-saving, anti-terrorism
    technologies by providing manufacturers and sellers with limited
    liability risks. The Department is now accepting applications for
    designation under the Act and evaluating the proposed technologies.

    Interoperability of Communications
                SAFECOM: E-Gov Initiative to Improve Interoperability of
                        Wireless Communications
        The Department of Homeland Security is taking steps to boost the
    ability of the approximately 44,000 local, tribal and State entities
    and 100 Federal agencies engaged in public safety to communicate
    effectively with one another, particularly during an emergency. SAFECOM
    is a Federal umbrella program under the S&T Directorate that is
    dedicated to improving public safety response through enhanced
    interoperable wireless communications. The goal is to enable public
    safety agencies to talk across disciplines and jurisdictions via radio
    communications systems, exchanging voice or data with one another on
    demand and in real time. SAFECOM is providing seed money for the
    Department of Justice's Integrated Wireless Network program, which will
    create interoperability among local, State and Federal public safety
    agencies in 25 cities. In addition, technical guidance for
    interoperable communications that was developed under SAFECOM is
    included in this year's Office of Domestic Preparedness grants.

                Summit on Interoperable Communications for Public Safety
        In June 2003, the S&T Directorate, Project SAFECOM, the National
    Institute of Standards and Technology (NIST) and the National Institute
    of Justice hosted a Summit on Interoperable Communications for Public
    Safety. The event focused on familiarizing attendees with programs that
    assist public safety practitioners, including first responders, and is
    the first national effort ever undertaken to convene all the players.
    In addition, it provided insight on Federal resource needs, how
    government can leverage existing program successes and resources in the
    area of standards development, approaches, and products and services.
    The Summit results provided help in formulating a coordinated approach
    toward nationwide communications interoperability.

                SAFECOM Vendor Demonstration Day
        In August 2003, the Science and Technology Directorate held its
    first SAFECOM Vendor Demonstration Day, with an overwhelmingly positive
    response from technology providers. Due to the increasing number of
    vendor requests to present their technologies to the SAFECOM Program,
    the S&T Directorate is holding a vendor demonstration day on the last
    Friday of every month. These Friday sessions will offer a chance for
    SAFECOM to learn about new technologies for interoperability, provide a
    clear process for managing vendor requests, and ensure that every
    vendor has a fair opportunity to participate.

    Information Analysis and Infrastructure Protection Programs
                Addressing Threats and Vulnerabilities in the Oil and Gas
                        Industries
        The S&T Directorate sponsored and delivered a prototype system to
    the Information Analysis and Infrastructure Protection (IAIP)
    Directorate to perform Graphical Information System (GIS) based
    computer assisted threat and vulnerability mapping of the oil and gas
    infrastructure in the American Southwest. S&T is also in the process of
    delivering to IAIP cutting edge visualization, data searching, data
    correlation, and all-source analytic aids to provide IAIP advanced
    analytic capabilities integrated with vulnerability information.

                Advanced Algorithms for Biodetectors
        Researchers funded by the S&T Directorate's Advanced Scientific
    Computing Research & Development program achieved an important
    milestone in the speed acceleration of software used to develop
    advanced biodetectors. Scientists have made a pair of related
    algorithmic advances that will speed the creation of DNA signatures for
    pathogen detection at considerably reduced cost. These discoveries will
    result in cheaper, faster, and more reliable bio-detectors for homeland
    security.

                Threat-Vulnerability Mapper
        Part of the Threat-Vulnerability Information System, the Threat-
    Vulnerability Mapper (or TVM), was installed in the analysis center of
    the Information Analysis and Infrastructure Protection Directorate in
    December 2003 and is already in constant use. Developed by the S&T
    Directorate, the TVM provides counterterrorism analysts with a simple,
    straightforward way to not only depict the geographic distribution of
    threats across the United States, but also to search the underlying
    databases for information on the possible actors, agents, potential
    severity of attacks, and extent of the vulnerabilities to and effects
    of such attacks. A second TVIS component was delivered to IAIP in
    January 2003 and should be installed and operational by the end of
    February 2004.

                Critical Infrastructure Protection Decision Support System
        On December 24, 2003, S&T's Critical Infrastructure Protection
    Decision Support System (CIP/DSS) team was asked to conduct a rapid
    analysis of potential consequences following discovery of a cow in
    Washington State with bovine spongiform encephalopathy (BSE), commonly
    known as Mad Cow disease. An analysis was developed within hours using
    available open literature, past historical data, and the results from
    an early stage, Dynamic Simulation agriculture model.

    Cybersecurity
                Experimental Infrastructure Network for Cyber Defense
        Led by the S&T Directorate, DHS is co-funding with the National
    Science Foundation a $5.45 million, 3-year research project to create
    an experimental infrastructure network to support development and
    demonstration of next generation information security technologies for
    cyber defense. This project supports national-scale experimentation on
    emerging security research and advanced development technologies.
    Called Cyber Defense Technology Experimental Research (``DETER'')
    Network, this is a multi-university project led by the University of
    California, Berkley.

                Evaluation Methods in Internet Security Technology
        DHS is co-funding with the National Science Foundation, a second
    cyber security project called Evaluation Methods in Internet Security
    Technology (EMIST). EMIST is a testing framework that can be adapted to
    simulators, emulation facilities, other testbeds, and hardware testing
    facilities. The framework will include attack scenarios, attack
    simulators, generators for topology and background traffic, data sets
    derived from live traffic, and tools to monitor and summarize results.
    EMSIT is a 3-year, $5.6 million, multi-university research project that
    includes Penn State; University of California, Davis; Purdue; and the
    International Computer Science Institute.

    United States Coast Guard
                Maritime Surveillance Testbed Prototype
        In September 2003, S&T's Homeland Security Advanced Research
    Projects Agency and the United States Coast Guard planned and funded
    the South Florida Coastal Surveillance Prototype Testbed, a port and
    coastal surveillance prototype in Port Everglades, Miami, and Key West
    areas. The prototype is an evolutionary testbed that:
      --Provides an initial immediate coastal surveillance capability in a
            high priority area
      --Offers the Coast Guard and other DHS agencies the means to develop
            and evaluate CONOPS (Concept of Operations) in a real world
            environment
      --Implements and tests interoperability among DHS and DOD systems and
            networks such as the U.S. Navy/Coast Guard Joint Harbor
            Operations Center (JHOC).
      --Tests and evaluates systems and operational procedures
      --Becomes the design standard for follow-on systems in other areas
            and integration with wider area surveillance systems. The
            program has two phases; an initial prototype development phase,
            and an improvements and update phase. The program is expected
            to begin operations in June 2004 and is funded at $2.4 million
            for fiscal year 2003 and $5 million for fiscal year 2004.

    Partnerships
                Workshop on Scientific Computing in Support of Homeland
                        Security
        The Science and Technology Directorate brought together experts
    from academia, private industry and the national laboratories with
    staff from various organizations within the Department to understand
    how the S&T Directorate's advanced scientific computing (ASC)
    capabilities, centered at the national laboratories, can help address
    needs across the Department. This workshop, held October 8-9, 2003, has
    resulted in identifying several areas of potential high payoff for the
    use of these unique capabilities; two examples are advanced research in
    data management and information extraction, and research and
    development of computational simulation tools. The workshop will
    produce a formal report identifying relevant ASC capabilities and
    matching them up with identified needs within the Department of
    Homeland Security for improved operational capabilities.

                Infrastructure Subcommittee of the National Science and
                        Technology Council
        Staff members of the Science and Technology Directorate had a major
    role in drafting the first charter for the National Science and
    Technology Council's (NSTC's) Infrastructure Subcommittee; the
    Subcommittee's first Co-Chairs are from the S&T Directorate and the
    Office of Science and Technology Policy. The Subcommittee serves as a
    forum within the National Science and Technology Council (NSTC) for
    developing consensus and resolving issues associated with coordinating
    R&D agendas, policy, and programs to develop and protect the nation's
    infrastructure. The Subcommittee will also be the vehicle used by the
    Department of Homeland Security and the White House Office of Science
    and Technology Policy to develop the National R&D Plan for Critical
    Infrastructure Protection.

                Homeland Security Standards Panel
        The S&T Directorate worked with the American National Standards
    Institute (ANSI) and the National Institute of Standards and Technology
    (NIST) to establish a Homeland Security Standards Panel (HSSP) that
    would coordinate the development of consensus standards among the 280
    different standards development organizations. On June 9-10, 2003, the
    inaugural meeting of the ANSI Homeland Security Standards Panel was
    held at NIST. Plenary session presentations were given by four S&T
    Directorate staff members to outline the needs in Department for
    standards. The panel selected a small list of topics to address with
    focus workshops. The first of these occurred in September 2003 with a
    focus on needs for standards in biometrics.

                Joint DHS/USDA National Strategy for Foreign Animal Disease
        At the request of the Congressional Appropriations Committees for
    both DHS and the Department of Agriculture (USDA), the two departments
    have coordinated a report on a national strategy for foreign animal
    disease. Participants in the joint study included DHS (S&T), USDA (the
    Agricultural Research Service and the Agriculture and Plant Health
    Inspection Service), and stakeholder groups. The joint study has
    prompted an end-to-end review of the national response strategy
    following the identification of a case of foot-and-mouth disease,
    including the R&D requirements and gaps for assays, diagnostics,
    vaccines, and antivirals. Comprehensive roadmaps have been developed
    for these research areas, in 1-, 3-, and 5-year timeframes. These
    roadmaps are important elements of program planning for S&T.

                National Security Council Attribution Working Group
        The S&T Directorate initiated and leads the National Security
    Council Attribution Working Group, which is revisiting national
    capabilities to rapidly perform forensic analysis in cases of nuclear
    and radiological events of any size. This effort is expected to lead to
    a robust and completely coordinated forensic capability for
    attribution.

                Workshops on Comparative Analysis
        S&T's Office of Comparative Studies has sponsored two workshops on
    identifying analysis techniques and information sources crucial for
    analyzing the interaction of the terrorist threat with S&T activities.
    These workshops brought together participants from two DHS
    directorates, other government entities, academia and private industry
    and have helped to improve communication between these groups.
    Important analytical techniques and sources of information were
    identified and have been utilized. The workshops were also used to
    establish a set of topics which the office could profitably study. A
    proposal is being prepared which will solicit work on several of these
    topics.

    Homeland Security Institute, and Homeland Security Science and
            Technology Advisory Committee
                Homeland Security Institute
        A formal solicitation was issued in December for the Homeland
    Security Institute (HSI), and proposals were received in January 2004.
    Those proposals currently are being evaluated with an expected 5-year
    award by early May 2004. However, current legislation states that the
    Institute's operation will terminate in November 2005; this issue is of
    concern to the bidders.
        The HSI was mandated by the Homeland Security Act to assist the
    Secretary and the Department in addressing important homeland security
    issues that require scientific, technical, and analytical expertise.
    The Institute will provide a dedicated, high-quality technical and
    analytical support capability for informing homeland security decision
    making at all levels. This capability will consist of an extensive
    program of operational assessments, systems evaluations, technical
    assessments, and resource analyses comparable to the capability
    developed and used for decades by the Defense establishment. The
    Institute will also provide analytical and technical evaluations that
    support DHS implementation of the SAFETY Act. Finally, the Institute
    will create and maintain a field operations program that will help
    further introduce real-world needs and experiences into homeland
    security is a disciplined and rigorous way.

                Homeland Security Science and Technology Advisory Committee
        The Homeland Security Science and Technology Advisory Committee
    (HSSTAC) was formally established in December 2003 and holds its first
    meeting in February 2004. The HSSTAC was mandated by the Homeland
    Security Act to be a source of independent, scientific and technical
    planning advice for the Under Secretary for Science and Technology. The
    committee will (1) advise the Undersecretary on the mission goals for
    the future; (2) provide advice on whether the policies, actions,
    management processes, and organization constructs of the Science and
    Technology Directorate are optimally focused on mission objectives; (3)
    provide advice on whether the research, development, test, evaluation,
    and systems engineering activities are properly resourced (capital,
    financial, and human) to accomplish the objectives; (4) identify
    outreach activities (particularly in accessing and developing, where
    necessary, the industrial base of the Nation); and (5) review the
    technical quality and relevance of the Directorate's programs.
    Countermeasures to Man-Portable Air Defense Systems
        The S&T Directorate has selected three firms to provide analyses of
    the economic, manufacturing and maintenance issues needed to support a
    system to address the potential threat of MAN-Portable Air Defense
    Systems (MANPADS) to commercial aircraft. The next phase of the program
    will include development of prototypes using existing technology which
    will be subjected to a rigorous test and evaluation process. This
    initiative is not intended to develop new technology, but rather to re-
    engineer existing technology from military to commercial aviation use.

    University and Fellowship Programs
                Fellowships and Scholarships
        In September 2003, the S&T Directorate named 100 students to the
    inaugural class of the Department of Homeland Security's Scholars and
    Fellows Program. The program, which received more than 2,400
    applications, supports United States students who choose to pursue
    scientific careers and perform research in fields that are essential to
    the homeland security mission. The first class consists of 50
    undergraduate students and 50 graduate students who are attending
    universities across the country majoring in the physical, biological,
    and social and behavioral sciences including science policy,
    engineering, mathematics, or computer science. The Directorate has
    already issued a notice inviting applications from students for the
    2004-2005 academic year. The website is http://www.orau.gov/dhsed/.
                University Centers of Excellence
        The Science and Technology division has created the Homeland
    Security Centers Program that supports university-based centers of
    excellence dedicated to fostering homeland security mission critical
    research and education. The program has established the first Center of
    Excellence focused on risk analysis and modeling related to the
    economic consequences of terrorism at the University of Southern
    California, partnering with the University of Wisconsin at Madison, New
    York University and the University of California at Berkeley. A request
    for proposals has been issued for the second and third Centers of
    Excellence, which will focus on animal-related and post-harvest food
    agro-terrorism.

    Homeland Security Advanced Research Projects Agency
                Near-Term Technologies
        In May 2003, the Science and Technology Directorate's Homeland
    Security Advanced Research Projects Agency (HSARPA) released a Broad
    Agency Announcement through the Technical Support Working Group for
    near-term technologies that can be rapidly prototyped and deployed to
    the field. A total of 3,344 responses as received in the following
    broad categories: chemical, biological, radiation and nuclear
    countermeasures; personnel protection; explosives detection;
    infrastructure protection; physical security; improvised device defeat;
    and investigative support and forensics. The first contract award went
    to North Carolina State University for the development of the next-
    generation of structural fire fighting personal protective equipment.

                Detection Systems
        The S&T Directorate reviewed and selected proposals for funding in
    response to its Research Announcement for Detection Systems for
    Biological and Chemical Countermeasures, which was published through
    the Technical Support Working Group. In September 2003, the Homeland
    Security Advanced Research Projects Agency (HSARPA) held its first
    Bidders Conference in Washington, DC. Approximately 420 private sector
    and university representatives attended the event and over 500 white
    papers were submitted. Finalists have been selected for negotiation,
    and work has already begun in a number of the more important areas.

                Virtual Cyber Security Center
        On December 13, 2003, a Request for Proposals and Statement of Work
    for technical and administrative support for the virtual Cyber R&D
    Center was published to seven capable performers listed on the GSA
    schedule. The deadline for response was December 15, 2003, and two
    responsive proposals were received. A three million dollar technical,
    management, and administrative contract was awarded to SRI
    International on February 2, 2004, to support the functions of the
    HSARPA Cyber R&D Center. The Cyber R&D Center will be the primary S&T
    interface with the academic and industrial cyber security research
    communities.

                Small Business Innovation Research (SBIR) Program
                        Solicitation
        On November 13, 2003, the Homeland Security Advanced Research
    Projects Agency (HSARPA) issued a Small Business Innovation Research
    (SBIR) Program Solicitation. The purpose of this solicitation was to
    invite small businesses to submit innovative research proposals that
    address eight high-priority DHS requirements:
      --New system/technologies to detect low vapor pressure chemicals
            (e.g., Toxic Industrial Chemicals)
      --Chemical and biological sensors employing novel receptor scaffolds
      --Advanced low cost aerosol collectors for surveillance sensors and
            personnel monitoring
      --Computer modeling tool for vulnerability assessment of U.S.
            infrastructure
      --Ship compartment inspection device
      --Marine Asset Tag Tracking System
      --Automatic Identification System tracking and collision avoidance
            equipment for small boats
      --Advanced Secure Supervisory Control and Data Acquisition (SCADA)
            and related distributed control systems.
        By the December 15, 2003, deadline 374 proposals had been received.
    The evaluation is complete and 66 proposers entered negotiation for
    Phase I contracts beginning February 11, 2004.

    SAFECOM Vendor Demonstration Day
        SAFECOM held a Vendor Demonstration Day on January 30, 2004.
    SAFECOM's Vendor Day allows several communications equipment and
    service providers to present their products and/or technologies for
    SAFECOM. Responses from the SAFECOM Request for Information in November
    2003 were used to select vendors for this event. Each vendor selected
    represents a different approach to solving the communications and
    interoperability problems facing first responders.

    International Programs
                Agreement with Canada on Border and Infrastructure Security
        On October 3, 2002, Secretary Tom Ridge and Canadian Deputy Prime
    Minister John Manley initialed an agreement on Science and Technology
    Cooperation for protecting shared critical infrastructure and enhancing
    border security. The S&T Directorate is participating in a Working
    Group to develop near-term deliverables and projects to protect shared
    critical infrastructure such as bridges, dams, pipelines,
    communications and power grids; to develop surveillance and monitoring
    technologies to enhance the ability to disrupt and interdict
    terrorists; and to develop technologies for detecting the illicit
    transportation of chemical, biological, radiological, and nuclear
    weapons.

              WEAPONS OF MASS DESTRUCTION AND INCIDENT MANAGEMENT

        Between March and December of 2003, the Office of Weapons of Mass
    Destruction Operations and Incident Management (WMDO-IM) provided
    surveillance and operational incident response to the Homeland Security
    Operations Center and law enforcement officials on 24 separate
    occasions. In addition, the WMDO-IM provided operational support to the
    Homeland Security Operations Center during Hurricane Isabel and the
    Northeast blackout.
        The WMDO-IM established a scientific reach-back and rapid decision
    support capability through the Scientific and Technical Analysis and
    Response Teams (START). In addition to activating the START teams
    during the Code Orange time period in December 2003, WMDO-IM provided
    technical expert consultations on threats to the nation's water
    resources and responded to concerns about impacts of solar flares.
        WMDO-IM helped develop the Initial National Response Plan (INRP)
    and its National Incident Management System; the INRP represents a
    significant first step towards an overall goal of integrating the
    current family of Federal domestic prevention, preparedness, response,
    and recovery plans into a single all-discipline, all-hazards plan.
        WMDO-IM provided technical support to the Homeland Security
    Operations Center (HSOC), assessing vulnerabilities and actions the
    HSOC can take to improve the ability to resist a chemical or biological
    terrorist attack.
        WMDO-IM, with the Defense Threat Reduction Agency and Nuclear
    Regulatory Commission, developed curriculum for a week-long training
    workshop on weapons of mass destruction for the Central Intelligence
    Agency University. Also in the area of education and training, WMDO-IM
    established a homeland security medical executive training course.

        Senator Cochran. Thanks, Dr. McQueary.
        General Libutti, you may proceed.

                 STATEMENT OF LIEUTENANT GENERAL FRANK LIBUTTI

        General Libutti. Good morning, Chairman Cochran, and
    Senator Byrd.
        I am delighted to appear before you today to discuss the
    President's fiscal year 2005 budget request for the Department
    of Homeland Security's Information Analysis and Infrastructure
    Protection Directorate. And I look forward to a meeting with
    you soon to discuss the classified portion of the Information
    Analysis and Infrastructure Protection budget, specifically,
    the intelligence side of business.
        Information Analysis and Infrastructure Protection is the
    focal point for intelligence, analysis, and infrastructure
    protection operations and information sharing within the
    Department of Homeland Security. Within a single Directorate,
    IAIP merges capability to identify and assess a broad range of
    intelligence and information concerning threats to the
    homeland, maps the information against the Nation's
    vulnerabilities, issues timely and actionable warnings, and
    takes appropriate preventive and protective action to protect
    our infrastructure and key assets.

                    ACCOMPLISHMENTS OF THE IAIP DIRECTORATE

        As we mark the first anniversary of the Department, I would
    like to highlight for you some of the many accomplishments of
    our IAIP Directorate.
        Since March 2003, IAIP has launched the Homeland Security
    Information Network, a comprehensive interactive information
    sharing program that expands access to and use of a joint
    regional information exchange system. The roll out includes all
    of our partners at the State and local levels, as well as
    private sector partners.
        Next, we have implemented the Homeland Security
    Presidential Directive HSPD-7 which addresses critical
    infrastructure identification, prioritization and protection.
    And as you know this was signed by President Bush in December
    of 2003.
        To the National Cyber Security Division, the NCSD, we have
    established the U.S. Computer Emergency Readiness Team, or
    USCERT, and launched the National Cyber Alert System, America's
    first coordinated cyber security system for identifying,
    analyzing and prioritizing emerging vulnerabilities and
    threats. This system provides the first nation-wide
    infrastructure for relaying actionable computer security
    updates and warning information to computer users in the
    Government, the private sector, business, and home users as
    well.
        We've assumed the responsibility for the Homeland Security
    Operation Center, which maintains and shares real-time domestic
    situation awareness, coordinates security operations, detects,
    prevents and deters incidents, and facilitates response and
    recovery for all critical incidents and threats.
        In addition, we have conducted detailed vulnerability
    studies of the banking and telecommunication industries to
    better understand the inter-dependencies therein, and
    prioritization regarding vulnerability reduction.
        We formally executed the Protected Critical Information
    Infrastructure Protection Program. This is pursuant to the
    provisions of the Critical Information Infrastructure
    Information Act of 2002.
        Even with these accomplishments there is much more work to
    be done. IAIP's budget relies on the expectation of two
    emerging trends. First, the nature and complexity of the
    threats which will increase. And second, our national
    infrastructure components which will become more complex and
    more interdependent. These trends will result in more demands
    on the department and IAIP to anticipate terrorist intentions,
    tactics and capabilities, and to mitigate risks and
    vulnerabilities for the protection of the United States of
    America and its citizens.

                    FISCAL YEAR 2005 BUDGET REQUEST FOR IAIP

        For these reasons, the President's fiscal year 2005 budget
    request for IAIP is structured around the following major
    programs: Threat determination and assessments; Infrastructure
    vulnerabilities and risk assessments; Information warnings and
    advisories; Remediation and protective actions; Outreach and
    partnerships; National Communication System; Competitive
    analysis and evaluation; National plans and strategies; and the
    Homeland Security Operation Center.
        Let me discuss several of the initiatives associated with
    each of the mission areas of the fiscal year 2005 request for
    $864 million.

                      THREAT DETERMINATION AND ASSESSMENT

        First, threat determination and assessment. Funding in this
    area is targeted to increase the IAIP directorate's technology
    competencies by training analysts and equipping IAIP with the
    most advanced technologies and tools.
        The training tools and technology will be utilized to
    develop a detailed understanding of terrorists' organizational
    capabilities with supporting materials and conductivity to
    interpret and predict threats.
        Next, is to expand cooperation and fusion efforts from
    Homeland Security to our internal components and out to
    external customers, and increase cooperation efforts among the
    intelligence community.

                INFRASTRUCTURE VULNERABILITY AND RISK ASSESSMENT

        Next, the infrastructure vulnerability and risk assessment
    piece. This funds the development of comprehensive national
    infrastructure risk analysis and profile. There we are talking
    about high-value target sets, the development of analytic tools
    to evaluate critical infrastructure and key assets, and the
    coordination of a national threat vulnerability and asset
    database to assess, integrate, collaborate and store threat
    vulnerability information.
        Next, information and warning advisories. In addition to
    continuously operating a 24/7 Capable Operations Center, the
    information and warning program will provide search capability
    for our HSOC, our operation center, and for other directorates
    during heightened states of alert or in response to specific
    incidents.
        Funding in this area supports submission of collection
    requests for threat information of the intelligence community,
    the law enforcement, and dissemination guidance to Homeland
    Security components, developing analysis on the nature and
    scope of the threat, and identifying potential terrorists'
    targets within the United States.
        Another priority is the need to establish threat
    advisories, bulletins and warnings at different levels of
    classification to relevant stakeholders. The threat
    publications are detailed and disseminated in a timely fashion
    portraying the nature, scope and target of the threat.

                       REMEDIATION AND PROTECTIVE ACTIONS

        Next, remediation and protective actions. Through this
    program the IAIP directorate provides a broad range of services
    including on-site planning advice, technical and operational
    training programs, assistance in identifying vulnerabilities
    and development of sharing and best-practices. Activities in
    this area also include security efforts to protect
    infrastructure and key assets from cyber attacks.
        Specifically, the $345.783 million for remediation and
    protective actions is divided into the following five
    categories: Critical infrastructure and key asset
    identification; Critical infrastructure of vulnerability field
    assessments; Infrastructure and key asset protection; Cyber
    security; and last, protection standards and performance
    matrixes.

                            OUTREACH AND PARTNERSHIP

        The next broad category is outreach and partnership. The
    fiscal year 2005 President's budget requests $40.829 million to
    build and maintain a sound partnership foundation. To be
    successful in information sharing, strong relationships must be
    maintained with State and local governments, private sector,
    academia, advisory bodies and the international community.

                         NATIONAL COMMUNICATION SYSTEM

        Next, the national communication system. This allows NCS to
    ensure priority use of telecommunication services during times
    of national crisis, including the government emergency
    telecommunication service, GETS. The funding enhances these
    programs and supports the development of wireless priority
    services, which provide a nationwide priority cellular service
    to key national security and emergency preparedness users.

                      COMPETITIVE ANALYSIS AND EVALUATION

        Next, competitive analysis and evaluation. The competitive
    analysis and evaluation program ensures that IAIP products and
    services are tested and accurate based on sound assumptions and
    data, and ultimately offers the highest quality, depth and
    value to the IAIP customers.

                         NATIONAL PLANS AND STRATEGIES

        Next is our national plans and strategies. Critical to
    ongoing national efforts to protect and ensure the homeland,
    our actions support updating, coordinating and monitoring the
    implementation of national plans and strategies.

                       HOMELAND SECURITY OPERATION CENTER

        Homeland Security Operation Center, $35 million. The HSOC
    or Homeland Security Operation Center maintains and shares
    domestic situational awareness, coordinates security
    operations, protects, prevents and deters incidents, and
    facilitates the response and recovery of all critical
    incidents.
        The HSOC is the focal point for sharing information across
    all levels of government, the private sector and our friends at
    the State and local levels as well.

                               PREPARED STATEMENT

        In summary, the fiscal year 2005 budget request provides
    the resources to enable IAIP to manage and grow in its mission
    of securing the homeland. I look forward to working with you to
    accomplish the goals of this department and the goals of IAIP.
        Mr. Chairman, Senator Byrd, this concludes my prepared
    statement and I would be happy to answer any questions you may
    have at this time. Thank you.
        [The statement follows:]

                      Prepared Statement of Frank Libutti

    Introduction
        Good morning Chairman Cochran, Senator Byrd and distinguished
    members of the Subcommittee. I am delighted to appear before you today
    to discuss the President's fiscal year 2005 budget request for the
    Department of Homeland Security's Information Analysis and
    Infrastructure Protection (IAIP) Directorate.
        IAIP is the focal point for intelligence analysis, infrastructure
    protection operations, and information sharing within the Department of
    Homeland Security (DHS). Within a single directorate, IAIP merges the
    capability to identify and assess a broad range of intelligence and
    information concerning threats to the homeland, map that information
    against the nation's vulnerabilities, issue timely and actionable
    warnings, and take appropriate preventive and protective action to
    protect our infrastructures and key assets. IAIP is currently comprised
    of three primary components: the Office of Information Analysis (IA),
    the Office of Infrastructure Protection (IP), and the Homeland Security
    Operations Center (HSOC).

    Fiscal Year 2004 Accomplishments
        As we mark the first anniversary of the Department, I would like to
    highlight for you some of the many accomplishments of the IAIP
    Directorate, one of the newest parts of the Federal Government. The
    formation of IAIP has created for the first time a unique, integrated
    capability to not only map the current threat picture against the
    nation's vulnerabilities, but to also assess the risk of a terrorist
    attack based upon preventive and protective measures in place. That is,
    IAIP is enabling us to move from a reactive posture in the homeland to
    a risk management and mitigation posture. Let me give you some
    examples.
        Since March, 2003, IA has:
      --Launched the Homeland Security Information Network (HSIN), a
            comprehensive information sharing program that expands access
            to and use of the Joint Regional Information Exchange System
            (JRIES). The HSIN will provide secure real-time connectivity in
            a collaborative environment with States, urban areas, counties,
            tribal areas, and territories to collect and disseminate
            information between Federal, State, local, and tribal agencies
            involved in combating terrorism.
      --Coordinated Operation Liberty Shield and the rapid enhancement of
            security at more than 145 national asset sites at the outset of
            the war in Iraq. Following that, IAIP transitioned the
            protection of the sites from National Guard and law enforcement
            to a more cost effective and permanent set of physical
            protective measures.
      --Enhanced protection, by assisting local communities with conducting
            vulnerability assessments and implementing protective measures,
            of the nation's highest risk chemical sites, thereby improving
            the safety of over 13 million Americans.
      --Implemented Homeland Security Presidential Directive (HSPD) 7,
            ``Critical Infrastructure Identification, Prioritization and
            Protection,'' which was signed by President Bush in December
            2003. The HSPD assigned the Department of Homeland Security
            responsibility for coordinating the overall national effort to
            enhance the protection of the critical infrastructure and key
            resources of the United States and the development of an
            integrated cyber and physical protection plan.
      --Implemented Wireless Priority Service, to ensure the continuity of
            cellular networks nationwide, registering over 3,000 Federal,
            State, local and private users.
      --Established the National Cyber Security Division (NCSD) to
            coordinate the implementation of the National Strategy to
            Secure Cyberspace and serve as the national focal point for the
            public and private sectors on cybersecurity issues, and
            developed a process for handling cyber incidents, successfully
            managing a number of major cyber events.
      --Through the NCSD, established the U.S. Computer Emergency Readiness
            Team (US-CERT) through an initial partnership with the Computer
            Emergency Response Team Coordination Center at Carnegie Mellon
            University. US-CERT is building a cyber watch operation,
            launching a partnership program to build situational awareness
            and cooperation, and coordinating with U.S. Government agencies
            to predict, prevent, and respond to cyber attacks.
      --Launched the National Cyber Alert System under the auspices of US-
            CERT, America's first coordinated cyber security system for
            identifying, analyzing, and prioritizing emerging
            vulnerabilities and threats. This system provides the first
            nationwide infrastructure for relaying actionable computer
            security update and warning information to computer users in
            the government, in private industry, and small business and
            home users.
      --Assumed responsibility for the Homeland Security Operations Center
            (HSOC), which maintains and shares real time domestic
            situational awareness; coordinates security operations;
            detects, prevents, and deters incidents; and facilitates
            response and recovery for all critical incidents and threats.
            As of February 2004, 26 Federal and local law enforcement
            agencies and Intelligence Community members are were
            represented in the HSOC, providing reach back capability into
            their home organizations to continuously inform the current
            threat picture, and to provide key decision makers with real
            time information.
      --Conducted detailed vulnerability studies of the banking and
            telecommunications industry to better understand the
            interdependencies and prioritize vulnerability reduction.
      --Initiated an intra-Department and interagency review and analysis
            of information obtained in detainee briefings to assess
            specific terrorist capabilities, work that subsequently became
            the subject of several advisories disseminated to a variety of
            homeland security partners regarding terrorist planning,
            tactics and capabilities.
      --Co-chaired with the Border and Transportation Security Directorate
            (BTS) the DHS Intelligence Activities Joint Study charged with
            reviewing the mission, responsibilities and resources of DHS
            Intelligence component organizations. The study was chartered
            for the purpose of making recommendations to the Secretary as
            to the optimal utilization of the Department's analytical
            resources.
      --With the Homeland Security Council (HSC), initiated an ongoing
            interagency review of the Homeland Security Advisory System
            (HSAS), for the purpose of refining the system to make it more
            efficient and more beneficial for States and localities and the
            private sector.
      --Formally executed the Protected Critical Infrastructure Information
            (PCII) implementing regulation, pursuant to the provisions of
            the Critical Infrastructure Information ACT of 2002. The
            purpose of the PCII Program is to encourage private entities
            and others with knowledge about our critical infrastructure to
            voluntarily submit confidential, proprietary, and business
            sensitive critical infrastructure information to the Department
            through IAIP. Information submitted to IAIP that qualifies for
            protection under the provisions of the Act and the PCII
            implementing regulation will be exempted from public
            disclosure, providing a significant opportunity for private
            entities to assist in homeland security without exposing
            potentially sensitive and proprietary information to the
            public. The Department will use information that qualifies for
            protection primarily to assess our vulnerabilities, secure the
            nation's critical infrastructure and protected systems, issue
            warnings and advisories, and assist in recovery.

    Fiscal Year 2005
        Even with these accomplishments, there is much more work that must
    be done. The United States remains at risk, despite the continuing work
    to assess and mitigate vulnerabilities. Our interdependent critical
    infrastructures enable Americans to enjoy one of the highest standards
    of living in the world, provide the backbone for the production of
    goods and services for the world's largest economy, provide over 60
    million jobs, and ensure the United States can protect its national
    security interests. Infrastructure will remain one of the top priority
    targets for terrorists desiring to damage the nation's economy and
    incite fear in the minds of the American people.
        While the possibility of large-scale attacks similar to 9/11 remain
    significant, it is also possible likely that terrorists will employ
    smaller scale operations such as the suicide bombings prevalent in
    Israel. Terrorists understand that the cumulative effect of many small-
    scale operations--that are easier to plan and conduct--can be just as
    effective as large-scale attacks in their overall impact on Americans'
    sense of security in their own country and, especially, at United
    States facilities overseas.
        IAIP's budget relies on the expectation of two emerging trends:
    First, the nature and complexity of threats will increase; and, second,
    our national infrastructure components will become more complex and
    interdependent. These trends will result in more demands on the
    Department and IAIP to anticipate terrorist intentions, tactics and
    capabilities, and to mitigate risks and vulnerabilities for the
    protection of the United States and its citizens.
        For these reasons, the President's fiscal year 2005 budget request
    for IAIP is structured around the following major program areas: Threat
    Determination and Assessments, Infrastructure Vulnerabilities and Risk
    Assessments, Information Warnings and Advisories, Remediation and
    Protective Actions, Outreach and Partnerships, National Communications
    System, Competitive Analysis and Evaluations, National Plans and
    Strategies, and the Homeland Security Operations Center.

    Threat Determination and Assessment ($21.943 Million)
        IAIP's Threat Determination and Assessment program is designed to
    detect and identify threats of terrorism against the United States
    homeland; assess the nature and scope of these terrorist threats; and
    understand terrorist threats in light of actual and potential
    vulnerabilities within critical infrastructures and/or key assets.
    Addressing these issues requires the IAIP Directorate to improve on its
    existing set of threat analysts and analytical tools by hiring and
    training additional highly skilled threat analysts; acquiring and
    fielding new analytical tools and technologies to assist in assessing
    and integrating information; and deploying secure communications
    channels that allow for the rapid exchange of information and
    dissemination of analytical results.
        These improvements will be used for multiple purposes, including:
    (1) providing analysis and assessments of the current threat picture as
    it relates to critical infrastructure; (2) developing actionable
    intelligence for Federal, State, and local law enforcement; (3) issuing
    warnings at all levels from the Federal Government to the private
    sector; and (4) supporting efforts to identify and coordinate effective
    countermeasures.
        The President's Budget requests $21.943 million for continued
    support of on-going activities to continually form terrorist threat
    situational awareness, execute the functions outlined above, and focus
    on information sharing and coordination within DHS as well as in the
    Intelligence Community and other external stakeholder communities.
    These capabilities enhance the performance of two critical functions in
    protecting the homeland. First, it offers the United States Government
    the ability to integrate, synchronize, and correlate unique sources of
    information relating to homeland security, emanating from traditional
    and non-traditional (e.g., State and local governments, private
    industry) sources. Second, the IAIP Directorate is positioned to
    integrate knowledge of potential terrorist threats with an
    understanding of exploitable infrastructure vulnerabilities, resulting
    in a value-added profile of national risk that transcends traditional
    threat and vulnerability assessments.
        Funding in this area is targeted to increase the IAIP Directorate's
    technical competencies by training analysts and equipping IAIP with the
    most advanced technologies and tools. The training, tools and
    technologies will be utilized in four primary areas:
      --Model Terrorist Organization.--Developing a detailed understanding
            of terrorist organization capability with supporting materials
            and connectivity to interpret and predict threats.
      --Develop Terrorist Capabilities Baseline.--Developing a detailed
            understanding of terrorist capabilities baseline with
            supporting materials and connectivity to interpret and predict
            threats.
      --Collaboration and Fusion.--Expanding collaboration and fusion
            efforts from DHS to internal components, and out to an extended
            customer base.
      --Analysis Coordination.--Spearheading the effort to build a
            collaborative and mutually supporting analysis coordination
            schematic for DHS, and ensure that it incorporates others
            (TTIC, TSC, and the Intelligence Community) into a ``community
            of interest'' approach for understanding domestic terrorist
            threats.

    Infrastructure Vulnerability and Risk Assessment ($71.080 million)
        The Homeland Security Act directs the IAIP Directorate to carry out
    comprehensive assessments of the vulnerabilities of the critical
    infrastructure and key assets of the United States. As such, the IAIP
    Directorate serves as the focal point for coordination between the
    Federal Government, critical infrastructure owners and operators, and
    State and local governments for the sharing of information and the
    planning for response to crisis events affecting infrastructures.
        The fiscal year 2005 President's Budget requests $71.080 million to
    fund the development of a comprehensive National infrastructure risk
    analysis and profile (e.g., high value/high probability of success
    targets); development of analytic tools to evaluate critical
    infrastructure and key assets; and the coordination and development of
    a National threat vulnerability and asset database to access,
    integrate, correlate, and store threat and vulnerability information.
        These mission areas will be enable IAIP to identify potential risks
    caused by infrastructure interdependencies, and determine the potential
    consequences of an infrastructure failure due to a terrorist attack.
    Ultimately, the intent of these efforts is to strengthen the
    capabilities of the IAIP Directorate and each critical infrastructure
    to provide near real-time notification of incidents; enhance the
    ability of the IAIP Directorate to assess the impact of incidents on
    critical infrastructure and key assets; to assess collateral damage to
    interdependent infrastructure; and create tools and processes to
    enhance infrastructure modeling and risk assessment capabilities.
        The fiscal year 2005 budget request for infrastructure
    vulnerability and risk assessment is divided into three areas:
      --National Infrastructure Risk Analysis.--Funding in this area
            supports the development of comprehensive risk and
            vulnerability analyses on a national scale. These analyses are
            cross-sector in nature, focusing on problems affecting multiple
            infrastructures, both physical and cyber-related. As assigned
            in the Homeland Security Act and HSPD-7, the IAIP Directorate
            will continue to leverage and develop new techniques to map
            data provided by threat analyses, provide consequence analysis,
            and create vulnerability assessment teams based on the nature
            of the indicators or incidents. The goal is to produce timely,
            actionable information that is more meaningful to industry. A
            portion of this funding also supports the direct involvement of
            critical infrastructure sector experts to supplement risk
            analysis efforts and to gain a better understanding of the
            sector's core business and operational processes. In addition,
            a portion of this funding is utilized for exploration and to
            pilot innovative methodologies to examine infrastructure
            vulnerabilities and interdependencies.
      --Analytic Tools Development and Acquisition.--The IAIP Directorate
            will continue to collaborate with the Science and Technology
            (S&T) Directorate to acquire the most advanced tools and
            database designs available to better understand the
            complexities of interdependent systems and for translating vast
            amounts of diverse data into common and usable information for
            decision-makers, analysts, and infrastructure operators. Such
            capabilities include data-logging systems, modeling and
            simulation, data mining, and information correlation. Funding
            is targeted toward developing dynamic and multi-faceted tools
            designed to expand access to needed information.
      --National Threat/Vulnerability/Asset Databases.--The funding level
            requested for this activity in the fiscal year 2005 budget is
            based on the recognition of the data intensive nature, scale
            and complexity of analyzing infrastructure vulnerability
            issues. The intent is to develop and maintain databases that
            allow the IAIP Directorate to provide its stakeholders with up-
            to-date information on threats and vulnerabilities.
            Specifically, the IAIP Directorate is continuing to coordinate
            and direct the development of the primary database of the
            Nation's critical infrastructures through a collaborative
            process involving all stakeholders; maintain data on the risks
            posed to specific facilities and assets (and the probability of
            attack and associated consequences for homeland, national, and
            economic security should an attack occur); and develop,
            operate, and manage integrated data warehouses--in full
            compliance with the Department's privacy policies--that contain
            comprehensive all-source threat, vulnerability, and asset data.

    Information and Warning Advisories ($59.807 Million)
        One of the most visible aspects of the DHS mission lies in the
    management and administration of the Homeland Security Advisory System,
    the communications of threat condition status to the general public,
    and the continuous around-the-clock monitoring of potential terrorists
    threats. Specifically, there are three key information and warning
    activities that help support the Homeland Security Advisory System and
    other efforts to alert key Departmental leadership, national leaders
    and the general public: (1) tactical indications and warning and the
    associated warning advisory preparation and issuance; (2) information
    requirements management; and (3) integrated physical and cyber
    infrastructure monitoring and coordination.
        The fiscal year 2005 President's Budget requests $59.807 million to
    maintain the information and warning program. In addition to
    continuously operating a 247 capability, the information and
    warning program area will provide surge capabilities for the HSOC and
    with other Directorates during heightened states of alert or in
    response to specific incidents. The relevant fiscal year 2005 budget
    request is divided into three primary areas:
      --Tactical Indications and Warning Analysis/Warning Advisory
            Preparation and Issuance.--Funding in this area supports
            submission of collection requests for threat information to the
            Intelligence Community and law enforcement, disseminating
            guidance to DHS components, developing analyses on the nature
            and scope of the threats, and identifying potential terrorist
            targets within the United States. A program priority is the
            continued to development of tools and technologies to assist
            our analysts to interpret, integrate, and catalogue indicators,
            warnings, and/or actual events and to provide Departmental and
            national leaders situational awareness. Another priority is the
            need to publish threat advisories, bulletins, and warnings at
            different levels of classification prior to distribution to the
            relevant stakeholders. Threat publications are detailed and
            disseminated in a timely fashion, portraying the nature, scope,
            and target of the threat. Ultimately, this information provides
            the basis for determinations to change the threat condition.
      --Information Requirements Management.--Information related to
            threats and critical infrastructure vulnerabilities are
            collected, stored, and protected within a diverse set of
            locations and sources, spanning all levels of government
            (Federal, State, and local) and including intelligence,
            proprietary and public sources. Funding in this area supports
            the technologies necessary to search within those diverse
            databases to identify, distill, and/or acquire mission-critical
            information. Program funding supports efforts to coordinate
            information requests and tasks emanating from within other
            parts of IAIP, other DHS Directorates, the Intelligence
            Community, law enforcement, State and local governments, and
            the private sector. In addition, a portion of these funds is
            used to supplement the information technology structure to
            accomplish these tasks efficiently and effectively through the
            use of leading-edge capabilities. This effort ensures that all
            information users are able to access all available and relevant
            data.
      --Integrated Physical and Cyber Infrastructure Monitoring and
            Coordination.--Intelligence and warning staff monitoring and
            coordination efforts ensure that threat and critical
            infrastructure issues are adequately addressed and represented.
            In addition, these efforts coordinate incident response,
            mitigation, restoration, and prioritization across critical
            sectors in conjunction with the other relevant DHS components
            (e.g., Emergency Preparedness and Response Directorate).

    Remediation and Protective Actions ($345.738 Million)
        The IAIP Directorate has established a national Critical
    Infrastructure Protection program that leverages stakeholder input at
    the Federal, State, and local level and across the private sector to
    provide the best and most cost-effective protective strategies for ``at
    risk'' infrastructure and facilities. Through this program, the IAIP
    Directorate provides a broad range of services including on-site
    planning advice, technical and operational training programs,
    assistance in identifying vulnerabilities, and development and sharing
    of best practices. Activities in this area also include security
    efforts to protect infrastructure and assets from cyber attacks (e.g.,
    malicious software, distributed denial-of-service attacks).
        Specifically, the fiscal year 2005 President's Budget requests
    $345.738 million, for remediation and protective actions divided into
    the following five areas:
      --Critical Infrastructure and Key Asset Identification.--The Homeland
            Security Act directs the IAIP Directorate to recommend measures
            necessary to protect the critical infrastructure of the United
            States. One key step in this process is funding a national
            program focused on identifying critical infrastructure and
            assets and assessing potential risks of successful attacks to
            those assets. By understanding the full array of critical
            infrastructure facilities and assets, their interaction, and
            the interdependencies across infrastructure sectors, IAIP is
            able to forecast the national security, economic, and public
            safety implications of terrorist attacks and prioritize
            protection measures accordingly. Moreover, the process of
            identifying and prioritizing assets in this manner creates a
            common overarching set of metrics that consist of the
            individual attributes of specific infrastructure sectors.
      --Critical Infrastructure Vulnerability Field Assessments.--The
            Directorate coordinates with all relevant Federal, State and
            local efforts to identify system vulnerabilities and works
            closely with the private sector to ensure vulnerability field
            assessment methodologies are effective, easy to use, and
            consistently applied across sectors. Funding is targeted at the
            need to conduct and coordinate specialized vulnerability
            assessments by DHS teams, in conjunction with teams from other
            Federal or State agencies and private sector companies as
            appropriate, for the highest priority critical infrastructures
            and assets. The intent of these efforts is to catalogue
            specific vulnerabilities affecting the highest priority
            terrorist targets, thereby helping guide the development of
            protective measures to harden a specific facility or asset. A
            nationwide vulnerability field assessment program is currently
            underway leveraging the expertise of the IAIP Directorate,
            other agencies, and the private sector to ensure cross-sector
            vulnerabilities are identified and that sound, informed
            decisions will be reached regarding protective measures and
            strategies.
      --Infrastructure and Key Asset Protection Implementation.--Due to the
            vast geographic size of the United States and diverse operating
            environment for each infrastructure sector, protection
            strategies must start at the local level and then be applied
            nationally as needed. Priorities for protection strategies are
            based on regional, State, and local needs and on the need for
            cross-sector coordination and protective actions within those
            geographic boundaries. The budget request reflects the need for
            the IAIP Directorate to continue the development of a flexible
            set of programs to assist in the implementation of protective
            measures. Examples include coordinating with other Federal and
            State agencies and the private sector to: (1) ensure the
            detection of weapons of mass destruction material is considered
            in the development of protection plans; (2) disrupt attack
            planning by taking low cost actions that make information
            collection and surveillance difficult for terrorists; (3)
            defend the most at risk critical infrastructure facilities and
            key assets throughout the country above the level of security
            associated with industry best practices; and (4) develop a
            nationally-integrated bombing response capability similar to
            that of the United Kingdom. DHS funding in these areas focuses
            on high value, high probability targets and will take the form
            of ``joint ventures'' with State and local governments,
            regional alliances, and the private sector.
      --Cyberspace Security.--Consistent with the Homeland Security Act and
            the National Strategy to Secure Cyberspace, a key element of
            infrastructure protection, both in the public and private
            sectors, is to ensure the continued healthy functioning of
            cyberspace, which includes the cyber infrastructure and the
            cyber dependencies in the critical infrastructure sectors. The
            IAIP Directorate recognizes that cyberspace provides a
            connecting linkage within and among many infrastructure sectors
            and the consequences of a cyber attack could cascade within and
            across multiple infrastructures. The result could be widespread
            disruption of essential services, damaging our national
            economy, and imperiling public safety and national security.
            The budget request supports efforts to capitalize on existing
            capabilities of the Directorate, and investing in new
            capabilities to monitor, predict, and prevent cyber attacks and
            to minimize the damage from and efficiently recover from
            attacks. As the manager responsible for a national cyber
            security program, the IAIP Directorate provides direct funding
            to support: (1) creating a national cyberspace security threat
            and vulnerability reduction program that includes a methodology
            for conducting national cyber threat and vulnerability risk
            assessments; (2) strengthening a national cyberspace security
            readiness system to include a public-private architecture for
            rapidly responding to and quickly disseminating information
            about national-level cyber incidents-including the Cyber Alert
            Warning System; (3) expanding and completing the warning and
            information network to support crisis management during cyber
            and physical events; (4) implementing a national cyberspace
            security awareness and training program; (5) developing
            capabilities to secure the United States Government in
            cyberspace that include guidelines for improving security
            requirements in government procurements; (6) strengthening the
            framework for national security international cyberspace
            security cooperation that focuses on strengthening
            international cyber security coordination and; (7) the Global
            Early Warning Information System, which monitors the worldwide
            health of the Internet through use of multiple data sources,
            tools, and knowledge management to provide early warning of
            cyber attacks.
      --Protection Standards and Performance Metrics.--Working in
            collaboration with the National Institute of Standards and
            Technology as appropriate, the IAIP Directorate is developing
            objective data for systems protection standards and performance
            measures. Several sectors currently use threat-based exercise
            approaches to validate key elements of their protection
            efforts. The budget request in this area will focus on
            continually improving and validating sector plans and
            protective programs and providing training and education
            programs for public and private sector owners and operators of
            critical infrastructure and/or key assets.

    Outreach and Partnership ($40.829 Million)
        The private sector and State and local government own and operate
    more than 85 percent of the Nation's critical infrastructures and key
    assets. Consequently, public-private cooperation is paramount, and
    without such partnerships, many of our Nation's infrastructures and
    assets could be more susceptible to terrorist attack. The IAIP
    Directorate is responsible for cultivating an environment conducive for
    public and private partnerships, developing strategic relationships
    underlying those partnerships, and coordinating and supporting the
    development of partnerships between the Directorate and State and local
    government, private industry, and international communities for
    national planning, outreach and awareness, information sharing, and
    protective actions.
        The fiscal year 2005 President's Budget requests $40.829 million to
    build and maintain a sound partnership foundation. It is imperative
    that the Department is familiar with the issues confronting the private
    sector, State and local governments, Federal sector specific agencies
    for critical infrastructure, and our international partners.
    Specifically, strong relationships must be maintained with the
    following communities of interest:
      --State and Local Governments.--Establishing and maintaining
            effective working relationships with State and local officials
            is a fundamental part of the DHS mission to effectively share
            information at unprecedented levels. IAIP is working with DHS'
            Office of State and Local Government Coordination to assess the
            information sharing and dissemination capabilities that exist
            nationwide in order to leverage existing capabilities and
            supplement capacity where needed.
      --Private Sector.--The Private Sector is another key partner in
            developing a nationwide planning, risk assessment, protective
            action, and information sharing strategy. Engaging the business
            community and making a business case for investment in
            protective and remedial strategies is key to our success.
      --Academia.--DHS will continue to develop, coordinate, and support
            partnerships with academic and other educational institutions.
            These partnerships will encourage and coordinate academic and
            other workforce development to assure availability of quality
            IT security professionals, and encourage curriculum development
            to integrate critical infrastructure protection (security) as
            normal elements of professional education.
      --Advisory Bodies.--DHS will also provide support to Presidential
            advisory bodies and cross-sector partnerships (including the
            National Infrastructure Advisory Council and the Partnership
            for Critical Infrastructure Security.)
      --International.--This funding will also support and enhance
            partnerships with the international community, working with and
            through DHS Office of International Affairs and the State
            Department, collaborating with the United States State
            Department on infrastructure protection activities. This
            includes bilateral discussions and activities on risk
            assessment and protective actions, information sharing,
            exercises and training. Of particular focus is the IAIP
            component of the Smart Borders implementation with Canada and
            Mexico. We will continue our role as the lead Federal Agency
            Role for the Information and Telecommunications Sectors. The
            Directorate will continue to partner with representatives from
            those industries composing the Information and
            Telecommunications sector and to educate members of the sector,
            develop effective practices, develop and implement intra-sector
            and cross-sector risk assessments, and work with other sectors
            on identifying and addressing risks associated with
            interdependencies.
      --Cyber.--We will expand the platform established by the Cyber Alert
            Warning System to include awareness and education programs for
            home users of computers and computer professionals in
            partnership with other Federal agencies and industry.
            Additionally, within private industry, our partnership and
            outreach efforts will involve the engagement of risk management
            and business educational groups to implement strategies to
            elevate senior management understanding of the importance of
            investment in cyber security.

    National Communications System ($140.754 Million)
        The national telecommunications infrastructure supports multiple
    mission-critical national security and emergency preparedness (NS/EP)
    communications for the Federal Government, State and local governments,
    and the private industry. The security and availability of the
    telecommunications infrastructure is essential to ensuring a strong
    national, homeland, and economic security posture for the United
    States. The National Communications System (NCS) is assigned NS/EP
    telecommunications responsibilities through Executive Order 12472,
    Assignment of National Security and Emergency Telecommunications
    Functions, which include: administering the National Coordinating
    Center for Telecommunications to facilitate the initiation,
    coordination, restoration, and reconstitution of NS/EP
    telecommunications services or facilities under all crises and
    emergencies; developing and ensuring the implementation of plans and
    programs that support the viability of telecommunications
    infrastructure hardness, redundancy, mobility, connectivity, and
    security; and serving as the focal point for joint industry-government
    and interagency NS/EP telecommunications planning and partnerships.
        The fiscal year 2005 President's Budget requests $140.754 million
    for the capabilities and analytic tools necessary to support the
    expansion of NS/EP telecommunications programs and activities. The
    fiscal year 2005 funding level ensures a continuation of the NCS
    mission and legacy NS/EP telecommunications programs and assets.
    Specifically, the fiscal year 2005 budget request for the NCS is
    divided into four areas:
      --Industry-Government and Interagency Processes.--The NCS has
            cultivated and expanded its relationships with the
            telecommunications industry and other Federal agencies to
            promote joint planning, operational activities, coordination,
            and information sharing. The primary industry partnership is
            the President's National Security Telecommunications Advisory
            Committee (NSTAC), which is comprised of 30 industry leaders
            representing various elements of the telecommunications
            industry. The NSTAC and its subordinate body, the Industry
            Executive Subcommittee (IES), provides industry-based analyses
            and perspectives on a wide range of NS/EP telecommunications
            issues and provides policy recommendations to the President for
            mitigating vulnerabilities in the national telecommunications
            infrastructure. Paralleling this industry relationship is the
            interagency process involving the NCS Committee of Principals
            and its subordinate body, the Council on Representatives, which
            facilitate the NS/EP telecommunications activities of the 23
            Federal agencies constituting the NCS.
      --Critical Infrastructure Protection Programs.--Leveraging the
            industry relationships described above, the NCS manages several
            network security and CIP-related programs, including: (1) the
            National Communications Center (NCC), a joint industry- and
            Government-staffed organization collocated within the NCS and
            serves as the operational focal point for the coordination,
            restoration, and reconstitution of NS/EP telecommunications
            services and facilities; (2) the Telecommunications Information
            Sharing and Analysis Center, which is the focal point for the
            generation, compilation, and sharing of cyber warning
            information among the telecommunications industry; (3) the
            Government and National Security Telecommunications Advisory
            Committee Network Security Information Exchanges (NSIEs), which
            meet regularly and share information on the threats to,
            vulnerabilities of, and incidents affecting the systems
            comprising the public network; (4) the Critical Infrastructure
            Warning Information Network (CWIN), which is designed to
            facilitate the dissemination of information and warnings in the
            event of a cyber attack; (5) Training and Exercises, which
            helps ensure the readiness and availability of qualified staff
            to perform the operational duties of the NCS associated with
            Emergency Support Function #2--Telecommunications of the
            Federal Response Plan; (6) Operational Analysis, which develops
            and implements tools and capabilities to conduct analyses and
            assessments of the national telecommunications infrastructure
            and its impact on NS/EP services; (7) NCS also supports the
            Global Early Warning Information System, which monitors the
            worldwide Internet health through use of multiple data sources,
            tools, and knowledge management to provide early warning of
            cyber attacks, (8) Shared Resources (SHARES) High Frequency
            (HF) Radio Program, developed by the NCS and in continuous
            operation since being approved by the Executive Office of the
            President in the NCS Directive 3-3 of January 1989. The SHARES
            program makes use of the combined resources and capabilities of
            existing Federal and federally affiliated HF radio stations on
            a shared, interoperable basis to provide critical backup
            communications during emergencies to support national security
            and emergency preparedness (NS/EP) requirements.
      --Priority Telecommunications Programs.--The NCS is continuing a
            diverse set of mature and evolving programs designed to ensure
            priority use of telecommunications services by NS/EP users
            during times of national crisis. The more mature services--
            including the Government Emergency Telecommunications Service
            (GETS) and the Telecommunications Service Priority (TSP)--were
            instrumental in the response to the September 11th attacks.
            Fiscal year 2005 funding enhances these programs and supports
            the development of the Wireless Priority Service (WPS) program
            and upgrade to the Special Routing Arrangement Service (SRAS).
            Specifically, priority service programs include: (1) GETS,
            which offers nationwide priority voice and low-speed data
            service during an emergency or crisis situation; (2) WPS, which
            provides a nationwide priority cellular service to key NS/EP
            users, including individuals from Federal, State and local
            governments and the private sector; (3) TSP, which provides the
            administrative and operational framework for priority
            provisioning and restoration of critical NS/EP
            telecommunications services; (4) SRAS, which is a variant of
            GETS to support the Continuity of Government (COG) program
            including the reengineering of SRAS in the AT&T network and
            development of SRAS capabilities in the MCI and Sprint
            networks, and; (5) the Alerting and Coordination Network (ACN)
            which is an NCS program that provides dedicated communications
            between selected critical government and telecommunications
            industry operations centers.
      --Programs to Study and Enhance Telecommunications Infrastructure
            Resiliency.--The NCS administers and funds a number of programs
            focusing on telecommunications network resiliency, security,
            performance, and vulnerabilities, including: (1) the Network
            Design and Analysis Center, which is a set of tools, data sets,
            and methodologies comprising the Nation's leading commercial
            communications network modeling and analysis capability that
            allows the NCS to analyze the national telecommunications and
            Internet infrastructures; (2) the NS/EP Standards program,
            which works closely with the telecommunications industry to
            incorporate NS/EP requirements in commercial standards and
            participates in national and international telecommunications
            standards bodies; (3) the Converged Networks Program, which
            investigates vulnerabilities and mitigation approaches in
            future technologies and networks (specifically Internet
            Protocol-based networks); (4) the Technology and Assessment
            Laboratory, which provides the ability to evaluate penetration
            testing software, modeling tools, various operating systems and
            protocols, hardware configurations, and network
            vulnerabilities, and; (5) the Routing Diversity effort, which
            is developing a communications routing diversity methodology to
            analyze a facility's level of routing diversity and is
            evaluating alternative technologies which can provide route
            diversity, and (6) the NCS, through various associations and
            other activities is involved in a variety of International
            Activities (NATO, CCPC, CEPTAC, and Hotline) which provides
            technical subject matter expertise, guidance, and coordination
            on CIP issues affecting the telecommunications infrastructure
            in numerous international forums on behalf of the United States
            Government.

    Competitive Analysis and Evaluation ($18.868 Million)
        The Competitive Analysis and Evaluation program ensures that IAIP
    products and services are tested, accurate, based on sound assumptions
    and data, and ultimately, offer the highest quality, depth, and value
    to IAIP customers. The fiscal year 2005 President's Budget requests
    $18.868 million to provide for the unbiased, objective analyses and
    evaluation of IAIP findings, assessments, and judgments through three
    functional areas: Risk Assessment Validation, Evaluation, and Exercises
    and Methodologies.
      --Risk Assessment Validation.--Funding is used to establish and field
            physical and cyber target risk analysis teams that employ ``red
            team'' techniques to evaluate measures taken by other IAIP
            components to protect key assets and critical infrastructure.
            The red teams emulate terrorist doctrine, mindsets, and
            priorities and employ non-conventional strategies to test and
            evaluate IAIP planning assumptions.
      --Evaluation.--Funding supports several initiatives, including the
            IAIP Product and Process Evaluation, which involves conducting
            independent, objective evaluations of IAIP products and
            processes and to assist IAIP divisions to develop products that
            offer value to IAIP customers. The second is IAIP Customer
            Satisfaction, which evaluates customer satisfaction with IAIP
            products and services to ensure they are responsive to current
            customer needs. Funding in this area provides for electronic
            and non-electronic feedback surveys, field visits, and
            conferences.
      --Exercises and Methodologies.--Coordinate and manage interagency
            exercises and tabletops that test both DHS and IAIP policies,
            processes, procedures, capabilities, and areas of
            responsibilities. Participating in and conducting after action
            reviews of exercises provides invaluable experience and
            feedback related to capabilities, connectivity, and information
            sharing during a crisis event. Investment in this area informs
            the Department's decision as to where improvements are needed.
            This funding also supports examining and instituting advanced
            methodologies such as alternate hypotheses, gaming, modeling,
            simulation, scenarios, and competitive analyses to ensure IAIP
            products are accurate, sophisticated, and of the highest
            quality and value to customers.

    National Plans and Strategies ($3.493 Million)
        Critical to ongoing national efforts to protect and secure the
    homeland are updating, revisiting, coordinating the development, and
    monitoring the implementation of National Plans and Strategies. The
    fiscal year 2005 President's Budget requests $3.493 million to support
    activities by coordinating, developing, and publishing contingency
    planning documents for critical infrastructures (as called for in the
    National Strategy to Secure Cyberspace), monitoring progress against
    those documents, and producing an annual report.

    Homeland Security Operations Center ($35.0 Million)
        The HSOC maintains and shares domestic situational awareness;
    coordinates security operations; detects, prevents, and deters
    incidents; and facilitates the response and recovery for all critical
    incidents. The HSOC is the focal point for sharing information across
    all levels of government and the private sector.
        The HSOC facilitates the flow of all-source information and
    develops products and services including: (1) the daily Homeland
    Security Situation Brief for the President, (2) reports and briefs to
    law enforcement, the Intelligence Community, other Federal and State
    agencies and industry partners, (3) warnings and alerts to individual
    responder agencies and the public as appropriate, and (4) coordinated
    response when crises do occur. The HSOC concept is to draw from the
    many distributed systems and centers that are currently dedicated to
    different missions and optimize their contribution to homeland
    security.
        HSOC funding will help with the time efficiency of issuance of
    information and warning advisories through increased operations
    efficiency brought about by facility improvements.

    New Programs
        In the fiscal year 2005 IAIP budget, as a part of an interagency
    effort to improve the Federal Government's capability to rapidly
    identify and characterize a potential bioterrorist attack, the
    President requst $11 million for a new biosurveillance iniative. This
    increase provides for real-time integration of biosurveillance data
    harvested through the Centers for Disease Control (CDC), Food and Drug
    Administration (FDA), United States Department of Agriculture (USDA)
    and DHS Science and Technology (S&T) Directorate with terrorist threat
    information analyzed at IAIP. Currently, a finding from one source of
    surveillance exists in isolation from relevant surveillance from other
    sectors, making it difficult to verify the significance of that finding
    or to recommend appropriate steps for response. Integrating the
    information in IAIP, and analyzing it against the current threat
    picture will inform effective homeland security decision-making and
    speed response time to events.
        This interagency initiative, includes DHS's ongoing BIOWATCH
    environmental biodetection program, Health and Human Services' (HHS)
    proposed BIOSENSE program, HHS' and United States Department of
    Agriculture's (USDA) ongoing joint separate food security surveillance
    efforts, and USDA's agricultural surveillance efforts. This DHS-led
    effort will promote data sharing and joint analysis among these sectors
    at the local, State, and Federal levels and also will establish a
    comprehensive Federal-level multi-agency integration capability to
    rapidly compile these streams of data and preliminary analyses and
    integrate and analyze them with threat information

    Conclusion
         In summary, the fiscal year 2005 budget request provides the
    resources to enable the IAIP Directorate to manage and grow in its
    mission of securing the homeland. I look forward to working with you to
    accomplish the goals of this department and the IAIP directorate.
        Mr. Chairman and Members of the Subcommittee, this concludes my
    prepared statement. I would be happy to answer any questions you may
    have at this time.

                        NATIONAL BIOLOGICAL SURVEILLANCE

        Senator Cochran. Thank you, General Libutti.
        Now, looking at the budget request, I noticed that in the
    case of the National biological-surveillance program, the
    budget proposes to establish a group lead by the Department of
    Homeland Security and including the Department of Health and
    Human Services, and the Department of Agriculture, to create a
    National biological surveillance system. Funding for this
    initiative is $279 million Government-wide. The Department of
    Homeland Security's request for this initiative is $129 million
    for the roles carried out by these directorates that you
    manage.
        Secretary Libutti, how will the Information Analysis and
    Infrastructure Protection Directorate work to coordinate its
    efforts with the Department of Health and Human Services and
    the Department of Agriculture to integrate biological
    surveillance data, and verify a chemical or biological attack?
        General Libutti. Thank you, sir.
        Let me start by simply highlighting the IAIP funds and
    support of this inter-agency effort. And I will tell you that
    my partner sitting here with me, to my right, Dr. McQueary, is
    certainly a partner for me in this effort.
        For us, it's about $11 million. And you touched on a
    critical point. Our job in support of this major inter-agency
    effort is to work as a repository to gather the data heretofore
    across the Federal Government, which is not indeed gathered,
    and looked at it with a view towards providing situational
    awareness, and as an extension, actions that need to be taken
    by the Federal Government, and by extension to partners at the
    State and local level.
        So the bottom line for me in terms of how we do this, is I
    do it in complete support and cooperation with Dr. McQueary,
    and in concert with other members of the inter-agency effort.
    The bottom line is it's about gathering the information or data
    in a collaborative way, and in a way that represents what is
    going on across the Federal Government.
        Senator Cochran. What would happen to this initiative if
    funding is not provided to the Department of Agriculture or
    Department of Health and Human Services? Would there be a
    serious breakdown in the capabilities of our government to deal
    with these threats?
        General Libutti. My sense, sir, is that if there were
    indeed a breakdown, it wouldn't be in the execution piece of
    their mission or their responsibility. It would be more broadly
    speaking, in what we have all learned is very critical in this
    fight against terrorism, and that is to truly work in concert
    to look at the information or databases that are available and
    simply haven't been collected in a cohesive way. To look at
    them and to ask, what does that mean in terms of assessing the
    threat, assessing our own capability, and then taking
    appropriate action.
        Certainly, the mission would still be accomplished, I
    simply think it would not be a wise move in terms of the
    greater value added when you look at all of this data, and then
    there is one person responsible for bringing it together.

                            ENVIRONMENTAL MONITORING

        Senator Cochran. Secretary McQueary, your directorate's
    role in biological surveillance includes an increase of $65
    million to expand environmental monitoring activities in the
    cities determined to be at the highest risk of terrorist
    attack. Can you give us any further details about the chemical
    and biological warning activities that are in place now, and
    what this increased funding will be used for if it is made
    available to you by the Congress?
        Dr. McQueary. The increased funding will permit us to
    increase the number of sensors in high-risk urban areas, to be
    able to make the biological detections using a system called
    BioWatch. That system has been in place since about a year ago
    in January, when we first began deploying those systems.
        And of course, you know we work very closely with EPA, as
    well as Health and Human Services, in being able to do that
    work.
        Senator Cochran. What do you think you will be able to
    accomplish if you get this increased funding, in terms of new
    advances or the development of new technologies or systems?
        Dr. McQueary. The $65 million is to allow more deployments
    of the capabilities than we currently have, thereby increasing
    the number of monitoring stations in the various urban areas
    where we have these systems already deployed, as well as
    increasing the number of locations, city locations, if you
    will, where we have them deployed.
        So it fundamentally gives us a better, real--not real time-
    but a better monitoring capability so that we can make a
    determination should there be a biological attack of some sort.
        We have approximately, I would say, an average of ten
    sensors per geographical location. Now that is an estimate but
    I can give you precise numbers if you need them. With the
    increase we will effectively be able to double the number of
    sensors where we are and provide better coverage, if you will.

                                COUNTERMEASURES

        Senator Cochran. There is also the BioShield initiative,
    which is involved in deploying countermeasures against
    biological terror attacks. How is the Science and Technology
    Directorate participating in the development of
    countermeasures?
        Dr. McQueary. Well, of course, the development of
    countermeasures is in our charter, and we work in the chemical,
    biological, radiological, nuclear, and high-explosives areas.
    So in each of those areas we have ongoing research being
    managed either in the national laboratories, or in private
    industry or universities, which are three components of the
    country's scientific support that we call upon regularly. So,
    we do have broad agency announcements that have been put out
    through the HSARPA organization, for chemical, and biological
    sensors, as well as in the radiological and nuclear area.
        And, if I may, the primary focus in all of the sensor
    development is to do things faster. Because, for example,
    BioWatch, we do a sample every day, but it takes perhaps a day
    to be able to do the assays on that sample, and therefore there
    could be 48-hours. The ultimate system that we would someday
    want to get to, and, some of our research, I think will lead in
    that direction, is to be able to do the sampling at the site,
    be able to do the assays, and then telemetry the information
    from that site to a central command control area. They would be
    working, obviously, very closely with General Libutti's people
    to make a determination that something has happened, and
    therefore, corrective action would be taken.
        Senator Cochran. Does this budget request include research
    and development of medical countermeasures across the agencies
    portfolios, or does the Science and Technology Directorate
    serve only in an advisory role?
        Dr. McQueary. The medical countermeasures is the
    responsibility of Health and Human Services. We serve in an
    advisory role in that area, and have people that meet regularly
    with people in Health and Human Services to discuss programs
    that should be implemented.
        Senator Cochran. What assessments have been carried out by
    the Information Analysis and Infrastructure Protection
    Directorate of our vulnerability to biological attacks that
    will guide decisions regarding the investments that should be
    made to develop, produce and purchase vaccines or other
    medications for the Nation's biological defense.
        General Libutti. The work that we have done since I have
    been on board, since late June or early July, sir, has been to
    work with Dr. McQueary and his folks, conduct surveys and
    visits across the country to key high-threat areas, to get as
    smart as we can relative to the threats posed by the biological
    and chemical threats, and to conduct appropriate analysis
    including developing models to give us a strong indication of
    what the impact of such an attack would be.
        We have recently developed a program that we have briefed
    to high officials in our government, in the Administration,
    that outlines across the board threats in aviation,
    transportation, and biological, and chemicals weapons. What we
    have developed is still a work in progress. But it is a good
    model. We've looked at the impact and consequences of various
    events particularly across major urban areas.
        So those are the kinds of activities that we have been
    engaged in, in concert with Dr. McQueary and other members of
    the inter-agencies; specifically, Health and Human Services,
    CDC, and others who have a primary interest in the impact of
    such an attack.

                    INTEROPERABLE COMMUNICATIONS AND SAFECOM

        Senator Cochran. Senator Byrd.
        Senator Byrd. Thank you, Mr. Chairman.
        Secretary Ridge has laid out the department's goals, and he
    stated that one of his highest priorities was interoperable
    communication and equipment. And he set a deadline of December
    2004, for implementing a short-term solution, that will allow
    first responders to communicate with each other during a
    disaster. Dr. McQueary, your directorate is in charge of
    coordinating and promoting interoperable communications for
    public safety.
        The President's budget proposes to eliminate funding in the
    Justice Department for interoperability grants. When my staff
    asked the Justice Department why the funds were dropped from
    the budget, my staff was told that interoperability is a
    Homeland Security responsibility. Yet the President's budget
    sets aside no funds for this purpose in the Department of
    Homeland Security budget. So I ask, can you explain the short-
    term solution and why no funds are requested to address this
    problem?
        Dr. McQueary. We actually do have funds requested to
    support the SAFECOM program, which is the program for which the
    Science and Technology Directorate has direct responsibility.
        Senator Byrd. How much is the request?
        Dr. McQueary. I believe, sir, $20--if I am not mistaken,
    its $22 million. I'll check behind me, and make sure I give you
    the correct number. But I believe it's $22 million for that
    effort.
        And what we expect to come out of that effort, as Secretary
    Ridge had indicated, is a set of standards that State and
    local, can use to acquire equipment, and to provided
    interoperability on what we're referring to as the penultimate
    solution, because what we will be providing is not the ultimate
    solution in interoperability. I will try to be precise in what
    I mean by that.
        There are technical capabilities today that exist in some
    companies. For example, if you think of a point electronic box,
    a box that can receive signals from many different types of
    radios, and that box can in effect convert signals from one
    radio into a protocol or a format that would be needed by
    another radio it is trying to talk to in order to permit those
    two to be able to have a communication. And, similarly, you can
    create conference calls, if that were the objective. Obviously,
    there are limits to the number of possibilities of different
    kinds that can be implemented.
        The ultimate solution, I believe, will be to move into
    software defined radios, and a considerable amount of research
    work has gone on in that area. That would be a system in which
    new radios, as they are purchased, would permit people to
    communicate with one another based upon the radio itself being
    able to recognize the different types of communication
    protocols and accomplish that.
        Senator Byrd. The SAFECOM money is not money for State and
    local governments.
        Dr. McQueary. That's----
        Senator Byrd. SAFECOM is for standards setting. To actually
    fix the problem, State and local governments need money to buy
    the interoperability equipment.
        Dr. McQueary. Excuse me.
        Senator Byrd. Yes.
        Dr. McQueary. I did not mean to imply that the $22 million
    that we have in our budget is to be used to purchase equipment.
    It is indeed the necessary effort to establish the standards.
    Of course, the State and locals will have access to grant money
    that will be provided by the Office of Domestic Preparedness.
    And what we will do, and have already done in some cases, is
    provide guiding standards by which we would expect them to
    purchase new equipment in the expenditure of that money. We see
    that as the vehicle to permit State and locals to be able to
    transition into having more interoperable capability.
        Senator Byrd. The President is proposing a cut of over $700
    million of first responder programs in the Department, and a
    cut of $1.5 billion for first responders government wide.
        The interoperability problem is yet another reason why we
    should not be cutting funding to first responders. How does the
    Department justify cutting first responder grants when the
    short term solution that the Secretary announced will cost
    several million dollars to implement?
        Dr. McQueary. If you're proposing that to me, sir, I was
    not a participant in that, and therefore, I am not in any
    position to answer the question, but I am sure that my people
    will be pleased to provide an answer to the question that you
    proposed.
        [The information follows:]

                Justification for Cutting First Responder Grants

        The President's fiscal year 2005 request includes more than $3.5
    billion to support ODP programs and activities. This represents a $3.3
    million increase over the Fiscal year 2004 request. The fiscal year
    2005 request includes funds to continue the Homeland Security Grant
    Program which includes the State Homeland Security Program at $1.4
    billion; the Law Enforcement Terrorism Prevention Program at $500
    million; and the Citizen Corps Program at $50 million. Funds are also
    provided for the continuation of the Urban Areas Security Initiative at
    $1.4 billion; the Fire Act Program at $500 million; the Emergency
    Management Performance Grants at $170 million; as well as for ODP's
    training, exercise, and technical assistance efforts.
        The continuation of these efforts, and the $3.3 million increase in
    ODP's overall request, coupled with the President's request for a 10
    percent increase in funding for DHS as a whole, provides ODP, and the
    entire Department, with the resources we require to help secure the
    Nation from acts of terrorism. The Administration and Department remain
    committed to providing our Nation's emergency prevention and response
    community the resources they need to continue to secure our Nation from
    future acts of terrorism.

                              UNIVERSITY PROGRAMS

        Senator Byrd. Your budget request includes a $38.8 million
    reduction for Homeland Security University and Fellowship
    Programs. In fiscal year 2004, this subcommittee provided $69
    million for this program, $60 million more than the President
    requested. The subcommittee expects the academic community to
    play a major role in identifying and solving problems facing
    the homeland.
        The White House has criticized Congress for earmarking
    funds for Science and Technology, and so this subcommittee
    decided not to earmark funds last year. Instead of reinforcing
    this decision, the President is proposing to cut university
    research by over 50 percent. Could you tell the subcommittee
    what the rationale may be for such a drastic cut to this
    program in fiscal year 2005?
        Dr. McQueary. This is an area in which I can assure you we
    had considerable internal debate and discussion. I would have
    to hasten to say, sir, that at some point we all work for
    someone and it was time for me to salute and say, yes, sir, I
    will try to do as much as we possibly can with the proposed
    amount of budget, and that is what we will do.
        Senator Byrd. Your budget justification notes that three
    Homeland Centers of Excellence will be selected by the end of
    fiscal year 2004. How does this funding reduction affect your
    ability to select other university centers of excellence.
        Dr. McQueary. First, the $30 million that's proposed is
    ample funding to support three University Centers of
    Excellence. We have, of course, selected one. And we plan to
    select two more this fiscal year. In fact, the necessary
    activity is well underway in order to accomplish that.
        We fund the University Centers about $5 million each, minus
    a little bit of overhead associated with managing that process.
    The balance of $15 million is completely adequate to support
    not only the hundred fellows and scholars that we have already
    approved. But also to add another hundred to that.
        In summary, $30 million supports three Centers, as well as
    200 scholars and Fellows.
        Senator Byrd. So you're saying, are you, that there will be
    two additional centers selected at the President's funding
    level?
        Dr. McQueary. I am sorry, sir.
        Senator Byrd. Are you saying that there will be two
    additional centers selected at the President's funding level?
        Dr. McQueary. Yes, sir, there will be two additional,
    bringing us to a total of three. One is in animal diseases. The
    other is in post-harvest food safety.

                               CHEMICAL DETECTORS

        Senator Byrd. In your written statement you list as an
    accomplishment of your directorate that you worked with the
    D.C. Metro System to deploy chemical detectors in the D.C.
    subway system. This is an excellent system to give Metro the
    capacity to immediately determine that the subway has been
    exposed to a chemical agent, so it knows how to effectively
    respond to the attack.
        I understand that this system is now in operation and you
    view it as an accomplishment. After the attacks of 9/11, the
    Senate approved $15 million for this pilot project. This
    funding was included at Congress's initiative, it was not
    requested by the President. In fact, the White House
    specifically objected to this funding, describing it as
    excessive.
        Is there any funding in the President's request to either
    complete the D.C. chemical detector system, or to take
    advantage of the lessons learned from this pilot program to
    deploy the chemical detectors in other large subway systems
    around the country?
        Dr. McQueary. Well, at this time we have proven the concept
    of operation for that system, and it is something we are
    extremely proud to have been a part of, I can assure you. So, I
    compliment the Congress on appropriating the funding necessary
    to get it launched.
        We do have the measurement system, both chemical
    measurement as well as video capability, tied into a central
    control station in downtown D.C., as you probably know, I am
    sure you know. We view it as a responsibility of Washington,
    D.C. to carry the program forward, for example, if there is a
    need or desire to expand to more stations within the
    Washington, D.C. area.

                MANPADS SURFACE TO AIR MISSILE COUNTER MEASURES

        Senator Byrd. Your budget includes $61 million to determine
    whether a viable technology exists to address the threat
    shoulder-fired missiles pose to commercial aircraft. This
    funding request followed $60 million approved by Congress in
    fiscal year 2004. The details of this threat are well
    documented. The Congressional Research Service estimates there
    are as many as 700,000 of these missiles globally. Some of
    which are on the black market, selling as low as $5,000 apiece.
        CRS also estimates that there have been 29 instances in
    which civilian planes have been hit by shoulder-fired missiles,
    none of which occurred in the United States.
        However, in May 2002, the FBI warned law enforcement
    agencies to be alert to the potential use of surface-to-air
    missiles against U.S. aircraft. If such a missile was fired at
    a commercial aircraft here in the United States, it would wreak
    havoc on our economy.
        How soon do you believe that we can begin to outfit
    commercial aircraft with a system to counter surface-to-air
    missiles?
        Dr. McQueary. I believe that we expect by the end of
    calendar year 2005 the Administration and the Congress will be
    in a position to have scientific information from which to make
    a decision as to whether we should outfit planes, commercial
    aircraft, in this country.
        Science and Technology, as an organization, will not be
    recommending one way or the other. Rather, that is a decision
    for the Administration and the Congress to make, we believe.
        Senator Byrd. How realistic is it to convert to existing
    technology on military aircraft to our commercial fleet?
        Dr. McQueary. We believe that it is in the category of,
    what I would call, an engineering problem, rather than needing
    a scientific breakthrough in order to do this. There are really
    two or three issues that drive the commercial airline fleet. Of
    course, one is that certifications necessary to get approval to
    put anything on an aircraft is perhaps more stringent for
    commercial aircraft.
        Also anything we do to an aircraft that would add air drag
    will increase fuel costs, and so there are multiple issues to
    be dealt with as one decides which technology would be
    appropriate. Regarding the technologies themselves, we do
    believe that it is eminently feasible to put them on commercial
    aircraft. And, we have three contractors that are in the early
    stages of studies that will lead to a down selection of one or
    two contractors to go into the development of such a system.
        The other important factor is that reliability must be such
    that we can afford to have them on the planes. The military can
    actually carry its support system with it wherever the planes
    fly. But, if you consider all of the airports into which our
    planes go, just in this country alone, the idea of trying to
    have a support system at each one would be extremely expensive.
        So the reliability of the systems need to be greater than
    what we are seeing with the military versions right now.
        Senator Byrd. Do I have time for one more?
        Senator Cochran. Senator Stevens has come in and we want to
    include him.
        Senator Byrd. I shall desist.
        Senator Cochran. Senator Stevens.

                             TSA DETECTION SYSTEMS

        Senator Stevens. Thank you very much.
        I was enjoying the Senator's questions, as a matter of
    fact. I, gentlemen, have spent quite a bit of time with the
    aviation community trying to figure out where we're going in
    terms of some of the homeland security activities. And, I am
    impressed with comments that I have received from many of them
    that our systems are designed to deal with metal and not with
    substances. How would you answer that?
        Dr. McQueary. Our systems are designed to deal with----
        Senator Stevens. Metals rather than substances.
        Dr. McQueary. Metals rather than . . .? I'm afraid I don't
    understand the question, sir.
        Senator Stevens. Well, we're looking for guns, we're
    looking for knives, we're not looking for chemicals, we're not
    looking for biological weapons. We're zeroing in on what was
    used in 9/11 and not what the terrorists might be using in the
    future. Is that correct?
        Dr. McQueary. Now, I understand the question. Within the
    Science and Technology Directorate we do have some research
    work that we're funding this year to be able to make detections
    of explosive devices at range, if you will. This is in the very
    early stages, and I would not for a moment try to tell you that
    I think that we have a solution to that problem.
        The Israelis have, of course, worked on this in great
    detail. We have had many interactions with them. It's a hard
    problem, but it is an area which we think is important towards
    being able to do the things necessary to make the airports,
    airlines and travel safer. It is a very important area.
        Senator Stevens. Well, over the past recess, I went through
    major airports, and I asked to be shown the TSA systems. And, I
    must say they are very impressive systems, but all of them are
    designed for what I said, to locate knives, to locate metals
    that might be in the baggage. Are we looking towards trying to
    ascertain the presence of chemical substances, bacterial
    substances, and explosive substances?
        Dr. McQueary. I will tell you, the area where I do not
    believe we have a satisfactory answer to in the bacterial area.
    It's very complex, very difficult, to deal with what a person
    can do to bring something in a handkerchief into the country.
    It would be very, very difficult to detect a bacterial
    substance, unless one were to get into some sort of invasive
    type of measurement system. So far, we have not chosen to get
    into that level. We as a country, have not chosen to go that
    far.
        In chemicals, there are many different types of detectors
    that can indeed detect chemical components that would make up
    explosive systems or any kind of liquids that you might have.
    But you have to be able to get a sufficient signal, if you
    will, a sufficient amount of the chemical being put forth into
    the air so that it could be detected, unless we go to some kind
    of invasive system. And right now, our focus is on what we
    might be able to pick up from the air, if you will, the general
    air surrounding a passenger in that area.
        Senator Stevens. Well, Doctor what about the President's--
    --
        Dr. McQueary. We are not ready to--I'm sorry.
        Senator Stevens. I beg your pardon.
        Dr. McQueary. Please continue.
        Senator Stevens. What about the presence of detonators?
    We're watching daily in Iraq bombs go off by someone dialing a
    cell phone.
        Dr. McQueary. Right.
        Senator Stevens. And alerting, you know, energizing a
    detonator. Are we trying to discover the presence of detonators
    in baggage?
        Dr. McQueary. I can't answer the question. I don't know off
    hand--I simply don't know. I should know the answer, but on
    that particular question, I don't know. I will be happy to look
    into it and find out exactly what we are doing for you.
        [The information follows:]
                 Discovering Presence of Detonators in Baggage
        Reliable detection of detonators in baggage is important to the
    security of the transportation infrastructure. The responsibility for
    this security measure currently remains with the Transportation
    Security Administration. Additional information can be provided in a
    classified briefing.

        Senator Stevens. Alright.

                     RESEARCH AND DEVELOPMENT CONSOLIDATION

        Let me shift to the Coast Guard, if I may. Are any one of
    you involved in the changes that are taking place in research
    and development funding. That's in the Science and Technology
    Directorate.
        Dr. McQueary. That's right.
        Senator Stevens. That's yours, is it Doctor?
        Dr. McQueary. Yes, sir.
        Senator Stevens. When we approved the transfer of the Coast
    Guard to the new Homeland Security Department, it was my
    understanding, and I think that it was in the basic law and in
    the report, that the department was to be left as a complete
    unit. I am informed now that the budget proposes to transfer
    the research and development funding in units of the Coast
    Guard to your directorate. Is that right?
        Dr. McQueary. That is correct. But, I need to be precise on
    what we mean by transfer. That unit will never lose its close
    ties with its parent organization. We will assume research and
    development oversight for it.
        As you are probably aware, the Congress actually cut the
    research and development budget for the Coast Guard laboratory
    last year. So they entered this year with no money other than
    support for the people that are in that laboratory. They have
    had no research and development program in this fiscal year. We
    do have money in our Science and Technology budget for fiscal
    year 2005 to support the Coast Guard, not only the people at
    the laboratory, but also a modest research and development
    program.

        SHIFT OF $13.5 MILLION FROM THE COAST GUARD TO THE SCIENCE AND
                             TECHNOLOGY DIRECTORATE

        Senator Stevens. My information was that the budget
    proposes to shift $13.5 million from the Coast Guard to your
    directorate. Is that wrong?
        Dr. McQueary. No, that's not incorrect. The $13.5 million
    is basically the operational costs for the labs that are in
    Connecticut. And we're putting in another $5 million for
    research and development work.
        Senator Stevens. Are you taking over direction of it, and
    taking it from the Coast Guard?
        Dr. McQueary. That's harsher language than I would choose
    to use.
        Senator Stevens. The language. The legislation is very
    harsh. I drew it.
        Dr. McQueary. Okay. We have responsibility, we had
    responsibility in the Science and Technology Directorate to
    advise and direct the Coast Guard on what scientific work they
    needed. However, I would say directly, that in order to
    accomplish the determination of what we must do, we have Coast
    Guard people on our staff, we have a Coast Guard Captain who is
    in residence with my Science and Technology group. His job is
    to make sure that we're representing the needs of the Coast
    Guard in the scientific work that we undertake. And that's the
    same thing we do for each and every one of the operational
    units within the Department of Homeland Security.
        We're not an independent island on research and
    development. We're a service organization intended to provide
    the very best science and technology to these operational units
    which stand at the ready each and everyday to do the job the
    Department of Homeland Security has to do.
        Senator Stevens. Well, it's a technicality I imagine, but
    when Congress declares war, the Coast Guard becomes a part of
    the Department of Defense.
        Dr. McQueary. Right.
        Senator Stevens. You're familiar with that?
        Dr. McQueary. Yes, sir.
        Senator Stevens. The legislation we passed to authorize the
    transfer of the Coast Guard to the Department of Homeland
    Security was done in a fashion so that, if that transfer to the
    Department of Defense was triggered, it would be a whole unit.
        It appears to me that slowly but surely you're taking away
    from the Coast Guard the things that make it a whole unit,
    namely research and development.
        Dr. McQueary. I spent my entire career in research and
    development, and my experience tells me that small pockets of
    research and development can never be as effective as being a
    part of a larger research and development organization. We
    believe that by transferring the Coast Guard's research and
    development into the Science and Technology Directorate, and
    giving them more day-to-day interaction with the scientific
    work that is going on, that we will actually end up doing a
    better job, not only for the department, but also for the Coast
    Guard itself.
        Senator Stevens. Are you prepared to do that for the
    Department of Defense when it becomes a part of the Department
    of Defense?
        Dr. McQueary. I----
        Senator Stevens. I don't think you get my point. You have
    no authority to do that.
        Dr. McQueary. We have----
        Senator Stevens. I would urge you to check with your legal
    department and determine what authority you have to transfer
    anything from the Department of Defense, from the Coast Guard,
    without our approval.
        Dr. McQueary. Well, I am sure that if we don't have the
    authority to do it, we do not propose to do it without your
    approval, if that's the case.
        Senator Stevens. Sometimes people are ignorant of the law.
        Dr. McQueary. Well, that could very well be the case here,
    too.
        Senator Stevens. Well, I don't think.
        Dr. McQueary. But I can assure you that there is no
    intention----
        Senator Stevens. I don't mean to be abrupt with you Doctor,
    but I do believe that it is essential that if and when the
    Coast Guard becomes a part of the Department of Defense, it be
    a total unit.
        Dr. McQueary. Yes.
        Senator Stevens. An integral, operational unit that is just
    transferred and not leaving portions of it somewhere else. That
    was the debate that we had, and I hope that we will pursue that
    and you will take a look at it for us.
        Now, let me ask you----
        Dr. McQueary. I will do that.

                      UNIVERSITY PROGRAMS/ENERGY SECURITY

        Senator Stevens. One other thing if I may. Well two really.
    I see that you have got these Homeland Security Centers of
    Excellence, and I congratulate you. The Senator from West
    Virginia was talking about one in terms of the Center for
    Excellence with regard to food programs. And one, I understand,
    will be combating animal related agro-terrorism, and the other
    focuses on post-harvest food security.
        What about energy production and energy security. Are you
    focusing on that?
        Dr. McQueary. For the areas of energy production and energy
    security is a combination of General Libutti and myself, as
    well as the Department of Energy. I believe one of the Homeland
    Security Presidential Directives clearly spells out that the
    Department of Energy has responsibility for energy. So the work
    that we do would be to work with General Libutti from an
    infrastructure protection standpoint. And, perhaps I would let
    him comment rather than be presumptive about saying what he
    would be doing.
        Senator Stevens. General, are you pursuing that?
        General Libutti. Sir, the effort that we make in the main,
    in terms of our mission profile, is the risk assessment
    vulnerability piece of any part, large or small, of the
    national infrastructure. So in terms of chemical site security
    surveys, we are working with our friends at the Nuclear
    Regulatory Commission, working with other members in the inter-
    agency, and our job remains principally to advise relative to
    the threat.
        We recommend preventive actions in concert with the rest of
    the community, that ought to be taken immediately or that have
    a long-term proposition relative to protecting America. So,
    we're about the threat, vulnerability and risk assessment piece
    of all of these programs. And we share that information with my
    friend, Dr. McQueary, and other members of Health and Human
    Services, Center of Disease Control, the Department of
    Agriculture, or the Department of Energy.
        So we're a player at the table. I might add, and this is
    not a marketing piece, but we are the newest members of the
    National Intelligence community, and we are full players. We
    have connected very well with all the major elements within the
    Federal Government, as well as State and local communities that
    deal with information sharing, analysis, and simply stated the
    threat.
        I tell you that just for a sense of what our directorate is
    all about and how we interact with other members of the
    intelligence community, including TTIC, CIA, and the FBI, who
    principally has responsibility on the law enforcement side.
        Senator Stevens. Thank you.
        I will be delighted to try and understand what you just
    said. For instance, in terms of our oil pipeline, do you review
    that pipeline for threat?
        General Libutti. We do when we gleam specific intelligence
    from looking at all of the sources, which indicates that it is
    a target set. We absolutely look at it in the broader
    infrastructure requirements that bring us to a situation which
    causes us to look at it with other members of that community.
        Senator Stevens. And do you----
        General Libutti. And we do that across all of the
    infrastructure.
        Senator Stevens. Do you review the ports through which we
    import 57 percent of our oil?
        General Libutti. Again, we work in concert with our friends
    in the Coast Guard and in the industry, the container shipping
    folks, to look very hard at the threat and the risk associated
    with that threat, in a specific port, city, or State.
        So the answer is, yes, sir, we do.
        Senator Stevens. Okay.

                                ENERGY SECURITY

        Well, let me give you one that I think you ought to take a
    look at then. And the Department of Commerce can verify this.
        By 2015, we will be importing 40 percent of our natural gas
    in the form of LNG. We do not have a LNG port in the United
    States. We have authorization. Years ago we passed legislation
    to have off-shore ports, but none were ever built. I think that
    in your department you ought to be looking at the planning for
    the future, how are we going to ensure the security of that,
    and how will it be relevant to the importation of oil and other
    substances.
        Should we separate those ports from existing ports by
    having them all come into one port? Obviously, that would
    increase the possibility of the threat.
        But, I haven't heard anyone talk about planning for the
    national security, or homeland security on the access of
    natural gas in liquefied form.
        General Libutti. Sir, you're absolutely right. When that is
    tee-ed up as a critical issue, and I think from your
    perspective we ought to be teeing it up right now, we would be
    very much involved in looking at that. Not from an engineering
    standpoint, or the physical lay-down standpoint, but from the
    threat perspective.
        And you're absolutely right, we should be involved in that,
    and I will take your note back and we will take a look at it to
    see what we need to do right now.
        Senator Stevens. Don't put me down as an advocate, I would
    just assume bringing Alaska's gas down. But it seems that other
    gas is going to get here first, sir.
        Thank you very much, Mr. Chairman.
        Senator Cochran. Thank you, Senator Stevens.

                              UNIVERSITY PROGRAMS

        Let me follow up with a comment about a question Senator
    Byrd asked on the Centers of Excellence, the university
    programs that we were talking about with Dr. McQueary.
        Last year, we appropriated about $69 million and it was
    intended to support these programs. Just because the
    Administration is requesting only half of that, $39, $30
    million, doesn't mean that you shouldn't spend the $69 already
    appropriated. There are provisions for deferring expenditures
    or rescinding expenditures, but there is no provision for not
    spending it.
        So, what I am suggesting is that money is in the pipeline
    and it may very well support more than three university
    centers.
        Dr. McQueary. If I may, it will support more than three
    universities. And in fact, what we have determined already,
    sir, is that we can create five universities when we reach the
    limit of the money that you have authorized us in fiscal year
    2004. But, when that is gone, we would be faced with having to
    cut back to the three.
        I have asked for a plan already as to how we would
    implement a total of five, recognizing that we could be faced
    with having to eliminate two of those at the end of their 3-
    year period, which is what we're looking at right now.
        Senator Cochran. Thank you.

                          NOAA WARNING ADVISORY SYSTEM

        I am going to yield, again, for questions from Senator
    Stevens. And then we will go back to you, sir.
        Senator Stevens. If I may just ask one.
        I forgot to ask a question about the NOAA Weather Radio. We
    asked that the Department prepare a report by December 15, of
    last year, on the use of NOAA Weather Radio as a component of a
    national warning system measure to expand consumer access to
    the warning systems in efforts to inform and educate the public
    about national security.
        Currently we rely upon the radio for the old national
    warning system. We have tried to expand so that all forms of
    communication would receive the warning, particularly of a
    terrorist event. And all portions of the country could be
    alerted to that immediately. As I said, currently, that would
    only go out by radio, but it does not use NOAA Radio. NOAA
    Radio hooks into almost every radio station, television, and
    weather program that there is in the country. I particularly
    would favor some national legislation to mandate carrying such
    messages, or to include putting them into the internet
    directly. But, that hasn't been done yet.
        However, we did ask for the NOAA Weather Radio to be used
    as a component of the warning system. Who is working on that in
    your Department?
        Dr. McQueary. Sir, I don't know.
        General Libutti. Sir, we have the lead to look at that in
    terms of how it fits into our broad responsibilities, as I
    outlined in my presentation of information sharing and alert
    advisory systems. So we are indeed looking at that, and that is
    still a work in progress.
        Senator Stevens. Well respectfully, General, we asked in
    2002 for a report by December 15, 2003. When will we see your
    report?
        General Libutti. Sir, I will take that on board as an
    action and get back to you and your staff.
        [The information follows:]
                            NOAA Alert System Report
        The congressional report has been cleared by OMB and the
    Department. The report was approved for transmission to the Hill on May
    28, 2004, and delivered on June 1, 2004.

        Senator Stevens. Thank you very much.
        Thank you, Mr. Chairman.
        Senator Cochran. Thank you, Senator.
        Senator Byrd.
        General Libutti. If I may, sir, as a continuation, I will
    get back to you as soon as I can within the next couple of
    days. But a staff note to me reminds me that we were going to
    come to grips with your question very, very soon. And I will
    define what soon means when I respond to you.
        Senator Stevens. Thank you very much.
        General Libutti. Yes, sir.

                       CRITICAL INFRASTRUCTURE PROTECTION

        Senator Byrd. Thank you, Mr. Chairman.
        Last year, General Libutti, I asked Secretary Ridge about
    the role of the Federal Government in protecting chemical
    facilities from terrorist attack. He said that he believes
    chemical companies should be conducting their own assessments
    and paying for security improvements.
        At the Secretary's budget hearing last month, Senator
    Murray asked Secretary Ridge about port security funding. And
    the Secretary again held the view that port owners should be
    responsible for security investments.
        Now General Libutti, if you were the CEO of a chemical
    company, your highest priority would, probably be creating a
    quality product at a price that would create profits. If you
    were the director of a private port, your first priority would,
    in all likelihood, be that of maximizing the number of
    containers or passengers that would use the port.
        And so with all due respect, I have very little confidence
    that chemical company CEOs or port directors would have
    defending against a terrorist attack at the top of their list
    of things to spend money on. Yet, the Department clearly
    believes that, when it comes to protecting our critical
    infrastructure the private sector should bear the financial
    burden.
        Can you provide the subcommittee, today, with any
    benchmarks that you have established to show the private sector
    is making the necessary investments to secure our critical
    infrastructure and key assets?
        General Libutti. Sir, I appreciate the question because,
    like you, chemical site security for the Nation is a priority
    for IAIP and the Department. I would tell that I believe the
    right answer to how we move forward with our chemical site
    partners in the private sector, the Federal Government, and my
    Directorate is the key word partnership.
        I think the industry overall needs to belly-up to deal with
    improved security across their industry, especially in
    particularly high-threat areas. As a subset of that, I would
    emphasize the high-threat areas near large populated areas
    across the country.
        Over the last several months we have conducted site surveys
    where folks from my office have visited top priority target
    sets involving the chemical site areas. We have worked with
    them, and we have seen them demonstrate a great spirit of
    cooperation in dealing with assessing the risks of their
    facilities, and taking actions to improve the readiness of
    those facilities, in terms of both preventative and recovery
    activities.
        I cannot, sir, tell you the kind of money that they have,
    as an industry, put toward this effort. I will look into that
    and provide you our best estimate and judgments. But I cannot
    answer that question right now.
        I think what is important, I might add to share with you
    sir, is that during the visits we worked to improve readiness,
    we highlighted protective measures, standoff distances, buffer
    zones, cameras, and command and control systems, all which they
    took on in a very positive way.
        We have also sent out to all sites, not just the sites that
    we have visited, several different documents or what I would
    call aids in improving their readiness. We have sent out the
    following: characteristics and common vulnerabilities of
    chemical sites/facilities; potential indicators of terrorists
    attack activities for chemical facilities; and buffer zone
    protection planning templates for chemical facilities.
        We have really looked at this in the same way that you
    have. This is a critical priority because it is a critical
    target site for potential terrorist attacks.
        We have looked at the highest areas of concern because of
    the relative impact on the community, if indeed an event
    occurred. And we have a plan over the next year to look at an
    additional 360 sites or facilities across the country. I might
    also add that the focus is to look at this in a realistic way
    not in terms of eliminating all threats, but dealing with this
    based on what I call risk management across our country. That
    is to say that we have to establish priorities, and indeed, the
    Federal Government in concert with our friends in the community
    have to attack this thing on a single front.
        I didn't mean to be so long winded, but that captures my
    concerns and the actions we're taking.
        Senator Byrd. Well General, could you provide the
    subcommittee with any benchmarks that you have established to
    show that the private sector is indeed making the necessary
    investments to secure our critical infrastructure and key
    assets?
        In other words, Secretary Ridge says, it's up to the
    private sector. So have you established any benchmarks that
    show that the private sector is indeed making the necessary
    investments to secure this critical infrastructure and key
    asset?
        General Libutti. Sir, as I indicated earlier in my first
    statement of my presentation here, I don't have specifics
    relative to the financial investments. If my staff has those,
    I'll provide them as quickly as possible. If not, we will do
    the research to get that to you.
        I would say, just spinning off the Secretary's comment, and
    based on my experience, since I have been on board from late
    June or early July, I have seen not only a willingness and
    spirit of cooperation, but an understanding on the part of the
    chemical site industry and other industries, which we call key
    critical industries, a willingness to move out smartly, to do
    what needs to be done to protect their equities, to improve the
    security to their physical sites, etcetera, etcetera.
        So the attitude is there. We will continue to capitalize on
    that, and I will get you the information you have asked for,
    sir.
        [The information follows:]

               Securing Our Critical Infrastrucure and Key Assets

        As part of a wide effort to facilitate rather than mandate, DHS
    continues its effort to develop ``best practices'' for industry by
    working with the private sector and professional associations. DHS
    believes that the private sector, which controls over 85 percent of the
    nation's critical infrastructure and key assets (CI/KA), must be
    involved in setting national protection standards. By partnering with
    associations and groups, DHS plans to create realistic, proactive
    protection practices to bolster the physical hardening of the nation's
    CI/KA.
        One example of DHS working closely with industry is the ASME
    Guidance on Risk Analysis and Management for Critical Asset Protection.
    This important effort is intended to demonstrate that industry can not
    only provide DHS leadership with information, but can also help create
    industry-based guidance for risk analysis and risk management. This
    document will establish common terminology and a common basis for
    reporting the results of risk studies, helping the protection community
    and the private sector streamline and standardize risk analysis
    reporting. Such standardization provides government agencies and
    private industry a framework from which to collect, report, and respond
    to potential terrorist threats.
        The ASME effort highlights how DHS is working closely with the
    private sector to develop baseline best practices and protective
    measures. Our plan is for these guidelines to mature into sector-wide
    protection standards that will be adopted industry-wide. The initial
    phase of the ASME effort is to focus on Nuclear Power Plants, Spent
    Nuclear Facilities, Chemical Plants, Petroleum Refineries; LNG Storage
    Facilities, Subway Systems (including bridges and tunnels), Railroad
    Systems (including bridges and tunnels) and Highway Systems (including
    bridges and tunnels). Depending on the success of the initial effort,
    it may be expanded to encompass other infrastructure categories.
        Another important DHS initiative to assist private industry in the
    protection of their facilities is the preparation and distribution of
    analytic products such as Characteristics and Common Vulnerabilities
    and Potential Indicators of Terrorist Activities reports. These
    products identify those vulnerabilities and threat indicators that are
    sector-specific. Such information, when used by industry, allows
    intelligent investments to be made to eliminate or mitigate specific
    vulnerabilities. Furthermore, DHS is in the process of fielding a
    network of Protective Security Advisors and establishing regional
    offices that will assist State and local governments, as well as the
    private sector, in their protective planning efforts.

        Senator Byrd. Alright.
        As I said in my opening statement I will be asking the
    General Accounting Office to conduct an independent review of
    the private sector's role in securing our critical
    infrastructure.
        It will be essential in assessing the need for investments,
    for Federal investments, to secure our critical infrastructure.
    So, it will be essential for Congress to have measurable
    benchmarks of private sector investments in such
    infrastructure, such as investments in chemical facilities,
    port security, and cyber security.
        Do you agree that having this information would be useful
    to determine if the private sector is meeting its obligation to
    protect our critical infrastructure?
        General Libutti. I can't see how it wouldn't be supportive
    and an indicator of their commitment. But as I said earlier,
    this is a partnership in my opinion, sir. So the Federal
    Government needs to provide advice, and education, in concert
    with Dr. McQueary and his folks and other members of the inter-
    agency, and share with them best practices, and cutting-edge
    technology. That's all part of this movement forward. So I
    don't see how that could hurt.
        I would be concerned if it became a weapon to be held up
    against them. Again, I think as we move forward we need to
    determine the right balance. But, I hear you loud and clear,
    and we will do our homework and get back to you, sir.

                   TERRORIST THREAT INTEGRATION CENTER (TTIC)

        Senator Byrd. Alright, General.
        One of the most important issues affecting the public's
    assessment of the Department of Homeland Security performance
    involves its record of sharing Homeland Security threat
    information with other Federal agencies, as well as with State
    and local governments, the private sector and the public.
        The Gilmore Commission, in its December 15 report, noted
    that the Department of Homeland Security had ``little power and
    capability to do this.'' In fact, the Commission concluded that
    the Department of Homeland Security faces significant
    competition from other agencies in disseminating information to
    State and local authorities, the private sector and other
    areas.
        Part of the problem, the panel said, is that the CIA was
    granted control over the Terrorist Threat Information Center,
    or better known as TTIC, which opened in May as a central
    repository for information from the CIA, the Department of
    Defense, the FBI, the Department of Homeland Security, and
    other intelligence agencies.
        But Congress, in writing the Homeland Security Act,
    envisioned giving the Department of Homeland Security the role
    of collecting, analyzing and sharing intelligence information.
    Putting TTIC at the CIA, the Gilmore Commission said, has
    largely sidelined the Department of Homeland Security and left
    it with a paucity--that's a good word--and left it with a
    paucity of competent intelligence analysts.
        While intelligence professionals have been much more
    willing to go to the CIA, the Department of Justice, the
    Department of Defense, or the State Department, this seems to
    have caused confusion at all levels of government regarding the
    respective roles of the TTIC and the Department of Homeland
    Security.

          CONCERN REGARDING TTIC BEING UNDER THE LEADERSHIP OF THE CIA

        Could you explain please, how it came about that the CIA
    was given the leadership of this intelligence function. And
    second, how it is that our homeland is made more secure by
    having such a confusing hierarchy of intelligence sharing
    agencies?
        General Libutti. Sir, as always, you ask the toughest
    questions and the ones that strike at the heart of what we're
    all about. And what we're all about, as I said earlier, is
    information sharing and infrastructure protection.
        The instrumental organization within IAIP that is charged
    with the backbone, the nerve center, the communications channel
    for sharing information, is the Operations Center. And then in
    support of that separate calls, conferences, and meetings
    attended by General Hughes who runs the IA side, and Bob
    Liscouski who runs the IP side.
        So, let me first say to you, we are very clear on what our
    mission is. I am very clear what my customer base is, it's the
    private sector, it's State and local authorities, extending
    beyond that, but not involved in, the police work. That's the
    FBI, and the people at the Department of Justice.
        But having said that, let me now turn to TTIC, IAIP and
    what you elude to as being a challenging approach towards
    dealing with intelligence.
        TTIC was established by the Administration and indeed by
    the President. It was done to integrate intelligence from
    overseas and foreign sources. It was done to incorporate
    intelligence and information that is provided by those who
    focus on intelligence/law enforcement within the domestic
    scene.
        Now, what I am saying to you, or mentioning to you,
    involves the CIA, the FBI, and by extension the local police
    forces across the country that have tens of thousands of great
    cops, who do great things for their community and country
    everyday.
        Now, I am going to try to draw a wiring diagram here, and
    if I miss the mark, I know that you won't hesitate to pull me
    back and let me talk in straight and plain English.
        You have TTIC here, which is not controlled by CIA, but by
    the DCI. Now we don't need to, if I may sir, get into an
    argument about the differences between George Tenet's two hats,
    but he does indeed wear two hats. And the responsibility that
    the DCI has is to provide supervisory overview responsibility
    for TTIC. And indeed, the director at TTIC is a gentleman, who
    was, or is, in the CIA.
        But TTIC is an organization to integrate, fuse, analyze and
    share domestic and overseas or foreign intelligence. IAIP is
    both a customer and contributor at TTIC. So is the FBI. So if
    you say to me, what about this TTIC group, I would say I am
    part of TTIC and it is sort of like in a religious setting when
    you talk about the body of Christ and the Catholic Church, that
    means every Catholic across the face of the globe. We are part
    of TTIC.
        And indeed, on occasion, we challenge and task TTIC who
    then goes out to its customer base to look at requirements and
    collection efforts. I'll take a breath and try to move forward,
    and try to be as organized in my expression as possible.
        So TTIC is here. Members of the Department of Homeland
    Security are part of TTIC. And by extension, that information
    in a very simplistic diagram, is passed to IAIP. It goes to
    General Pat Hughes, in the main, and to other members that are
    part of TTIC. For example, in Customs and Border Patrol, or
    whatever, it is shared with their parent unit as well. And that
    is all part of what we're trying to do. There should be an
    effort to take walls down and not put walls up.
        Information comes from TTIC to IA, and IA shares it with
    IP, because IP can't do the threat assessment risk analysis
    piece looking at critical infrastructure unless they know what
    that intelligence picture indicates. IA in the Department of
    Homeland Security, my operational directorate, looks at sharing
    information with other members of the customer base; private
    sector leadership, and State and local authorities.

             ORGANIZATION AND STANDUP OF THE TTIC AND ITS FUNCTION

        I'm talking there about advisors to the Governors, the
    homeland security advisors to the Governors. They get that
    information as well as local authorities. What that means is
    mayors and their leadership in the intelligence/counter
    terrorist operations. In most cities across the country, those
    are the senior police chiefs.
        I don't see, Senator Byrd, a conflict in the organization
    and standup of TTIC and its function. It's function is to
    integrate. My function and focus is on passing information to
    my customer base.
        I support the FBI who is a partner in this national effort.
    And they're in the law enforcement business. Fueled by and
    supported by the same intelligence that's coming out of TTIC. I
    don't see a conflict. We're improving the way we communicate
    everyday, we're sharing databases everyday, at a very highly
    classified level. And we're working more in concert with one
    another than we ever have.
        Leadership in the FBI, the CIA, and the leadership of my
    organization get it. They understand there needs to be a
    cultural metamorphosis in terms of information sharing. And
    we're going to keep working on that so young people in these
    organizations understand it is one team, one fight, as the Army
    says. And we need to understand that in terms of information
    sharing.
        I don't see a problem with the current intelligence
    organization. As always, I work everyday to improve it.
        Senator Byrd. Well, General, I understand plain English.
    But I am not sure that I understand everything that you have
    said here today. And I am not embarrassed to confess it.
        Let me ask a simple question.
        General Libutti. Sir.

                            SECURITY OF THE HOMELAND

        Senator Byrd. How is it that our homeland is made more
    secure by having such a confusing hierarchy of intelligence
    sharing agencies?
        General Libutti. I think that the homeland is much more
    secure. And I will talk only from my perspective in IAIP,
    Senator.
        We have shared over 70 advisories and alert bulletins in
    concert with other members of the Homeland Security team. We
    get threat information from the agency, our friends in the FBI,
    and, out of TTIC. Then, we look at that, conduct competitive
    and comparative analysis.
        Again, our focus is on our customer base, which includes
    other members of the Federal Government. So, we take that
    information, and we pass it on a secure backbone to customers
    that have clearances. For those who don't have clearances, we
    take the information that's classified, clean it up, and create
    what is called the tear line. Then, we coordinate the bulletin
    or advisory with our friends in the other intelligence
    agencies, and we send it out through our Homeland Security
    Operations Center.
        We have sent out many of those advisories. We normally
    follow up with phone calls to appropriate customers. We call
    industry leadership to amplify an important point. We send
    executive teams to places like New York, LA, and Las Vegas, as
    we did during the holiday period, to share with leadership what
    we know, and make recommendations on corrective action.
        I think, again, as you know, sir, I am sure your staff has
    briefed you, after 30 years in the Marine Corps and a couple of
    months at the Department of Defense, I spent a year and a half,
    as the Commissioner for counter-terrorism in the NYPD. When I
    finished that job, I came down and was proud to take this job.
        If it doesn't work on the streets of our great cities and
    small towns, it doesn't work for America. And I'm telling you
    now, sir, we have made a difference.
        Senator Byrd. Alright, let us suspend while the reporter
    changes his tape.
        May I ask him another question, Mr. Chairman?
        Senator Cochran. Yes, sir.

           VULNERABILITY ASSESSMENTS AND SECURITY: CHEMICAL INDUSTRY

        Senator Byrd. The Department of Homeland Security continues
    to take a hands-off approach with regard to chemical security
    by relying on the chemical plant industries. So here we go
    again, to assess vulnerabilities and take protective actions.
    We know that the EPA has estimated that if attacked, over 100
    plants located all over the country could affect over one
    million people each.
        We know that the Department of Justice released a study in
    April of 2000, concluding that the risk of terrorists
    attempting in the foreseeable future to cause an industrial
    chemical release is both real and credible.
        We know that in February 2003, the National Infrastructure
    Protection Center, which is now a part of the Department of
    Homeland Security, issued a threat warning that Al-Qaeda
    operatives also may attempt to launch conventional attacks
    against the U.S. nuclear, chemical, and industrial
    infrastructure to cause contamination, disruption, and terror.
        When Secretary Ridge testified last year he said that the
    chemical industry was better suited to assess vulnerabilities
    and take appropriate security measures than the Federal
    Government.
        Just last week, the General Accounting Office sounded
    another siren in testimony saying that, in spite of the
    industry's efforts, the extent of security preparedness at U.S.
    chemical facilities is unknown.
        Do you maintain the position that the chemical industry is
    better suited than the Federal Government to assess
    vulnerabilities and take protective actions to secure chemical
    plants?
        General Libutti. It can't be done alone or independently,
    sir. It is back to the point that I made earlier, it has to be
    done in partnership. And I think the Federal Government, being
    gentlemanly in their approach, from time to time, needs to be
    also muscular. We need to demand standards and guidelines to be
    adhered to. We need to be there, prepared to support them in
    developing their security programs that reinforce their safety
    programs.
        I'm with you 100 percent, sir. I can only tell you that
    it's a combined effort and everybody needs to pull his or her
    own weight.
        Senator Byrd. Does your budget request address this issue
    in any way?
        General Libutti. Yes, sir, it does.
        Senator Byrd. It is so? You said it does. How much is in
    the budget for this?
        General Libutti. In terms of chemical sites security we're
    talking about $35 million.
        Senator Byrd. And now you're talking about hardening
    security at chemical plants?
        General Libutti. Sir, I'm talking about visits,
    interaction, working to develop guidelines and the way ahead.
    We're talking about recommendations for how they can harden
    their target as we say in the military; standoff distances,
    excuse me, buffer zones, security plans. We're there to advise,
    educate, and help them develop their plants. As you know there
    are tens of thousands of these plants, large and small across
    the country. And as I said earlier, we looked at and visited
    over the last few months many of the facilities that we thought
    were key critical, meaning, if they were hit as centers of
    gravity, they would cause potentially the greatest impact in
    the surrounding area.
        I am very comfortable that we're taking the right approach
    on this. And we're going to look at several hundred additional
    sites or facilities over the next year.
        Senator Byrd. What more can you do to make sure that the
    chemical industry responds with a robust program to secure
    their plants?
        General Libutti. We need to demand excellence across the
    board. We need to be both their advocate and their coach
    relative to ensuring that they adhere to standards and best
    practices. We need to demand excellence in terms of security
    and should not let them off the hook.
        Senator Byrd. You bet. We have lots of work to do in this
    area.
        General Libutti. Yes, sir, we do.

               RESEARCH AND TECHNOLOGY INFORMATION DISSEMINATION

        Senator Byrd. Now, Mr. Chairman, I shall have further
    questions perhaps.
        Senator Inouye, who could not attend today's hearing,
    requested that the attached question be asked on his behalf. I
    ask that it be inserted in the record.
        He is concerned that the Department of Homeland Security is
    charging outside groups that wish to attend a March 8, 2-day
    forum, that will provide industry with information about
    homeland security research and technology requirements.
        For example, small businesses would be charged $525, and
    universities would be charged $425. Senator Inouye believes
    this information should be provided free of charge. I ask that
    his question be made part of the record.
        Senator Cochran. That objective is so ordered.
        Senator Byrd. And I thank both Dr. McQueary and General
    Libutti.
        Dr. McQueary. Thank you, Senator.
        General Libutti. Thank you, Senator.

         NATIONAL INFRASTRUCTURE SIMULATION AND ANALYSIS CENTER (NISAC)

        Senator Cochran. Senator Domenici is attending another
    meeting of his committee, the Energy Committee which he chairs,
    this morning. And he asked me to propound a question on his
    behalf. And it is this:
        The fiscal year 2004 Homeland Security Appropriations Act
    had approximately $23 million for NISAC. That's the National
    Infrastructure Simulation and Analysis Center. Would you please
    give the subcommittee the status of the allocation of the
    fiscal year 2004 funding? I think that's to General Libutti.
        General Libutti. Yes, sir, it is.
        I'll try to cut to the chase and cover the key points, sir.
    As you know this responsibility transferred the Department of
    Homeland Security from the Department of Energy in March 2003.
    Primary contractors are the Sandia and Los Alamos labs in New
    Mexico.
        The Senate Appropriations Committee provided approximately
    $30 million in 2003, and the House provided $20 million. Extra
    dollars from the Senate were dedicated for NISAC building at
    Kirkland Air Force Base in New Mexico. The joint conference
    provided $27.5 million; but there was no specific language for
    building. But with respect to what the Senator and your
    colleague had asked for, what we have done most recently, is
    that we retained sufficient funds to complete the survey and
    selection process. The date of ground breaking will be
    dependent upon site surveys and identification of a suitable
    site for the NISAC.
        So we're very attuned to the issue and concern of Senator
    Inouye. I am happy to provide additional details or perhaps
    visit with him to provide amplifying information.
        Senator Cochran. We will submit questions in addition for
    the record, and if you could respond to those.
        General Libutti. I would be happy to, sir.
        Senator Cochran. For the record, we would appreciate
    additional detail regarding the fiscal year 2005 budget request
    for NISAC and activities envisioned in the budget for that
    Center.
        General Libutti. I would add, sir, that our department is
    preparing a letter to the Department of Defense regarding
    building of a facility on the Department of Defense property,
    et cetera, et cetera. So, we'll be happy to provide response
    and detail.
        Senator Cochran. Thank you.

                      MANPADS/AIR MISSILE COUNTERMEASURES

        Following up on another issue that was raised by Senator
    Byrd. Is it feasible to accelerate the shoulder-fired missile
    defense program to make the technology available at an earlier
    date? Or, is the time line you have considered the most cost
    effective, or reasonable in terms of the needs for a cost
    efficient method of protecting commercial aviation?
        Dr. McQueary. We believe that the time line is a very
    aggressive time line, and in fact, we're certainly aware that
    there is great interest in the country about the very issue
    that you raised. When we met with each of the three contract
    winners, posed to them the following question: Would you like
    to come in and recommend a shorter schedule. None of the three
    agreed that they would be willing to take on, or would want to
    take on, a schedule that was shorter than the one that we had
    originally proposed.
        So, I think it is an aggressive schedule, and I think a
    careful examination of what we have to do in the alloted time
    period would conclude that is the case.
        Senator Cochran. Has there been any decision made or
    discussion of who's actually going to pay the costs of
    procuring and outfitting the airliners with this defense
    system? I understand that they estimated costs could be up to
    $10 billion.
        Dr. McQueary. There are a number of factors that go into
    that. We have not attempted to address, however, who would pay
    for it. We have attempted to address how much it would cost,
    though. So those decisions can be made. As I indicated earlier
    in the testimony, we view our responsibility as providing the
    scientific basis on which the Administration and the Congress
    can decide the approach the country will take in implementing
    such systems, if that is what we should do.
        We put target costs in of about $1 million each, but that's
    up front hardware costs. And anytime you field large systems,
    operation and maintenance typically dominates the overall long
    term costs of such systems. And I would expect that is the case
    on this one.

                                 CYBER SECURITY

        Senator Cochran. We know that you have recently developed a
    national cyber alert system to acquaint home computer users,
    and business and government agencies, with ways to better
    secure their computer systems from viruses. How would you rate
    the performance of the new national cyber alert system's
    response to the most recent computer virus outbreaks?
        Dr. McQueary. That was done by General Libutti's
    organization. I'll defer to him if I may.
        Senator Cochran. Sure.
        General Libutti. Sir, I would give you an estimate on a
    scale of 1 to 10, at 8.5 or 9. And that's a relative
    evaluation. Let me give you some additional information that
    perhaps would help understand where we are. This roll out of
    the alert system has just been done very recently.
        We have over 250,000 subscribers. Those who have subscribed
    to that system, are working that system across industry, home
    users and government. We think, I believe, it is the first
    great move to educate, inform and make people aware in a pro-
    active way, of viruses that may be coming our way.
        So I give it a pretty high grade, and we will continue to
    monitor that as time goes by, and improve on how we communicate
    with our customer base.
        Senator Cochran. What's the relationship between the cyber
    security division and TTIC; if any? Is there any collaboration?
        General Libutti. I mean in terms of a wiring diagram, if I
    may, there is no direct linkage. There is always within the
    Federal Government, particularly the inter-agency, there's
    linkages and pathways that permit people who work in the cyber
    business to communicate with people who have that interest, or
    that particular functional area of responsibility within TTIC.
        That is, there are people in TTIC who not only look at
    infrastructure protection from a threat perspective, but also
    can consider cyber concerns. The key point that I leave with
    you is, that the lead in terms of cyber security is within IAIP
    at the Department of Homeland Security.
        If we have issues that present themselves, then we will
    orchestrate appropriate meetings. There was an initiative taken
    by some of my folks in the cyber world to take a hard look at
    what I call a lower level inter-agency grouping between the
    communication folks, the national communication security guys,
    or guys in cyber security, and the Department of Defense. They
    met on a regular basis to review potential threats, and to look
    globally at the kind of activity that needs, to in my words,
    give us a warning and indicator that we need to do something.
        So we're trying to be as pro-active as possible, and we're
    trying to educate and make people aware of the threat to the
    cyberspace area.

                                 CYBER SECURITY

        Senator Cochran. How is the national cyber security
    division working with the private sector companies, such as
    Symantec, McAfee, and Norton, that specialize in anti-virus
    software and internet security.
        General Libutti. I think it's safe to say they're working
    very well with them. Briefings I have received have indicated
    no serious problems in terms of our linkage and cooperation
    with the business community overall.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Cochran. What law enforcement agency has primary
    jurisdiction in enforcing cyber crimes?
        General Libutti. I suspect again across law enforcement,
    and that's not my area of expertise, that it is both Secret
    Service and FBI.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

         Questions Submitted to the Science and Technology Directorate

                  Questions Submitted by Senator Thad Cochran

                             BIOSURVEILLANCE SYSTEM

        Question. Science and Technology's role in the Biosurveillance
    Initiative includes an increase of $65 million to expand environmental
    monitoring activities in cities determined to be at the highest risk of
    a terrorist attack.
        Can you give further details about the chemical and biological
    warning activities currently in place in these cities?
        Answer. The U.S. Department of Homeland Security's (DHS) BioWatch
    initiative has been successfully operating in approximately 30 of the
    Nation's urban centers since early 2003. BioWatch is an early warning
    system that can rapidly detect trace amounts of biological materials in
    the air whether they are due to intentional release or due to minute
    quantities that may occur naturally in the environment. Routine air
    samples are collected on a daily basis and more frequently if
    necessary. To date, BioWatch has analyzed well over half a million
    samples. Several hundred specialized air sampling devices, developed by
    the Department, have been placed at key locations nationwide. The air
    samplers are supported by the infrastructure set up by the
    Environmental Protection Agency's (EPA's) Air Quality Monitoring
    Network sites in partnership with State, local and tribal environmental
    agencies. Additional partners in the program include the Centers for
    Disease Control and Prevention (CDC) and the Department of Energy (DOE)
    National Laboratories. The CDC provides technical expertise through its
    Laboratory Response Network on the laboratory analysis methods and
    serves as the liaison for laboratory analyses with State health
    departments. The DOE National Laboratories, specifically Los Alamos and
    Lawrence Livermore National Laboratories, provide technical expertise
    in biological sampling systems, laboratory analysis, and training
    assistance to State and local agencies.
        Question. If the requested increase in funding is provided, will
    the monitoring be expanded to other cities that are currently being
    monitored or just in these high-threat areas? What about other high-
    threat areas designated under the Office for Domestic Preparedness
    grant programs?
        Answer. The current planning calls for significantly increasing the
    number of air samplers in the top ten high-threat BioWatch cities only.
    Given availability of funds some modest addition of other cities may be
    possible in the future.
        The Science and Technology (S&T) Directorate coordinates with the
    Office for Domestic Preparedness (ODP) to insure integration of
    BioWatch capability with cities listed on the Urban Area Security
    Initiative (UASI). The DHS S&T BioWatch Program fully funds the
    installation, operation, and sustainment of the BioWatch system in each
    city. The ODP grants program is complimentary to BioWatch and funds
    first responder initiatives and other local high priority requirements.
        Question. What promising new advances do you anticipate with the
    requested increase in funding for the acceleration of research and
    development on next generation environmental monitoring systems?
        Answer. Accelerated research and development on next generation
    detection systems fall into two categories: (1) outdoor wide area
    environmental monitoring (i.e., BioWatch replacement) and (2) indoor
    facility protection. Research and Development (R&D) programs for the
    wide area environmental monitoring focus on autonomous networked
    detectors. This is a self-contained on-site collection and analysis
    system. To address indoor facility protection the R&D plan calls for
    research to develop Rapid Identifiers--portable highly sensitive
    bioagent detectors with very low false alarm rates.

               COUNTER MAN PORTABLE AIR DEFENSE SYSTEMS (MANPADS)

        Question. The Science and Technology Directorate is currently in
    the early stages of a 2-year, $120 million program to develop
    countermeasures to protect against the threat of shoulder-fired
    missiles on civilian commercial aviation.
        What progress is being made by the three teams selected for the
    Counter-MANPAD Program, and is the first phase on schedule to be
    completed this summer?
        Answer. In early October, 2003, the Department of Homeland
    Security's Science and Technology Directorate released a solicitation
    announcing a ``call for proposals'' to address this potential threat.
    The solicitation is the first step in the Department's two-phase
    systems development and demonstration program for anti-missile devices
    for commercial aircraft.
        Phase I began in January, 2004, with the selection of three
    contractors--BAE Systems, Northrop Grumman, and United Airlines. Phase
    I of the program will provide a detailed design and an analysis of the
    economic, manufacturing, operational, and maintenance issues needed to
    support a system that will be effective in the commercial aviation
    environment. This phase will last approximately 6 months and will end
    in the selection of one or two contractors moving on to the next phase.
        The Counter-MANPADS program is on track. The DHS Special Project
    Office (SPO) conducted meetings with all three contractors in late
    January, 2004, and early February, 2004, to establish firm direction
    and expectations. The SPO completed System Requirements Reviews with
    all three contractors by March 18, 2004. An Interim Design Review will
    be conducted in early May, 2004. These reviews establish a firm
    baseline of requirements against which the contractors can apply their
    designs.
        Phase I will conclude with a Preliminary Design Review in July,
    2004, at which time the DHS will select one or two of the initial three
    contractors to proceed into Phase II.
        Phase II will include development of prototypes, integration onto
    commercial aircraft, and demonstrations of system operation and
    performance. These prototypes will also be subjected to a rigorous test
    and evaluation process. Phase II will last approximately 12-18 months
    followed by a recommendation to the Administration and Congress.
        Question. What obstacles do you face in safely applying
    technologies developed for and currently in use on military aircraft
    and adapting a countermeasure system to operate in the environments of
    civilian aircraft?
        Answer. Technologies developed for military or other specialized
    purposes are currently incompatible with commercial air fleet
    operations. Although underlying military technologies will be
    leveraged, the systems must be adapted to meet commercial operational
    conditions and environments.
        Military missile countermeasures exist in various stages of
    development and initial fielding. However, these technologies are
    generally utilized by military and Heads-of-State aircraft that have
    the operations and maintenance infrastructure to support such systems.
        While it is conceivable that existing military countermeasures
    units could be re-engineered for civilian aircraft use, many technical
    and operational tradeoffs have not been previously performed to address
    risks of such approach. For example, there is an established military
    logistics infrastructure that serves airborne countermeasure equipment,
    spanning functions from pilot training and routine maintenance to spare
    parts and depot repair. A similar infrastructure would be costly and
    time-consuming to replicate in the commercial airline industry.
        It would be premature to integrate currently available military
    countermeasures equipment aboard civilian aircraft due to numerous
    issues concerning aircraft modification and certification, maintenance
    and supportability, and operational employment. The current Counter-
    MANPADS Program aims to resolve such issues and to provide alternatives
    to the Administration for a decision on equipping commercial aircraft
    with Counter-MANPADS capabilities.
        Additional details can be provided if desired in accordance with
    the appropriate security for the information.
        Question. Is it feasible to accelerate the Counter-MANPAD Program
    in order to make the technology available at an earlier date, or is the
    timeline proposed the safest and most cost-efficient method?
        Answer. Given the challenges of migrating Department of Defense
    (DOD) technology into the commercial aviation environment, the DHS
    program is the most cost-efficient approach to implementing an
    affordable system. The program is an aggressive 24-month analysis,
    prototype demonstration and testing program. At the conclusion, the
    Department of Homeland Security will provide the Administration and
    Congress with a recommendation for the most viable solution to
    integrate Counter-MANPADS technology into commercial air fleet
    operations.

                                 CYBER SECURITY

        Question. The Science and Technology Directorate serves a role in
    the Nation's cyber security efforts by addressing cyber threat
    characterization, cyber threat detection, and cyber threat origination.
        With the large increase provided to the Science and Technology
    Directorate by Congress for cyber security research and development,
    what advances can we expect during this fiscal year?
        Answer. The funding increase provided by Congress is enabling the
    Science and Technology (S&T) Directorate to undertake cyber security
    programs that would not have been possible otherwise. As fiscal year
    2004 is the first complete fiscal year of the Department of Homeland
    Security's existence, funding investments this fiscal year emphasize
    infrastructure and foundational needs associated with cyber security.
    Because such needs are generally not associated with short-term
    problems, most of these investments will not result in deployable
    advances in the same year in which efforts are undertaken. However,
    several key areas are being addressed and are briefly described in the
    following text.
        In order to address infrastructure needs identified in the National
    Strategy to Secure Cyberspace, the Cyber Security R&D Portfolio in the
    S&T Directorate has initiated activities aimed at securing some of the
    key basic communication protocols on which the Internet relies, but
    which are presently vulnerable to cyber attacks. A program focused on
    the domain name infrastructure is working to advance the diffusion and
    use of the Secure Domain Name System (DNSSEC) protocol as a replacement
    for the traditional domain name infrastructure. A second program aimed
    at secure routing infrastructure is working to address vulnerabilities
    in Border Gateway Protocol (BGP), the protocol associated with the
    Internet's underlying routing infrastructure.
        A second infrastructure need identified in the National Strategy to
    Secure Cyberspace involves the need for improving the security of
    process control systems, such as supervisory control and data
    acquisition (SCADA) systems and digital control systems (DCS). The
    Cyber Security Portfolio is coordinating planning for these areas with
    the Critical Infrastructure Protection Portfolio. These portfolios
    expect to initiate joint activities in this area later this fiscal
    year.
        The S&T Directorate is also working to provide foundations for
    enhancing the capability of a variety of cyber security research
    communities. The Cyber Security R&D Portfolio is co-funding two multi-
    university test bed projects with the National Science Foundation
    (NSF). The first is a test bed project focused on creating a large-
    scale physical test bed network to support testing activities, and the
    second test bed project focused on developing a testing framework and
    conducting experiments on the physical test bed. These activities will
    result in the ability to conduct attacks, develop an understanding of
    those attacks, and test existing and new technological cyber security
    concepts, all in a large-scale operational network environment that is
    kept isolated from the ``public'' Internet.
        A separate effort aimed at supporting cyber security research and
    development communities is a program that is working to develop large-
    scale data sets for cyber security testing. This will address the need
    that researchers and operational users have for realistic data that can
    be used to test the capabilities of current and emerging cyber security
    technologies. Although the S&T Directorate does not expect to play a
    role in the area of testing, evaluating, or certifying commercial
    technologies, the general approach to constructing and making available
    data sets for testing have the potential for secondary benefits by
    catalyzing the emergence of commercial testing services provided by and
    for the private sector.
        Another area of emphasis is the area of economic assessment. This
    activity is focused on two important priorities. The first is
    developing a general model for assessing the economic impact of cyber
    events and attacks. We do not believe that widely touted figures (such
    as $38 billion for a single Internet worm attack) are realistic
    estimates of cost associated with those attacks. Unrealistic figures do
    the private sector a disservice because they do not allow people to
    make reasonable assessments of their security needs and associated
    investment requirements. The second area of interest is the development
    of tailored business cases aimed at different types of stakeholder
    communities. General awareness campaigns aimed at widespread
    improvements in cyber security have not been as successful as one would
    like. We believe that one of the reasons for this is that the rationale
    for supporting cyber security investments needs to be tailored to
    different types of stakeholder perspectives (large enterprises,
    critical infrastructure sector company, small businesses, home users,
    etc.). It is our hope that such tailored business cases will provide
    better rationale for technology investments both among today's
    commercial cyber security technologies, as well as those of the future.
        The activities described above fit into a coherent plan for long
    term cyber security needs. It is our hope that the test bed/testing
    framework projects and the program focused on large-scale data sets
    will provide insights to support the development of cyber security
    metrics, although additional work in this area is expected to emerge
    from NSF-funded basic research programs. In the long term, the general
    areas of cyber security metrics and economic assessment models will
    provide two key components in developing a foundation for cyber
    security risk assessment, and risk-based decision-making in this field.
        Although the emphasis of fiscal year 2004 activities is on
    infrastructure and foundational needs, this is not to the exclusion of
    other activities. We do have plans for a number of other focused
    activities, including conducting a pilot test of new-generation
    intrusion detection technology with participation from the banking and
    finance sector, and holding a workshop in the area of government needs
    for wireless security to gather input for future R&D activities. In
    fiscal year 2005, with the infrastructure and foundational programs
    already in motion, we expect to expand our activities aimed at more
    specific cyber security technology R&D needs.
        Question. How will the Science and Technology Directorate
    coordinate its activities with the Information Analysis and
    Infrastructure Protection Directorate?
        Answer. The Director of Cyber Security R&D in the S&T Directorate
    is working closely with counterparts in the Information Analysis and
    Infrastructure Protection (IAIP) Directorate to coordinate the
    Directorates' relevant activities in the important area of cyber
    security. The two components of IAIP that S&T has been working with are
    the National Cyber Security Division (working with the Director of the
    Division and other senior staff members) and the National
    Communications System (working with the Chief of the Technology and
    Programs Division and other senior staff members).
        Interactions between the two Directorates include an ongoing series
    of meetings between senior-level technical managers to provide a bi-
    directional flow of information between the organizations as well as
    coordination of technical activities. These meetings are aimed at
    ensuring that DHS operational requirements feed into S&T programs, and
    to help identify paths for diffusion of technology back out to end
    users, as outcomes of these programs begin to emerge. On a more ad hoc
    basis, the S&T and IAIP Directorates exchange invitations to attend
    meetings or workshops when they involve areas of common interest.
        The IAIP Directorate has been developing a written document to
    identify its S&T requirements, and expects to provide this document to
    the S&T Directorate upon its finalization. In the longer term, a
    Science and Technology Requirements Council (SRC) is being established
    within DHS to provide a more formal avenue for IAIP and other DHS
    components to communicate requirements to the S&T Directorate across
    all of the technology portfolios.
        Question. Have other agencies within the Department of Homeland
    Security, such as the Secret Service, the Coast Guard, and the
    Transportation Security Administration, begun to outline their cyber
    security requirements?
        Answer. The Director of Cyber Security R&D has been informed of
    several information technology-related requirements related to the
    Secret Service's mission via IAIP and via the Secret Service Portfolio
    Manager in the S&T Directorate. While related to information
    technology, several of these requirements have been identified as
    having a law enforcement component being outside of the scope of cyber
    security.
        The S&T Directorate has not been approached by the Coast Guard or
    the Transportation Security Administration (TSA) regarding their cyber
    security requirements. We have had discussions with the Federal
    Aviation Administration regarding their cyber security R&D priorities,
    which are focused on securing the aviation infrastructure (e.g., air
    traffic control networks), in contrast to TSA's focus on passenger and
    cargo security.

                    HOMELAND SECURITY CENTERS OF EXCELLENCE

        Question. The Nation's universities have begun to join the
    Department of Homeland Security to combat terrorism with the selection
    in December of the first Homeland Security Center of Excellence which
    will focus on the risk analysis related to the economic consequences of
    terrorist threats and events. The process of selecting the next two
    Homeland Security Centers of Excellence to focus on agro-terrorism is
    currently in progress.
        How many additional Homeland Security Centers of Excellence do you
    envision with the $69 million provided for fiscal year 2004 and with
    the $30 million requested in the President's budget to accompany the
    three mentioned?
        Answer. Fiscal year 2004 funding for University Programs will
    include approximately $10 million for the DHS Scholars and Fellows
    Program, with the balance dedicated to University-based Homeland
    Security (HS) Centers. In addition to the risk analysis and agro-
    terrorism centers referenced in your question, we anticipate two more
    solicitations for University-based Homeland Security Centers this
    fiscal year.
        Question. How will the Science and Technology Directorate
    coordinate the Homeland Security Centers of Excellence research and
    findings among each participating university?
        Answer. Lead universities are required to develop a management plan
    that demonstrates that partners will be communicating and reporting
    results and findings on a regular basis. DHS requires regular written
    reports and assigns a program manager to each HS Center of Excellence.
    Additionally, lead universities are required to form Science Advisory
    Panels, to conduct progress meetings with their partners, and to
    participate in review meetings with DHS senior managers. As new HS
    Centers are added, DHS envisions a system of centers that it will
    coordinate. Findings from these centers will be coordinated and
    consolidated by DHS.

                           BIOLOGICAL COUNTERMEASURES

        Question. In addition to the national biosurveillance initiative
    proposed in the President's budget in the biological countermeasures
    portfolio, additional funding is requested for infrastructure
    improvements at the Plum Island Animal Disease Center.
        How is the Department of Homeland Security currently working with
    the United States Department of Agriculture to coordinate research
    being carried out in regard to biological diseases?
        What countermeasures are being prioritized for agro-bioterrorism?
        As this committee makes recommendations to fund infrastructure
    improvements at the Department's research facilities, what intentions
    do you see for the long-term use of Plum Island as part of Science and
    Technology's National BioDefense Analysis and Countermeasures Center?
        Answer. DHS is totally committed to enhancing the Nation's
    agricultural security by complementing the mission of United States
    Department of Agriculture (USDA) and Food and Drug Administration
    (FDA), and bringing a new sense for urgency and investments to enhance
    the Nation's capability to anticipate, prevent, detect, respond to, and
    recover from the intentional introduction of foreign animal disease,
    especially scenarios of high-consequence. As defined in Homeland
    Security Presidential Directive-7 (HSPD-7) and HSPD-9, the Secretary of
    Homeland Security is responsible for coordinating the overall national
    effort to enhance the protection of the critical infrastructure and key
    resources of the United States, including the defense of agriculture
    and food.
        Agriculture and food security are important priorities for DHS, as
    are its working relationships and interactions with key sector-specific
    agencies. DHS utilizes high-consequence reference scenarios for
    strategic planning for its programs and activities on biological and
    chemical countermeasures and these areas are most relevant to
    protecting the agriculture and food sectors. DHS works closely with the
    respective sector-specific agencies in planning and execution of its
    R&D programs for each scenario. Of seven scenarios currently under
    study, two of the four biological scenarios concern agriculture and
    food security: foreign animal disease (with an initial focus on foot-
    and-mouth disease), and bulk food contamination. We will be working
    extensively with the USDA on response to those scenarios.
        A Joint DHS and USDA Working Group on Agricultural Biosecurity has
    developed a partnership and national strategy to provide the best
    possible protection against the intentional or accidental introduction
    of a foreign animal disease. The strategy builds on the strengths of
    each agency to develop comprehensive preparedness and response
    capabilities.
        USDA's Agricultural Research Service (ARS) has traditionally
    excelled in basic and fundamental science and early disease discovery
    research. USDA's Animal and Plant Health Inspection Service (APHIS) has
    provided diagnostic services for a wide range of foreign animal
    diseases. In the partnership strategy, USDA will continue its basic and
    early discovery work in the areas of foot-and-mouth disease and other
    high priority foreign and emerging diseases, diagnostic development,
    and maintenance of the vaccine bank.
        DHS's program at Plum Island Animal Disease Center will focus on
    strengthening the Nation's ability to predict and respond to the
    intentional introduction of a foreign animal disease into U.S.
    agriculture. DHS is focusing its efforts on:
      --Advanced development which evaluates the efficacy of vaccines and
            therapeutics (antivirals) derived from ARS's discovery work and
            moves them into readiness for application in the event of an
            outbreak;
      --Agricultural agent bioforensic analysis capability to support
            attribution, working in conjunction with APHIS's diagnostic
            laboratory and law enforcement agencies;
      --Disease assessment capability to include risk, threat assessment,
            and epidemiologic resources to augment knowledge about specific
            strains of foreign animal diseases for use in decision making
            and predictive disease modeling; and
      --Supporting the functions of the core scientific units such as
            pathology, microscopy, sequencing, animal studies, strain
            repositories, and bioinformatics.
        The combined programs of DHS and USDA at Plum Island Animal Disease
    Center will enhance the Nation's defense by building on the strengths
    of each agency to increase capacities for both research and diagnostic
    technology development.
        As part of DHS's extensive commitment to agricultural security, it
    is also establishing two University Homeland Security Centers in this
    area: one in foreign animal and zoonotic diseases and one in post-
    harvest food security. These new HS Centers were awarded to Texas A&M
    University and the University of Minnesota respectively. Additionally,
    DHS is coordinating with USDA on a review team for high-consequence
    reference scenarios for strategic planning for DHS's programs and
    activities on biological and chemical countermeasures. DHS is also
    conducting end-to-end system studies to help define the requirements
    for detection and surveillance for agricultural outbreaks and for the
    protection of critical nodes of high consequence in the food production
    chain.

                    DEPARTMENT-WIDE RESEARCH AND DEVELOPMENT

        Question. Currently, Science and Technology provides mission
    support for several agencies within the Department of Homeland Security
    to coordinate research and development throughout the Department to
    prevent redundancies and to provide overall management and oversight of
    ongoing research. The President's fiscal year 2005 budget proposes
    further consolidation of research and development within Science and
    Technology.
        How do you feel the consolidation of research and development of
    nearly all agencies in the Department of Homeland Security into Science
    and Technology will provide for better coordination of research and
    more efficient use of the funds provided?
        Answer. Consolidation of the research and development functions of
    the Department's components will significantly improve the Department's
    overall ability to meet its mission. With consolidation, we can ensure
    that operational end-user requirements and needs are being met by the
    best science and technology that can be brought to bear on the problem,
    whether that expertise comes from internal or external sources. We will
    enhance our ability to avoid duplication of effort in the R&D areas,
    and we fully expect to find synergies develop: what is created to meet
    the requirements of one component may be able to be fielded to support
    the needs--stated or not yet recognized--of another.
        Question. What examples can be given of different agencies
    benefiting from another agency's research that can be attributed to the
    centralization of these efforts?
        Answer. The Department's consolidation process has truly just
    begun. Our experience to date has been in supporting other components
    of DHS at the portfolio level. We have staff in the S&T Directorate who
    are liaisons with other DHS components; specifically the Border and
    Transportation Security Directorate, the United States Coast Guard, the
    Emergency Preparedness and Response Directorate, the United States
    Secret Service, and the Information Analysis and Infrastructure
    Protection Directorate. These liaisons bring forward the requirements
    from these other components, which allows us to factor their needs into
    the S&T Directorate's RDT&E planning and budgeting and they also serve
    as a communication link at the portfolio level.
        The consolidation of the Standards efforts earlier in DHS has
    already resulted in a more effective and efficient process to identify
    and implement standards relevant to the entire DHS mission. The results
    to date include:
      --Created initial standards guidelines, with formal standards nearing
            completion, for radiation pagers, hand-held radiation dosimetry
            instruments, radioisotope identifiers and radiation portal
            monitors. These standards were developed under the auspices of
            the American National Standards Institute's Accredited American
            Standards Committee on Radiation Instrumentation.
      --Adopted its first set of standards regarding personal protective
            equipment developed to protect first responders against
            chemical, biological, radiological and nuclear incidents. These
            standards, which will assist State and local procurement
            officials and manufacturers, are intended to provide emergency
            personnel with the best available protective gear. These
            standards result from an ongoing collaboration with the Office
            of Law Enforcement Standards at the National Institute of
            Standards and Technology.
      --Published guidelines for interoperable communications gear. Common
            grant guidance has been developed and incorporated in the
            public safety wireless interoperability grant programs of both
            the Department of Justice and the Department of Homeland
            Security;
      --Launched the SAFETY Act process for evaluating anti-terrorism
            technologies for potential liability limits.
        Question. How does the Transportation Security Administration's
    laboratory coordinate its efforts with Science and Technology, and,
    more specifically, the High Explosives Countermeasures portfolio, and
    do you anticipate the consolidation of the Transportation Security
    Administration's research and development into Science and Technology?
        Answer. For fiscal year 2004 the S&T Explosives Countermeasures
    Portfolio has initiated research, development, testing and evaluation
    (RDT&E) to counter the explosives threat to the general population and
    to critical infrastructure posed by suicide bombers and vehicle bombs,
    respectively. The Transportation Security Administration (TSA) is
    conducting RDT&E to counter the explosives threat to the transportation
    sector, including land and maritime transport as well as civil
    aviation. S&T and TSA keep each other aware of activities being
    performed; thus, redundancy is minimized. The activities are currently
    not coordinated, however, and priorities are set independently.
    Information exchange between the S&T Explosives Portfolio and the TSA
    laboratory is coordinated through the TSA office of the Chief
    Technology Office. Each group calls upon the expertise of the other
    when warranted, including participation in selected project reviews and
    advisory panels It is anticipated that the RDT&E activities currently
    conducted within TSA will be consolidated within Science and Technology
    commencing in fiscal year 2005 following administrative actions and
    agreements that are in progress. Program planning documents for the
    Explosives Countermeasures Portfolio reflect an integration of current
    S&T and TSA mission areas, priorities, and funding profiles.
        Question. How does Science and Technology prioritize research
    across all Departmental agencies?
        Answer. The Science and Technology Directorate prioritizes its
    research and development efforts based on the directives,
    recommendations and suggestions from many sources, including:
      --Homeland Security Act of 2002;
      --The fiscal year 2004 Congressional Appropriations for the
            Department of Homeland Security;
      --President Bush's National Strategy for Homeland Security, the
            National Strategy for the Physical Protection of Critical
            Infrastructure and Key Assets, the National Strategy to Combat
            Weapons of Mass Destruction, the National Strategy to Secure
            Cyberspace, and the National Security Strategy;
      --President Bush's nine Homeland Security Presidential Directives;
      --Office of Management and Budget's 2003 Report on Combating
            Terrorism;
      --Current threat assessments as understood by the Intelligence
            Community;
      --Requirements identified by other Department components;
      --Expert understanding of enemy capabilities that exist today or that
            can be expected to appear in the future; and
      --The report from the National Academy of Science on ``Making the
            Nation Safer: The Role of Science and Technology in Countering
            Terrorism,'' and the reports from the Gilmore, Bremer and Hart-
            Rudman Committees.
        Identifying and integrating the information contained in these
    sources has not been a small task, but the result, coupled with expert
    evaluation and judgment by our scientific staff, is the basis for
    determining the research and development needed to meet our mission
    requirements. As consolidation continues to occur, these same sources
    will be used to prioritize requirements and needs.
        We will continue to improve our ability to garner customer
    requirements through the newly-formed Science and Technology
    Requirements Council (SRC). The SRC will vet RDT&E requirements from
    the other components of the Department and has Assistant Secretary
    level representation from those components.

         INTERAGENCY COORDINATION OF HOMELAND SECURITY RESEARCH EFFORTS

        Question. What type of coordination is occurring with other
    Departments in their research and development efforts, and how do you
    plan to expand this coordination in the future?
        Answer. The Department of Homeland Security fully recognizes that
    many organizations contribute to the science and technology base needed
    to enhance the nation's capabilities to thwart terrorist acts and to
    fully support the conventional missions of the operational components
    of the Department. Congress recognized the importance of the research
    and development being conducted by numerous Federal departments and
    agencies, and in the Homeland Security Act of 2002, directed the Under
    Secretary of Science and Technology to coordinate the Federal
    Government's civilian efforts to identify and develop countermeasures
    to current and emerging threats.
        We take this responsibility very seriously.
        We have begun this coordination process by evaluating and producing
    a report on the research, development, testing, and evaluation work
    that was being conducted within the Department of Homeland Security but
    was not already under the direct cognizance of the Science and
    Technology Directorate. Where it is appropriate, the Science and
    Technology Directorate will absorb these R&D functions. In other cases,
    the Science and Technology Directorate will provide appropriate input,
    guidance, and oversight of these R&D programs.
        We are now working to identify gaps in homeland security programs
    across all relevant Federal Departments and agencies. We are
    participating in--and in some cases, leading--committees,
    subcommittees, and working groups of the National Science and
    Technology Council (NSTC). Through formal and informal conversations at
    NSTC meetings, gaps are being identified and are starting to be
    addressed.
        In addition, staff from the S&T Directorate are actively involved
    with the Counterproliferation Technology Coordinating Committee (CTCC).
    The CTCC's role is to look across the U.S. Government to identify
    counterproliferation activites, identify gaps and shortfalls, and make
    recommendations to address the shortfalls. Many of the technologies
    relevant to Counterprolifertion also are relevant to Homeland Security
    needs. The CTCC is co-chaired by the National Security Council,
    Homeland Security Council and Office of Science and Technology Policy.
        The Office of Management and Budget (OMB) gives us budgetary
    direction and develops a yearly report on Combating Terrorism. This
    document is one of the sources cited above as guidance for program
    prioritization. We have frequent interactions with OMB for guidance in
    budgeting in accordance with identified priorities.
        Question. The Office of Science and Technology Policy (OSTP) is one
    of our most important connections in the Administration. Our personnel
    meet with OSTP staff frequently on issues of interest to both groups.
    Most importantly, OSTP runs the National Science and Technology Council
    and its committees, subcommittees and working groups as mentioned
    above. These groups are instrumental in helping us achieve our goals of
    protecting the Nation and its infrastructure.
        The Homeland Security Council, (HSC) which was stood up in October
    2001, meets frequently to ensure coordination of all homeland security-
    related activities among executive departments and agencies and promote
    the effective development and implementation of all homeland security
    policies.
        Has their been any thought given to creating a multi-agency
    initiative, or working group, perhaps under the auspices of the
    National Science and Technology Council (NSTC), to foster better
    coordination of Homeland Security Research efforts across government
    agencies (e.g. DOD, NIH, NSF, DOE, Transportation, EPA, USDA, Dept. of
    Justice, etc)?
        Answer. As discussed above, the Science and Technology Directorate
    is working with the NSTC and the CTCC to look across the entire Federal
    Government at homeland security-relevant science and technology.

                               RAPID PROTOTYPING

        Question. The Congress made $75 million available for fiscal year
    2004 for the rapid prototyping and deployment of near-term technologies
    for the end-user, whether it is a Customs agent or a first responder,
    to have the best technology and equipment available to combat
    terrorism.
        How do you propose to better streamline the process of working with
    industry to make technology available to the end-user in a more
    expeditious manner than currently available?
        Answer. The Science and Technology Directorate actively promotes a
    close relationship with industry to produce the new, improved
    technologies that emergency responders will purchase. Since March 1,
    2003, there have been four solicitations directly to industry in 63
    high tech areas related to protection, equipment, sensors, and other
    gear for emergency responders, agents, detection and tracking systems.
    Industry sent in more than 4,500 responses to these solicitations. Our
    partner, the interagency Technology Support Working Group (TSWG) is
    awarding $60 millions in contracts now in these areas. Our Office of
    Systems Engineering and Development (SED) is already at work with three
    industry teams on technology for commercial aircraft to counter
    shoulder-fired missiles. The Homeland Security Advanced Research
    Projects Agency (HSARPA) has been able to shorten the time required for
    a complete, multimillion dollar competitive solicitation to just 120
    days. HSARPA is also using ``industry-friendly'' Other Transactions for
    Research and Prototype contracting authority permitted by the
    authorizing legislation to speed award of contracts to companies that
    have not done business with the government before.
        Question. Of the industry response to the Department's request for
    proposals, what technologies have proved to be the most beneficial to
    homeland security?
        Answer. DHS S&T is in the earliest stages of research and
    development for almost all of these efforts and it would be premature
    to judge which of these technologies will be most beneficial.
        Question. What future technology solicitations do you anticipate to
    better serve the end-user in protecting the homeland?
        Answer. DHS S&T is actively pursuing additional technology
    solicitations in several areas relevant to protecting the homeland.
    Currently HSARPA has a solicitation entitled ``Detection Systems for
    Radiological and Nuclear Countermeasures'' which is now active and
    industry is responding. Eight other solicitations planned for this
    year:
      --Bioinformatics and Assay Development Program
      --Threat Vulnerability, Testing, and Assessment
      --Automated Scene Understanding
      --Advanced Container Security Device
      --Bomb Interdiction for Truck and Suicide Threats
      --Biological Warfare Architectures Study (Food & Agriculture)
      --Biological Warfare Decontamination
      --Low Vapor Pressure Chemical Detection System
        Question. Of the funds provided for and the flexibility given to
    Science and Technology for rapid prototyping, how much is provided for
    the Technology Clearinghouse, and how much is provided for the
    Technical Support Working Group?
        Answer. For fiscal year 2004, the Technology Clearing House will
    receive $10.5 million. For fiscal year 2004, DHS S&T provided $30.0
    million to the Technology Support Working Group (TSWG) for Rapid
    Prototyping projects.

                                   STANDARDS

        Question. Congress transferred the development of standards from
    the Office for Domestic Preparedness (ODP) to Science and Technology
    and therefore expects all standards development in the Department to be
    centralized in the Science and Technology Directorate.
        How is Science and Technology coordinating with the National
    Institute of Standards and Technology (NIST) in developing standards
    Department-wide?
        Answer. The standards development work in ODP was managed by the
    NIST Office of Law Enforcement Standards (OLES). There has been a
    smooth transition of this program in fiscal year 2004 as NIST/OLES is
    still managing the program for the Science and Technology Directorate.
    The S&T Directorate is also working with NIST to coordinate development
    of additional standards in other areas, such as biometrics, cyber
    security and detection methods for weapons of mass destruction (WMD).
        Question. How are the State Homeland Security Advisors providing
    input for the end-users in developing standards?
        Answer. The DHS Office of State and Local will provide points of
    contact for specific standards development efforts. Also, the
    Conference of Radiation Control Program Directors (CRCPD) has been
    involved in user requirements for the first set of radiation detector
    standards.
        Question. Do you anticipate Science and Technology will publish a
    ``Consumers Report'' on all technologies and equipment for Federal,
    State, and local users, such as the report that will be published for
    radiation and bioagent detection devices?
        Answer. It is our intention to publish user guides to available
    technologies in something like a ``Consumers Report'' format for
    critical equipment for emergency responders. These guides will address
    personal protective equipment as well as detectors for chemical,
    biological, radiological/nuclear and high explosive agents.

     THE WIRELESS PUBLIC SAFETY INTEROPERABILITY COMMUNICATIONS (SAFECOM)
                                    PROGRAM

        Question. The problem of communications interoperability for first
    responders, so important since September 11th, remains a difficult nut
    to crack. How much will be needed to fund the solution? When will
    technical standards be completed? What should the States and locals do?
    The Science and Technology Directorate plays a lead role for the
    Federal Government for finding the way through all of the technical
    questions. The Wireless Public Safety Interoperability Communications
    Program--known as SAFECOM--is in the Science and Technology
    Directorate. Yet, no funds are directly requested in the Science and
    Technology Directorate budget for this very important program. All of
    the funding comes either from other Federal agencies or from the
    Department-wide Technology appropriations within the Department of
    Homeland Security.
        Answer. There is no simple solution for communications
    interoperability. To ensure that our emergency responders' wireless
    communications are fully interoperable will require years of hard work
    on the part of the Federal Government as well as cooperation from State
    and local entities. The Wireless Public Safety Interoperability
    Communications Program, SAFECOM, is managed by the Department of
    Homeland Security's Science and Technology Directorate, allowing the
    program full access to the scientific expertise and resources needed to
    help our Nation achieve true public safety wireless communications
    interoperability.
        Current estimates of total funding required for complete
    interoperable wireless communications run into the billions of dollars
    when procurement grants are included in these estimates. Full wireless
    communications interoperability is currently estimated to be complete
    by 2023.
        Technical standards are critical to the development of
    interoperable systems. With input from the user community, portions of
    the Association of Public Safety Communications Officers (APCO) Project
    25's existing, but still incomplete, suite of standards have been
    developed. However, adoption has been slow, and standards completed to
    date address only part of the problem.
        SAFECOM will dedicate funding to the implementation of its
    standards plan, calling for a common set of standards, policies, and
    procedures to drive the migration of systems towards advanced,
    interoperable equipment and processes in the future. SAFECOM recognizes
    that the Nation cannot wait for a complete suite of standards. In the
    interim, local and State agencies must make investments that improve
    their communications and interoperability capabilities. To support the
    practitioner community in the short term, SAFECOM will begin a number
    of initiatives to better inform public safety agencies when upgrading
    or replacing current communications systems.
        Question. Should the funding for SAFECOM within the Department of
    Homeland Security be appropriated directly to the Science and
    Technology Directorate?
        Should funding be provided by Science and Technology for research
    being carried out for SAFECOM?
        Should the funding provided by other agencies be permanently
    transferred to the Department of Homeland Security?
        Answer. In an effort to coordinate the various Federal initiatives,
    SAFECOM was established by the Office of Management and Budget (OMB)
    and approved by the President's Management Council (PMC) as a high
    priority electronic government (E-Gov) initiative. As an e-Gov
    initiative, it is appropriate for funding to be provided by the
    partnering agencies that will benefit from the results of the
    initiative.
        Question. The progress being made on setting the technical
    standards for various communications technologies seems to be
    progressing very slowly. Project MESA which will govern broadband
    technology is in its infancy, and Project 25 governing Land Mobile
    Radios has yet to complete even half of the standards necessary. What
    more can be done to ensure the speedy completion of these projects by
    the private industry and public safety community stakeholders?
        Answer. At a strategic planning session in December 2003, public
    safety stakeholders from the local, State, and Federal levels convened
    to determine the most important next steps for the improvement of
    public safety communications and interoperability. These stakeholders
    felt that a process to promote standards is critical. To meet this
    demand, SAFECOM has developed a plan to accelerate the development of
    critical standards for public safety communications and
    interoperability, including the Project 25 suite of standards (P25). As
    mentioned above, SAFECOM will dedicate funding to the implementation of
    its standards plan, calling for a common set of standards, policies,
    and procedures to drive the migration of systems towards advanced,
    interoperable equipment and processes in the future. In addition,
    SAFECOM will fund the testing and evaluation of interim technologies
    that can assist public safety agencies in making existing legacy
    equipment interoperable with other neighboring systems.
                                     ______

                   Questions Submitted by Senator Ted Stevens

        Question. What types of research and development support will the
    Science and Technology Directorate provide to the Coast Guard for its
    non-homeland security missions?
        Answer. The Science and Technology Directorate and United States
    Coast Guard (USCG) are in the midst of preparing a formal agreement
    that will detail the coordination and funding mechanisms for USCG R&D
    capabilities. The foundation for that agreement will be the
    consolidation of funding requested in the fiscal year 2005 budget. For
    fiscal year 2005, the USCG R&D center facility, personnel and
    maintenance expenses will be funded through S&T in the amount of $13.5
    million. In addition, S&T and the USCG have agreed upon a base level of
    additional project funding in the amount of $5 million that will be
    specifically targeted toward non-security related projects including
    maritime science and research. This funding will be designed to support
    USCG mission-programs such as Marine Environmental Protection, Living
    Marine Resources, Search and Rescue, Aids to Navigation and Marine
    Safety. The specific projects in support of these mission-related
    programs will be prepared annually for S&T concurrence.
        In addition, the USCG will submit security-related research
    requests through S&T for coordination across all portfolios and DHS
    components. The Coast Guard has submitted a maritime security R&D
    portfolio detailing approximately $50 million in vital maritime
    security research initiatives. This portfolio has been validated by S&T
    portfolio managers and will be considered in the development of future
    spending priorities and commitments from S&T.
        Question. Will the Department of Homeland Security develop a
    Homeland Security Center dedicated to energy production security and
    pipeline infrastructure protection?
        Answer. The Department of Energy (DOE) is designated as the lead
    agency for security issues specific to the energy sector (except for
    commercial nuclear power plants, for which DHS and the Nuclear
    Regulatory Commission are designated as responsible lead agencies) in
    the National Strategy for Physical Protection of the Critical
    Infrastructure and Key Assets and in Homeland Security Presidential
    Directive-7 (HSPD-7).
        DHS has the lead for transportation systems security which includes
    pipelines. DHS has overall homeland security responsibility and
    recognizes that the energy sector is especially vital to the quality of
    life and the economy of this Nation. DHS is sponsoring Critical
    Infrastructure Protection research and development programs in the
    energy and pipeline security area with emphasis on Supervisory Control
    and Data Acquisition (SCADA) and electronic control systems. These
    efforts will increase this fiscal year. In addition, DHS asked the
    National Academy of Science to host a workshop to provide DHS with
    advice and guidance on future University-based Homeland Security R&D
    Centers. The results of that workshop did not place energy production
    security and pipeline security infrastructure in the top three areas
    recommended as additional areas for potential University-based Homeland
    Security Centers. This result certainly does not imply these
    infrastructures and their security is are not important, and, as stated
    previously, work is being done to address their security. In addition,
    the Information Analysis and Infrastructure Protection (IAIP)
    Directorate in DHS does work closely with DOE and with the Energy
    Sector owners and operators on operational security issues and the
    Border and Transportation Security (BTS) Directorate in DHS works with
    the Department of Transportation to ensure that the Nation's pipelines
    are safe and secure.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

                         SCIENCE AND TECHNOLOGY FUNDING

        Question. Secretary Ridge, the Department of Homeland Security has
    a significant research budget to develop new technologies to secure the
    United States against terrorist attacks. I know that the Department has
    made significant progress in setting up the mechanisms to allocate
    science and technology funding to industry, universities, and national
    laboratories. This is a vital mission of your Department.
        I understand that the Department is still in the process of
    allocating fiscal year 2003 science and technology funding. What is the
    current time line for completing this allocation of funding?
        Answer. The Science and Technology Directorate has ``execution
    plans'', that is identified scope of work, for all remaining fiscal
    year 2003 funds and fully expects to have all remaining funds allocated
    by the end of fiscal year 2004.
        Question. The Department is now engaged in the allocation of fiscal
    year 2004 science and technology funding. How do you plan to allocate
    fiscal year 2004 funding in a more timely manner?
        Answer. The Department of Homeland Security has existed now for
    just over a year. Like the rest of the Department, the Science and
    Technology Directorate has been working hard to develop effective and
    efficient procedures and policies, including those necessary for
    selection of performers of the work to be done and the subsequent
    contractual processes and allocation of funds. As these procedures get
    established, projects will be awarded and funded in a more timely
    manner. I am pleased to say that in the last 3 months, the Science and
    Technology Directorate has made significant progress in allocating its
    available funding into the hands of those researchers who are
    developing and transitioning the vital technologies and tools to make
    the Nation safer. Both the Under Secretary for Science and Technology
    and I will continue to monitor the status of project selection and
    funding, and expect to see continued progress.
        Question. I note that this year, the Department's budget submission
    is improved over last year as one would expect. Although there are
    security considerations, could you describe your plans to ensure
    transparency in the Department of Homeland Security budget? Both the
    Departments of Defense and Energy make their supporting budget
    documents public. Will you follow suit?
        Answer. The Science and Technology Directorate prepares its annual
    Congressional Justification in an open and unclassified manner and will
    continue to do so as long as programs do not move into the sensitive
    realm. In addition, the Science and Technology Directorate prepares its
    written testimony for the record for each of its budget-related
    hearings in an unclassified document. This written testimony contains
    the supporting documentation for its budget request and becomes
    publicly available.
        Question. One of the biggest challenges in the science and
    technology area has to be coordinating the allocation of funding
    between near-term and applied technology and basic, long-term R&D
    funding.
        What level of coordination is being provided by your office, Mr.
    Secretary, to ensure an appropriate split between near-term and long-
    term R&D?
        Answer. I have delegated the responsibility for determining the
    appropriate split between near-term and long-term research and
    development to the Under Secretary for Science and Technology and he
    keeps me and others informed, although the final responsibility is
    mine. In the approximately 1 year that this Department has been in
    existence, the Science and Technology Directorate has focused its
    initial efforts on near-term development and deployment of technologies
    to improve our Nation's ability to detect and respond to potential
    terrorist acts. However, we recognize that a sustained effort to
    continually add to our knowledge base and our resource base is
    necessary for future developments. Thus, we have invested a portion of
    our resources, including our university programs, toward these
    objectives. The following table indicates the Science and Technology
    Directorate's expenditures in basic research, applied research, and
    development to date, excluding construction funding.

                                   SCIENCE AND TECHNOLOGY DIRECTORATE R&D INVESTMENTS
                                                [In millions of dollars]
    ----------------------------------------------------------------------------------------------------------------
                                                                                        Fiscal year     Fiscal year
                               Fiscal year                              Fiscal year        2004            2005
                                                                       2003 (actual)    (estimated)     (proposed)
    ----------------------------------------------------------------------------------------------------------------
    Basic...........................................................              47             117              80
    Applied.........................................................              59              56             229
    Developmental...................................................             398             608             643
                                                                     -----------------------------------------------
          Total.....................................................             504             781             952
                                                                     -----------------------------------------------
    Percent basic...................................................             9.3            15.0             8.4
    ----------------------------------------------------------------------------------------------------------------

        Our initial expenditures in basic research are heavily weighted by
    our investments in university programs. These university programs will
    not only provide new information relevant to homeland security, but
    will also provide a workforce of people who are cognizant of the needs
    of homeland security, especially in areas of risk analysis, animal-
    related agro-terrorism, bioforensics, cybersecurity, disaster modeling,
    and psychological and behavioral analysis. In addition, the Science and
    Technology Directorate is allocating a portion of its resources to
    high-risk, high-payoff technologies and expects to gradually increase
    its investments in long-term research and development to a level
    appropriate for its mission and the Department.
        Question. What do you envision as the role of the Department of
    Homeland Security in investments in future R&D to meet homeland
    security requirements?
        Answer. At the current time, the Science and Technology Directorate
    is working hard with available funds to fill critical gaps in our
    Nation's ability to prevent, protect against, respond to and recover
    from potential terrorist attacks; however, we are all well aware that
    it is only with a strong investment in long-term research that we can
    we feel confident we are maintaining a robust pipeline of homeland
    security technologies to keep us safe for the decades to come.
    Successful businesses reinvest 10-15 percent of their total budget in
    research and development; the Science and Technology Directorate will
    strive in future years to invest a similarly significant portion of its
    resources into long-term research.

                           INTERAGENCY COLLABORATION

        Question. Mr. Secretary, the Department of Homeland Security
    combines the programs and personnel for many Federal agencies. Creating
    a culture as one department is a real challenge, but there are
    capabilities throughout the Federal Government that can assist your
    Department in meeting homeland security threats.
        I would encourage the Department to develop strong positive
    relationships with other Federal departments and agencies where there
    is opportunity for collaboration and cooperation to make your job
    easier.
        Is it correct that your Department has worked with both the
    Department of Energy and the National Nuclear Security Agency (NNSA) as
    it develops its programs to meet homeland security threats?
        Answer. The Department of Homeland Security has worked very closely
    with the Department of Energy (DOE) and NNSA from the very early stages
    of the development of the Science and Technology (S&T) program. The DOE
    laboratories provided extensive technical expertise and advise
    regarding the S&T program development.
        Question. How would you characterize these interactions?
        Answer. The Department's interactions with DOE and NNSA have been
    very positive. The Department of Homeland Security's (DHS's) S&T staff
    has an open communication relationship with DOE senior managers as well
    as with the DOE field personnel. Since some of the S&T staff came from
    DOE, there are close ties and good relationships that facilitate
    developing the processes of how DOE and DHS work together. When issues
    arise, they are quickly elevated so that communication occurs between
    the appropriate parties in both Departments and a resolution achieved.
        Question. What potential do you see for future collaborations?
        Answer. The Department of Homeland Security fully expects to
    continue and enhance its collaborations with the DOE and NNSA, as well
    as other Federal agencies conducting work of relevance to homeland
    security. For example, the S&T Directorate is committed to utilizing
    the extensive capabilities of all DOE laboratories and to engage them
    in all aspects of our research, development, testing and evaluation
    (RDT&E) program. The Directorate's Office of Research and Development
    is developing an enduring RDT&E capability through stewardship of the
    homeland security complex. To meet the Federal stewardship goal, the
    DOE laboratories will play a significant role in assisting in the
    strategic planning of the threat-based programs such as radiological/
    nuclear and biological countermeasures programs. The DOE laboratories
    also have significant existing capabilities and facilities for
    addressing terrorist threats, thus DHS will contribute support for some
    existing DOE facilities and reach-back into these unique capabilities.
    In addition, the DHS University Scholars and Fellows program is working
    with the DOE laboratories to place students with DOE mentors.
        Question. The science and technology directorate at the Department
    has had discussions with the DOE national laboratories in such areas as
    radiological and nuclear and bioterrorist threats. The labs have
    significant capabilities to assist the Department of Homeland Security.
    Do you envision these collaborations continuing? Are there any barriers
    to such activities? If so, can Congress assist in addressing these
    issues?
        Answer. The Department's Science and Technology Directorate will
    continue to utilize the DOE laboratories to address S&T requirements
    including key threat areas such as radiological, nuclear and biological
    countermeasures. Collaborations between DHS and DOE have been very
    successful to date, and the Science and Technology Directorate plans to
    continue these collaborations well into the future. There are currently
    no barriers to these collaborations. If circumstances change, the
    Department will bring this to the attention of Congress.
                                     ______

             Questions Submitted by Senator Ben Nighthorse Campbell

        Question. Over the last couple of years, I have worked to provide
    funding to the Federal Air Marshals (FAMs) for an in-flight
    communications system. I believe that this system would provide the
    FAMs with the communications they need to safeguard our airlines and
    the millions of passengers who fly on them each year.
        I know that you are constantly going through reorganizations over
    at DHS and I have learned that the Office of Science and Technology may
    be proceeding to equip only those airlines that already have seatback
    phones with these communications for the FAMs.
        But it is my understanding that many airlines do not have seatback
    phones. How can we ask Americans to fly on these airlines if they don't
    have the same level of security that is being provided to others?
        Answer. Current Status. With reference to ``may be proceeding to
    equip only those airlines that already have seatback phones with these
    communications for the FAMS'', the Federal Air Marshal Service (FAMS)
    currently has access to the commercially available Verizon Airfone
    service, only when FAMs fly on aircraft with such a system installed.
    Recent statistics indicate that this system is installed on
    approximately 40 percent of the aircraft on which FAMs fly. This
    limited access includes voice only, via a tethered handset and does not
    provide for data, wireless, or pre-emption of service during an
    emergency situation. While the FAMS will conduct tests utilizing this
    technology, additional testing will be performed on other developing
    technologies with other service providers.
    Phase I--Commercially Available Field Evaluation
        The Federal Air Marshal Service is on the verge of conducting a
    field evaluation, which will focus on foundational and component
    testing; as well as, evaluation of FAMS applications over a
    commercially available communication system.
        The foundational testing will seek to determine the most
    appropriate wireless communication protocol(s) for the FAMS to use for
    the Air-to-Ground Communication System (AGCS). This test will look at
    IR (infra-red), RFs (radio-frequencies), 802.11x, and Bluetooth
    technologies. The test will evaluate all of the technical and security
    aspects of the protocols, as well as aviation related aspects such as,
    compatibility with aircraft systems. General market trends and
    industry's development of wireless communications protocols will also
    be studied.
        The component testing will seek to evaluate the transmission and
    reception of voice and data across an existing commercially available
    communication system, and measure the ability of the system to handle
    the current FAMS applications--including the Surveillance Detection
    Report and other applications.
    AGCS Strategic Planning
        Additionally, the FAMS has been working in concert with the
    Department of Homeland Security, Science and Technology, to rigorously
    identify the needs, scalability, and interoperability of the future
    AGCS. As a result of joint efforts of DHS S&T and the FAMS, an AGCS
    strategic plan is scheduled to be completed in September 2004.
    AGCS Working Group
        At the request of Congress in HR 108-169, the FAMS is chairing an
    AGCS Working Group to develop a technical implementation plan, as well
    as, develop a business/government partnership for the implementation of
    this system.
        To date, the FAMS have hosted two working group meetings, which
    were attended by: National Aeronautics and Space Administration (NASA),
    Glenn Research Center; Federal Aviation Administration (FAA), NEXCOM
    (Next Generation Communications) and FAA GCNSS (Global Communication,
    Navigation, and Surveillance System); the JPDO (Joint Planning and
    Development Office); U.S. Special Operations Command; U.S. Northern
    Command/NORAD/CONR; United States Air Force; Department of Homeland
    Security; and others.
    Milestones
        January 2003.--Air to Ground Charter signed by Adm. Loy, then TSA
    Administrator.
        Jan-Mar 2003.--FAMs participate in multiple air to ground
    demonstrations.
        September 2003.--FAMS managed services provider selected, work
    begun on air to ground field evaluation.
        November 2003.--Managed services provider issues RFP's for AGCS
    field evaluation.
        December 2003.--RFPs returned, scored--recommendations made.
        April 2004.--FAMS issues AGCS field evaluation final
    recommendation. DHS S&T begins working with FAMS on long-term strategic
    planning. NASA offers strategic alliance with FAMS.
        May-August 2004.--AGCS field evaluation conducted.
        July 2004.-- Aviation and communications industries invited to
    review draft AGCS strategic plan and participate in AGCS Working Group
        September 2004.--AGCS Strategic Plan briefed to Congress
        September 2004.--AGCS Strategic Plan completed.
    Goals to be achieved
      --FAMS finalize contract modifications in order to move forward on
            field-testing and evaluation.
      --Attain FAA approval for FAMS in-flight wireless communications
            protocols.
      --Attain FCC approvals for same, focusing on aviation and broadband
            technologies.
      --Attain Airlines approval and determine investment strategy for in
            cabin-aviation communication (AGCS) system(s).
      --Complete FAMS AGCS strategic plan.
      --Agency review of field evaluation recommendations.
        Program Summary.--The FAMS is evaluating currently installed
    technology for immediate application and use by operational FAMS while
    continuing to pursue a long-term solution to FAMS AGCS needs, which may
    include developing technologies not associated with current in-flight
    communications. This long-term solution is encompassed by the AGCS
    Working Group, law enforcement and aviation communities and promotes
    confidence in our Nation's civil aviation system to detect, deter and
    defeat hostile acts targeting U.S. air carriers, airports, passengers,
    and crews.

                           SMALL BUSINESS CONTRACTING

        Question. As I said in my statement, Colorado is home to a number
    of small companies that have developed cutting edge technologies to
    keep not only us safe, but law enforcement officials and first
    responders safe as well.
        I am just curious as to the number of small companies, those with
    100 or less employees, that you are working with to provide us with
    their technology?
        Answer. The Small Business Innovation Research (SBIR) Program
    defines a small business as one with 500 employees or less. At the time
    of contract award, DHS determines if the winner is a small business
    under this size criterion, as well as checking other criteria of the
    program such as U.S. ownership, location in the United States,
    employment of principal investigator, etc. DHS does not keep records of
    actual company size under 500 employees.
        The first DHS SBIR solicitation requested proposals from small
    businesses in eight topic areas. Altogether, 374 responses were
    received and 66 were selected to enter negotiations for contract award
    in the first Phase. Three of these businesses are located in Colorado.
        Question. What percentage of your procurement dollars is being
    awarded to small businesses?
        Answer. The Small Business Innovation Research (SBIR) program is
    funded at 2.5 percent of extramural R&D funds. This equates to $19.6
    million in fiscal year 2004 for the Small Business Innovation Research
    Program, all with small businesses. In addition, small businesses are
    participants in our open solicitations, such as the one issued last
    fall for Detection Systems for Biological and Chemical Countermeasures.
    Among the 40 winning individual companies (or their teammates) in that
    fully competitive, $76 million solicitation, there were 35 small
    businesses.
        Question. How do you define what is a small company?
        Answer. DHS uses the SBIR definition of 500 employees or less.
        Question. Can you discuss with me where we are with liability
    protections for all contractors?
        Answer. As part of the Homeland Security Act of 2002, Public Law
    107-296, Congress enacted the several liability protections for the
    sellers of anti-terrorism technologies. The Support Anti-terrorism by
    Fostering Effective Technologies Act of 2002 (SAFETY Act) provides
    incentives for the development and deployment of anti-terrorism
    technologies by creating a system of risk and liability management. The
    purpose of the SAFETY Act is to ensure that the threat of liability
    does not deter potential manufacturers or sellers of anti-terrorism
    technologies (ATT) from developing and commercializing technologies
    that could significantly reduce the risks or mitigate the effect of
    large-scale terrorist events. Therefore, the SAFETY Act creates certain
    liability limitations for ``claims arising out of, relating to, or
    resulting from and act of terrorism'' where a qualified anti-terrorism
    technology (QATT) has been deployed. The SAFETY Act does not limit
    liability from harms caused by an anti-terrorism technology when no act
    of terrorism has occurred.
        The definition of a qualified anti-terrorism technology is very
    broad and includes products, equipment, services (including support
    services), devices, or technology (including information technology)
    that is designed, developed, modified, or procured for the specific
    purpose of detecting, identifying, preventing, or deterring act of
    terrorism, or limiting the harm that such acts might otherwise cause.
        Sellers of ATTs may apply for SAFETY Act protection on line at
    www.safetyact.gov, or they may submit their application electronically
    or in hard copy. Each application will be reviewed in accordance with
    the criteria set forth in the SAFETY Act to assess its technical
    capabilities and to determine if SAFETY Act protection is necessary in
    order to deploy the technology more broadly. To date there are 19 full
    applications in various stages of review as well as 61 pre-
    applications. The pre-application process is optional and is designed
    to provide early feedback to the applicant regarding whether the
    technology would be considered for SAFETY Act protection.
                                     ______

                   Questions Submitted by Senator Larry Craig

        Question. I believe that you have heard from Members of Congress
    from Illinois, New York, and Idaho about their concerns in excluding
    DOE national laboratories in those three States from playing on the
    same field as your designated ``intramural'' laboratories. I was under
    the impression that DHS had understood Congress's desire in creating
    your department, that DHS would approach the DOE national labs on a
    level playing field. When visiting with you prior to your confirmation,
    I had felt I had your assurance to that effect.
        I have made clear to you my concerns about the process your office
    used in establishing the intramural/extramural laboratory system. I
    have concerns about the validity of this approach and its outcome for
    both the country and the extramural laboratories. These concerns
    include: The reduced ability of DHS to bring the best talents and
    capabilities to bear on some of our most significant national security
    threats. The practicality and propriety of setting up a system that not
    only encourages, but requires the extramural laboratories to compete
    against industry and universities in order to contribute to the
    solutions of important homeland security challenges. This is of
    particular concern since the work designated for HSARPA and SED is work
    that your staff has already indicated can be performed without unique
    capabilities that exist in the national laboratories. The thin
    reasoning and basis that has been put forward by DHS as a rationale for
    selecting the intramural labs just doesn't appear to hold up.
        Please provide the precise criteria used for selection of
    intramural and extramural labs. Also provide the explanation of why
    Argonne National Lab, Brookhaven National Lab, and Idaho National
    Engineering and Environmental Lab do not meet the criteria for being
    intramural laboratories.
        Answer. The Department of Homeland Security, through Section 309 of
    the Homeland Security Act of 2002, is provided access to the national
    laboratories and sites managed by the Department of Energy to carry out
    the missions of DHS.
        The DHS Science and Technology Directorate, wishing to make the
    best use of each of these laboratories and sites in consonance with
    statute, regulation, and policy, asked laboratories and sites to make a
    decision regarding their desired mode of interaction with the
    Directorate--to participate in S&T's internal strategic planning and
    program development processes, or, if otherwise permissible under
    applicable law, regulation, contract, and DOE policy, to respond to
    certain types of S&T solicitations open to the private sector.
        On March 31, 2004, the following national laboratories and sites
    communicated their decision to Under Secretary McQueary to participate
    in S&T's internal strategic planning and program development processes:
    Argonne National Laboratory, Bechtel Nevada, Brookhaven National
    Laboratory, Idaho National Engineering and Environmental Laboratory,
    Lawrence Livermore National Laboratory, Los Alamos National Laboratory,
    Oak Ridge National Laboratory, Pacific Northwest National Laboratory,
    and the Sandia National Laboratories.
        A consequence communicated to the national laboratory directors in
    advance of their decision is that, as a result of such participation, a
    national laboratory will be ineligible to participate in open
    solicitations to the private sector for a period of 3 years after it
    ceases engagement in the S&T strategic planning and program development
    processes.
        S&T will give the laboratories access to internal DHS strategic
    planning information. DHS policy is that if any non-DHS entity,
    including a national laboratory, receives that kind of information, DHS
    considers that entity to have an ``organizational conflict of
    interest'' that makes the entity ineligible to participate in any
    solicitations open to the private sector issued by S&T.
        Question. Do you think that it is appropriate for national labs to
    be in direct competition with universities and industries for HSARPA
    work?
        The Homeland Security Advanced Research Projects Agency (HSARPA)
    solicitations seek to the maximum extent possible to capture the best
    ideas and solutions. To achieve this end, Broad Agency Announcements
    (BAAs) are used. Under a BAA, teams are not in direct competition; each
    team is judged on the basis of the unique ideas proposed to solve the
    broadly defined technology challenge. DOE Order 481.1B provides the
    guidance DOE uses for the national laboratories regarding participation
    in BAAs with universities and industries.
        The DHS Science and Technology Directorate, wishing to make the
    best use of each of these laboratories and sites in consonance with
    statute, regulation, and policy, asked laboratories and sites to make a
    decision regarding their desired mode of interaction with the
    Directorate--to participate in S&T's internal strategic planning and
    program development processes, or, if otherwise permissible under
    applicable law, regulation, contract, and DOE policy, to respond to
    certain types of S&T solicitations open to the private sector.
        On March 31, 2004, the following national laboratories and sites
    communicated their decision to Under Secretary McQueary to participate
    in S&T's internal strategic planning and program development processes:
    Argonne National Laboratory, Bechtel Nevada, Brookhaven National
    Laboratory, Idaho National Engineering and Environmental Laboratory,
    Lawrence Livermore National Laboratory, Los Alamos National Laboratory,
    Oak Ridge National Laboratory, Pacific Northwest National Laboratory,
    and the Sandia National Laboratories.
        A consequence communicated to the national laboratory directors in
    advance of their decision is that, as a result of such participation, a
    national laboratory will be ineligible to participate in open
    solicitations to the private sector for a period of 3 years after it
    ceases engagement in the S&T strategic planning and program development
    processes.
        Should we assume that cost will not be a primary factor in
    selecting winners for HSARPA and SED contracts? If it is a primary
    factor, do you expect any national laboratories to be able to compete
    on a cost basis?
        Answer. The Homeland Security Advanced Research Projects Agency
    (HSARPA) and the Office of Systems Engineering and Development (SED)
    consider other criteria, such as technical approach, performance
    improvement if successful, value to the DHS user, program management
    strategy, and capabilities of researchers to perform proposed work,
    more important than the total cost of the research. The S&T Directorate
    looks at the total cost of the research to confirm that it is
    reasonable, but it is only a deciding criterion if the costs are too
    high or too low. The eventual cost of the fielded system and its
    operation are frequently considered under the value to DHS user
    criterion; this should differ by technical approach, but not by
    category of proposer.
        Costs can also enter the final evaluation of proposals in a
    determination of ``best overall value to the government.'' Under best
    value, all factors are simultaneously evaluated looking to create out
    of the family of selected proposals the best diversified programmatic
    solution for the government against the total available funding.
        S&T program solicitations seek to the maximum extent possible to
    capture the best ideas and solutions. To achieve this end, Broad Agency
    Announcements (BAAs) are used. Under a BAA, teams are not in direct
    competition; each team is judged on the basis of the unique ideas
    proposed to solve the broadly defined technical challenge.
        Question. Wouldn't it be reasonable to have a system where all of
    your critical R&D requirements were met through competitive processes
    in order to assure access to the broadest array of talent in a cost
    efficient way? Do you believe that this is what Congress intended?
        Answer. DHS recognizes the unique talents at each of the DOE
    national laboratories, and is committed to maximizing opportunities for
    all the DOE laboratories in support of homeland security. We believe
    that by allowing the national laboratories to support S&T either
    through programmatic partnerships or project-based work, maximum
    efficiency in resource utilization may also be achieved.
        S&T conducts full and open competitions for a majority of its
    research, development, testing and evaluation programs through Broad
    Agency Announcements. The Office of Research and Development will
    continue to conduct performance-based work with the national
    laboratories.
        Question. Knowing that Congress debated and rejected proposals for
    folding one or more national labs into DHS when it was creating the new
    department, under what authority does DHS now proceed with this same
    concept, but administratively instead of legislatively?
        Answer. The research, development, testing and evaluation
    capabilities needed to support the missions of the Department of
    Homeland Security are being defined and institutionalized within the
    Department. Support of those needs now and in the future requires the
    establishment and support of an enduring capability that includes
    scientists and engineers who are well-versed in the requirements and
    technologies associated with homeland security, and dedicated to the
    mission of the Department, as well as physical facilities that support
    their efforts. The legislation creating the Department of Homeland
    Security and the Science and Technology Directorate recognized that
    many of these needed capabilities exist within the Department of
    Energy's laboratories and sites and provided for access to them in
    support of the Department's mission.
        The existing DOE laboratories have critical mass and expertise
    across multiple disciplines to perform the necessary threat assessments
    and, thus, to participate in DHS's and the S&T Directorate's internal
    systems and analyses, associated trade studies, and long-range planning
    that will form the basis for the architectures that are ultimately
    developed and deployed to secure the homeland. These scientists will be
    intimately involved in assisting the S&T Directorate in setting
    research goals and requirements and formulating the research and
    development roadmaps.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                               R&D CONSOLIDATION

        Question. The fiscal year 2005 budget request proposes to
    consolidate R&D budgets from the Coast Guard, Emergency Preparedness
    and Response Directorate, and from the Immigration and Customs
    Enforcement bureau. Other research budgets, such as $154 million for
    the Transportation Security Administration were not included in this
    consolidation. What plans are there to consolidate all the Department's
    research budgets within the Science & Technology Directorate? If so,
    what is the timeline for completing the consolidation? What are the
    benefits of consolidating R&D budgets under one Directorate? What
    savings are anticipated by consolidating the Department's research
    budgets under one roof?
        Answer. We have begun the consolidation process by evaluating and
    producing a report on the research, development, testing, and
    evaluation work that was being conducted within the Department of
    Homeland Security but was not already under the direct cognizance of
    the Science and Technology Directorate. Where it is appropriate, the
    Science and Technology Directorate will absorb these R&D functions. In
    other cases, the Science and Technology Directorate will provide
    appropriate input, guidance, and oversight of these R&D programs. We
    expect to have this process completed by the end of fiscal year 2004 in
    accordance with the Congressional directive.
        Consolidation of the research and development functions of the
    Department's components will significantly improve the Department's
    overall ability to meet its mission. With consolidation, we can ensure
    that operational end-user requirements and needs are being met by the
    best science and technology that can be brought to bear on the problem,
    whether that expertise comes from internal or external sources. We will
    be able to enhance our efforts to avoid duplication of effort in the
    R&D areas, and we fully expect to find synergies develop: what is
    created to meet the requirements of one component may be able to be
    fielded to support the needs--stated or not yet recognized--of another.
    The specific cost savings expected will be identified as part of the
    process of R&D consolidation.

                              DETECTION TECHNOLOGY

        Question. When Secretary Ridge testified before the subcommittee in
    February, he said that if a passenger wanted to board a plane with a
    biological weapon, the Department does not currently have the capacity
    to detect it. He said that acquiring such a capability is a top
    priority for the science and technology directorate. How does your
    budget address this issue?
        Answer. The Biological Countermeasures portfolio in the S&T
    Directorate is currently initiating systems studies to better define
    needs and options for detection of a biological agent release aboard an
    aircraft. Detection of a biological pathogen during the passenger
    security screening process remains a difficult problem, but we are also
    investigating potential detection options. It is possible that
    modifications to current technology can provide interim capability
    while the detection efforts described above can provide an improved
    future capability.

                        UNIVERSITY CENTERS OF EXCELLENCE

        Question. In fiscal year 2004, Congress appropriated $68.8 million
    for University programs under the Science and Technology Directorate.
    When Under Secretary McQueary testified on March 2, he said that the 3
    centers would be selected in fiscal year 2004 and the fiscal year 2005
    budget request would be sufficient to maintain three centers. How many
    centers would be selected in fiscal year 2004 and fiscal year 2005 if
    the budget request maintained the current level of funding instead of
    cutting the program by $39 million?
        Answer. In addition to the risk analysis and agro-terrorism centers
    already selected in fiscal year 2004, we anticipate two more
    solicitations for University-based Homeland Security Centers this
    fiscal year. If the fiscal year 2004 level of funding were maintained
    for fiscal year 2005 and beyond, an additional five Centers could be
    selected. SAFECOM
        The budget request for SAFECOM is $22.105 million. The Department's
    budget justification states that this program is a cost-share program
    and anticipates receiving $12.5 million from within DHS and $9.55
    million from other Federal departments. Please provide the specific
    contributions from each DHS component and from each of the other
    Departments contributing to this program.
        Question. How much was anticipated for SAFECOM in fiscal years 2003
    and 2004 versus the amount reimbursed from other agencies? Please
    provide the specific contributions from each DHS component and from
    each of the other Departments contributing to this program.
        On February 23, the Secretary said that ``the Department has
    identified technical specifications for a baseline interoperable
    communication system.'' Please describe these technical specifications
    and how it will benefit first responders. What is the timeline to
    implement these specifications? What is the cost impact of these
    specifications? Will the Department establish a separate funding
    mechanism to assist first responders pay for this short-term solution?
        Answer. The chart below outlines the funding for SAFECOM expected
    for fiscal year 2003 and fiscal year 2004, and the actual amount
    collected by the program in fiscal year 2003. It is the current
    expectation that all fiscal year 2004 funding provided by DHS is from
    the Chief Information Officer's wireless account.

                                 SAFECOM FUNDING
                            [In millions of dollars]
    ------------------------------------------------------------------------
                                              Actual  fiscal    Anticipated
                                                 year 2003      fiscal year
                     Agency                        Funds        2004  Funds
                                                Contributed     Contributed
    ------------------------------------------------------------------------
    USDA....................................           1.431           1.520
    DOD.....................................           3.345           1.770
    DOE.....................................           1.431           1.430
    HHS.....................................           1.431           1.520
    DHS.....................................  ..............          12.520
    DoI.....................................  ..............           2.951
    DoJ.....................................  ..............           4.312
    Treasury................................           9.500  ..............
                                             -------------------------------
          Total.............................          17.138          26.023
    ------------------------------------------------------------------------

        The Department will require certain minimum specifications relating
    to interim interoperable solutions, such as cross-band repeaters and
    patching units. These specifications will allow public safety
    practitioners to clearly articulate what technical requirements must be
    met by vendors of communications equipment so that purchases made in
    the short term are successfully targeted at equipment that meets their
    immediate needs. Since many commercial units are already capable of
    meeting these requirements, the cost of these units should be
    unaffected.
        The Department is still exploring options for funding and will
    release an implementation timeline accordingly.

                               GRANTS & CONTRACTS

        Question. Of the funds appropriated in fiscal year 2004, provide a
    table that shows the number of grants provided, the amount for each
    grant, the recipient, and the purpose. Provide the same information for
    contractual agreements.
        Answer. See table below.

    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                     Type                     Amount                      Project Title/Purpose                                          Performer                             Procurement Agent
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    BAA..................................   $30,000,000  Technical Support Working Group, Rapid Prototyping.....  Multiple Awards Pending................................  Naval System Management
                                                                                                                                                                            Activity
    BAA..................................     6,045,595  Fund for RA 03-01, Detection Systems for Biological and  Multiple Awards Pending................................  Ft. Detrick, USAMRAA
                                                          Chemical Countermeasures (DSBCC), TTA-3 and TTA-5.
    BAA..................................     5,710,000  Scene Understanding (NRL BAA 55-03-02 Artificial         Multiple Awards Pending................................  Navy Research Lab
                                                          Intelligence Technologies & BAA 55-03-05 Advanced
                                                          Intelligence Technologies).
    BAA..................................     5,230,000  Threat Vulnerability, Intelligence and Information       Multiple Awards Pending................................  Navy Research Lab
                                                          Analysis, and Warning Capabilities of DHS (BAA 04-02).
    BAA..................................     6,196,909  Detection Systems for Biological and Chemical            Multiple Awards Pending................................  Ft. Detrick, USAMRAA
                                                          Countermeasures (RA 03-01 TTA-4).
    BAA..................................     2,070,000  Domain Name System Security (DNSSEC) (Air Force          Multiple Awards Pending................................  Air Force Research Lab
                                                          Research Lab/Information Grid System BAA 03-18-IFKA
                                                          Cyber Defensive & Offensive Operations Technology).
    BAA..................................    54,589,000  Funds for BAA 04-01 (Rad/Nuc Countermeasures Systems     Multiple Awards Pending................................  U.S. Navy Space and Air
                                                          Architectures Analysis) and BAA 04-02 (Rad/Nuc                                                                    Warfare Center (SPAWAR)
                                                          Detection Systems),.
    BAA..................................     2,050,000  Large Scale Network Security Test & Evaluation Datasets  Multiple Awards Pending................................  DOI/NBC
                                                          Program (DOI/NBC BAA 03-05-FH).
    BAA..................................    10,000,000  Fund for RA 03-01, Detection Systems for Biological and  Multiple Awards Pending................................  Ft. Detrick, USAMRAA
                                                          Chemical Countermeasures (DSBCC), TTA-5.
    BAA..................................       102,000  Evaluation Plan for BAA 04-02, Detection Systems for     Oak Ridge National Laboratory..........................  DOE
                                                          Radiological and Nuclear Countermeasures (DSRNC)
                                                          HSARPA Review Support.
    BAA..................................     7,000,000  Phase II B Funding for RA 03-01, Detection Systems for   Multiple Awards Pending................................  Ft. Detrick, USAMRAA
                                                          Biological and Chemical Countermeasures (DSBCC) TTA-2.
    BAA..................................       896,600  Live Agent Testing Evaluation (RA 03-01 TTA 3/4/5--      Multiple Awards Pending................................  Ft. Detrick, USAMRAA
                                                          Portable High-Throughput Integrated Laboratory
                                                          Identification System, Lightweight Autonomous Chemical
                                                          Identification System, Autonomous Rapid Facility
                                                          Chemical Agent Monitor).
                                          --------------
          BAA Total......................   129,890,104
                                          ==============
    Contract.............................     6,000,000  Counter MANPADS Development and Demonstration Phase....  Awards Pending.........................................  DHS
    Contract.............................        60,000  Support for Model OT Agreement Analyses................  Logistics Management Institute (LMI)...................  DHS
    Contract.............................     4,678,601  Counter MANPADS Program Support........................  SRS Technologies.......................................  Ft. Detrick, USAMRAA
    Contract.............................       859,873  Operational and Support Staffing for Office of Weapons   ANSER Corp.............................................  DHS
                                                          of Mass Destruction (WMDO).
    Contract.............................       208,750  Enhancing International Travel Security................  Organization for Economic Cooperation and Development..  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
    Contract.............................         5,058  Additional Funding for Goods Used ISO Biowatch.........  VWR International......................................  CoastGuard
    Contract.............................       371,440  Bio Watch Operations Support...........................  Booz Allen Hamilton....................................  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
    Contract.............................        57,120  Unmanned Aerial Vehicle Analysis Support...............  SRA International......................................  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
    Contract.............................        90,000  ORION--GPS Integration.................................  Orion Electronics (Award Pending)......................  Department of Interior,
                                                                                                                                                                            Gov Works
    Contract.............................       900,000  Support of Civil Aviation Security Systems Engineering   Center for Naval Analysis Corporation (CNAC)...........  DHS
                                                          Study.
    Contract.............................       282,951  Programmatic and Technical Management Support to the     SPARTA, Inc............................................  Ft. Detrick, USAMRAA
                                                          Director, ORD.
                                          --------------
          Contract Total.................    13,513,793
                                          ==============
    Grant................................     3,310,826  DHS Scholarship/Fellowship Program.....................  Oak Ridge Institute for Science and Education  (ORISE).  DOE
    Grant................................     4,000,000  University of Southern California--University Programs   University of Southern California......................  DHS/FEMA
                                                          Grant.
                                          --------------
          Grant Total....................     7,310,826
                                          ==============
    RA...................................       270,000  IDA Chemical Hazard Analysis...........................  Institute for Defense Analysis (IDA)...................  DOD Washington
                                                                                                                                                                            Headquarters Service
                                                                                                                                                                            (WHS)
    RA...................................       161,998  South Florida Hawkeye Project fiscal year 2004, BTS....  Coast Guard HQ.........................................  DHS/USCG
    RA...................................     1,131,679  DHS Cyber Security Testbed.............................  UC Berkeley, USC, UC Davis, Penn State, Purdue,  ICIR..  National Science
                                                                                                                                                                            Foundation (NSF)
    RA...................................     2,300,000  South Florida Hawkeye Project fiscal year 2004, BTS....  United States Coast Guard..............................  DHS/USCG
    RA...................................       230,000  Study of Emerging Threats and Evolving Technologies....  Institute for Defense Analysis (IDA)...................  DOD Washington
                                                                                                                                                                            Headquarters Service
                                                                                                                                                                            (WHS)
    RA...................................       390,750  Recognizing Emotion In Speech..........................  Columbia Univ..........................................  National Science
                                                                                                                                                                            Foundation (NSF)
    RA...................................       382,500  Automated Intent Determination (AutoID)................  Dr Mark Adkins, Univ of Arizona........................  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
    RA...................................       624,196  VACIS Image Processing and Projection (IPP)............  SAIC...................................................  DHS
    RA...................................        64,600  Perimeter Security System..............................  NAVSEA.................................................  NAVSEA
    RA...................................       500,000  Border Gateway Protocol (BGP) Security Analysis and      National Institute of Standards and Technology  (NIST).  National Institute of
                                                          Evaluation of Large Scale BGP Attacks.                                                                            Standards and Technology
                                                                                                                                                                            (NIST)
    RA...................................     2,500,000  Surveillance--RODS Decision Enhancements for The         RODS-U of Pitt.........................................  NAVSEA
                                                          BioWatch System.
    RA...................................     3,000,000  Surveillance--ESSENCE Implementation of ESSENCE          Johns Hopkins..........................................  NAVSEA
                                                          Biosurveillance Systems.
    RA...................................       200,000  Technical Advisory Group (TAG) to HSARPA on Bioaerosol   Multiple Awards Pending................................  Edgewood Chemical and
                                                          sensor testing and evaluation methodology.                                                                        Biological Center
    RA...................................    10,853,444  PSITEC, technology clearinghouse.......................  Public Safety and Security Institute for Technology....  U.S. Navy Space and Air
                                                                                                                                                                            Warfare Center (SPAWAR)
    RA...................................       390,750  Recognizing and Understanding Emotion in Speech          Navy Research Lab......................................
                                                          Columbia University.
    RA...................................       382,500  Automated Intent Determination (AutoID)................  University of Arizona..................................  Navy Research Lab
    RA...................................     3,450,000  Bioinformatics and Assay Development Program...........  Multiple Awards Pending................................  Ft. Detrick, USAMRAA
    RA...................................     6,000,000  Rapid Prototyping......................................  Multiple Awards Pending................................  Navy Research Lab
    RA...................................        50,000  Provides funding for Evaluation Plan for BAA 04-02,      Sandia National Laboratory.............................  DOE
                                                          Detection Systems for Radiological and Nuclear
                                                          Countermeasures (DSRNC).
    RA...................................        76,000  Evaluation Plan for BAA 04-02, Detection Systems for     Lawrence Livermore National Laboratory.................  DOE
                                                          Radiological and Nuclear Countermeasures (DSRNC).
    RA...................................         6,888  Office of Weapons of Mass Destruction--Computer          DHS/GSA Schedule.......................................  DHS
                                                          Equipment.
    RA...................................     2,500,000  Evaluation of a Deployed Biosurveillance System........  Potomac Institute......................................  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
    RA...................................       539,720  Port Authority NY/NJ Testbed--PNNL.....................  Pacific Northwest National Laboratory..................  DOE
    RA...................................       500,000  Port Authority NY/NJ Testbed--SRTC.....................  Savannah River Technology Center.......................  DOE
    RA...................................     1,000,000  Port Authority NY/NJ Testbed--EML......................  Environmental Measurements Laboratory..................  DOE
    RA...................................       506,452  DHS Industry Forum.....................................  Center for Technology Commercialization (CTC)..........  DOJ, Office of Justice
                                                                                                                                                                            Programs
    RA...................................       412,988  Port Authority NY/NJ Test Bed PNNL: Sys Analysis.......  Pacific Northwest National Laboratory..................  DOE
    RA...................................    13,000,000  Radiological /Nuclear Test and Evaluation Complex......  Bechtel Nevada.........................................  DOE
    RA...................................       175,000  Weapons of Mass Destruction (WMD) and Nuclear            Camp Peary AFETA.......................................  Armed Forces Experimental
                                                          Assessment Training.                                                                                              Training Activity
                                                                                                                                                                            (AFETA)--Camp Peary
    RA...................................        66,570  Office of Weapons of Mass Destruction--Secure Portable   DHS....................................................  DHS
                                                          Phones.
    RA...................................         5,000  DHS Facilities/GSA Support of S&T, letterhead, etc.....  General Services Administration........................  DHS
    RA...................................       250,000  Interagency Board......................................  Battelle supporting Interagency Board (IAB)............  DHS
    RA...................................    13,244,400  Bio Watch Operations Support...........................  Environmental Protection Agency........................  EPA
    RA...................................       262,500  Unmanned Aerial Vehicle Analysis of AssumptionGeneral    GSA....................................................
                                                          Services Administration.
    RA...................................        41,680  Second Intelligence and Security Informatics Symposium   National Science Foundation (NSF)......................  National Science
                                                          (ISI 2004).                                                                                                       Foundation (NSF)
    RA...................................     2,500,000  DHS Facilities/GSA Support of S&T Relocation...........  General Services Administration........................  DHS
    RA...................................     8,500,000  Homeland Security Institute............................  Award Pending..........................................  Ft. Detrick, USAMRAA
    RA...................................       103,079  TDY Support to Chemical Countermeasures Portfolio U.S.   U.S. Army..............................................
                                                          Army Edgewood Center.
    RA...................................     5,000,000  USCG Research & Development............................  U.S. Coast Guard.......................................  USCG
    RA...................................        80,000  Point Defense Against Aircraft Attack..................  Institute for Defense Analysis (IDA)...................  DOD Washington
                                                                                                                                                                            Headquarters Service
                                                                                                                                                                            (WHS)
    RA...................................        18,965  John Rein 90 Day Extension.............................  NETC...................................................  Naval Education and
                                                                                                                                                                            Training Center
    RA...................................       489,322  Strategic Planning.....................................  Award Pending..........................................  Gov Works
    RA...................................       170,500  Professional & Engineering Services....................  Award Pending..........................................  Department of Interior,
                                                                                                                                                                            Gov Works
    RA...................................       480,000  Support for Planning Documents.........................  Touchstone Corp........................................  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
    RA...................................     2,601,000  Border Safe Integrated Feasibility Experiment Phase II.  Corporation for National Research Initiatives (CNRI)...  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
    RA...................................        25,000  Support of International Meeting of Biometrics Experts.  National Institute of Standards and Technology  (NIST).  National Institute of
                                                                                                                                                                            Standards and Technology
                                                                                                                                                                            (NIST)
    RA...................................       100,000  Enhanced International Travel Security Support.........  Asian Technology Information Program (ATIP)............  Office of Naval Research
    RA...................................       100,000  DHS Canada Collaboration...............................  Sandia National Laboratory.............................  DOE
    RA...................................        86,400  Radiological Dispersal Device (RDD) Workshop...........  Sandia National Laboratory.............................  DOE
    RA...................................       216,250  Chemical Biological National Program (CBNP)              Argonne National Laboratory............................  DOE
                                                          Continuation Program--ANL.
    RA...................................     5,820,000  Chemical Biological National Program (CBNP)              Lawrence Livermore National Laboratory.................  DOE
                                                          Continuation Program--LLNL.
    RA...................................     2,589,500  Chemical Biological National Program (CBNP)              Los Alamos National Laboratory.........................  DOE
                                                          Continuation Program--LANL.
    RA...................................     2,188,750  Chemical Biological National Program (CBNP)              Sandia National Laboratory.............................  DOE
                                                          Continuation Program--SNL.
    RA...................................       598,875  Chemical Biological National Program (CBNP)              Pacific Northwest National Laboratory..................  DOE
                                                          Continuation Program--PNNL.
    RA...................................       567,500  Chemical Biological National Program (CBNP)              Lawrence Berkeley National Laboratory..................  DOE
                                                          Continuation Program--LBNL.
    RA...................................        75,000  Chemical Biological National Program (CBNP)              Oak Ridge National Laboratory..........................  DOE
                                                          Continuation Program--ORNL.
    RA...................................        62,500  Chemical Biological National Program (CBNP)              Idaho National Engineering and Environmental Laboratory  DOE
                                                          Continuation Program--INEEL.
    RA...................................     4,215,475  Plum Island Animal Disease Center (PIADC)--First         Plum Island Animal Disease Center (PIADC)..............  DHS
                                                          Quarter fiscal year 2004 Continuation Funding.
    RA...................................    10,166,544  Plum Island Animal Disease Center O&M..................  Plum Island Animal Disease Center (PIADC)..............  DHS
    RA...................................     1,060,400  Environmental Measurements Lab.........................  Environmental Measurements Laboratory..................  DOE
    RA...................................     6,930,000  Threat Vulnerability Integration Systems Pilot (TVIS)--  Lawrence Livermore National Laboratory.................  DOE
                                                          LLNL.
    RA...................................     3,870,000  Threat Vulnerability Integration Systems Pilot (TVIS)--  Pacific Northwest National Laboratory..................  DOE
                                                          PNNL.
    RA...................................     1,480,050  Yarrow Behavioral Analysis Technical Support Nuclear     Lawrence Livermore National Laboratory.................  DOE
                                                          Assessment Program.
    RA...................................       250,409  PNNL Support to Emergency Preparedness and Response      Pacific Northwest National Laboratory..................  DOE
                                                          Program.
    RA...................................       800,000  Weapons of Mass Destruction--Nuclear Assessment Program  Los Alamos National Laboratory.........................  DOE
                                                          (NAP).
    RA...................................       100,000  Weapons of Mass Destruction--Nuclear Assessment Program  Oak Ridge National Laboratory..........................  DOE
                                                          (NAP).
    RA...................................     4,525,000  Nuclear Assessment Program, Credibility Assessment.....  Lawrence Livermore National Laboratory.................  DOE
    RA...................................       320,000  Nuclear Assessment Program, Forensic Tech Support......  Pacific Northwest National Laboratory..................  DOE
    RA...................................     1,900,000  EPR Scientific Support to FEMA.........................  Lawrence Livermore National Laboratory.................  DOE
    RA...................................     2,229,225  ARS Plum Island Animal Disease Center (PIADC)            Plum Island Animal Disease Center (PIADC)..............  DHS
                                                          Scientific Support.
    RA...................................        45,980  ARS Plum Island Animal Disease Center (PIADC) Admin      PLUM/Plum Island Animal Disease Center (PIADC).........  DHS
                                                          Support.
    RA...................................     1,200,000  Developing a Critical Infrastructure Protection          Los Alamos National Laboratory.........................  DOE
                                                          Decision Support System (CIP/DSS).
    RA...................................     1,200,000  Developing a Critical Infrastructure Protection          Argonne National Laboratory............................  DOE
                                                          Decision Support System (CIP/DSS).
    RA...................................       400,000  Developing a Critical Infrastructure Protection          Pacific Northwest National Laboratory..................  DOE
                                                          Decision Support System (CIP/DSS).
    RA...................................     1,200,000  Developing a Critical Infrastructure Protection          Sandia National Laboratory.............................  DOE
                                                          Decision Support System (CIP/DSS).
    RA...................................     1,500,000  BioWatch--Orange Alert Expanded Sample Analysis........  Lawrence Livermore National Laboratory.................  DOE
    RA...................................     1,514,000  RadNuc Countermeasures--PNNL...........................  Pacific Northwest National Laboratory..................  DOE
    RA...................................     3,313,000  Rad-Nuc Countermeasures PEP--LANL......................  Los Alamos National Laboratory.........................  DOE
    RA...................................       101,900  NRC Workshop Conference................................  National Research Council (NRC)........................  DOE
    RA...................................       700,000  Advanced Scientific Computing--SNL.....................  Sandia National Laboratory.............................  DOE
    RA...................................     4,776,000  Advanced Scientific Computing--LLNL....................  Lawrence Livermore National Laboratory.................  DOE
    RA...................................        85,811  Advanced Scientific Computing--ORNL....................  Oak Ridge National Laboratory..........................  DOE
    RA...................................     2,500,000  National & Regional Visual Analytics Centers...........  Pacific Northwest National Laboratory..................  DOE
    RA...................................       250,000  Environmental Measurements Laboratory Second Qtr         Environmental Measurements Laboratory..................  DOE
                                                          Funding for fiscal year 2004.
    RA...................................     1,298,500  CBNP fiscal year 2003 Continuation and New Start         Los Alamos National Laboratory.........................  DOE
                                                          Funding.
    RA...................................     4,833,500  CBNP fiscal year 2003 Continuation and New Start         Lawrence Livermore National Laboratory.................  DOE
                                                          Funding.
    RA...................................     1,500,000  Photofission-Based Nuclear Material Detection and        Idaho National Engineering and Environmental Laboratory  DOE
                                                          Characterization.
    RA...................................     1,600,000  (Tri-Lab) Threat-Capability Assessments--LANL..........  Los Alamos National Laboratory.........................  DOE
    RA...................................     1,600,000  (Tri-Lab) Threat-Capability Assessments--LLNL..........  Lawrence Livermore National Laboratory.................  DOE
    RA...................................     1,600,000  (Tri-Lab) Threat-Capability Assessments--SNL...........  Sandia National Laboratory.............................  DOE
    RA...................................    15,300,000  First Responder CBRNE Protective and Operational         National Institute of Standards and Technology  (NIST).  DHS
                                                          Equipment Standards Development Program.
    RA...................................       280,000  RADNUC Attribution Advisor.............................  Lawrence Livermore National Laboratory.................  DHS
    RA...................................       255,000  Border Safe Phase II...................................  SPAWAR.................................................  DHS
    RA...................................     2,257,098  Plum Island Animal Disease Center (PIADC) O&M Services   Plum Island Animal Disease Center (PIADC)..............  DHS
                                                          Contract--Remainder of funding.
    RA...................................     1,199,370  ORISE Merit Review for HS Centers......................  Oak Ridge Institute for Science and Education  (ORISE).  DOE
                                          --------------
          RA Total.......................   186,199,518
                                          ==============
    SBIR.................................    17,170,000  Small Business Innovation Research Program (SBIR)......  Multiple Awards Pending................................  Department of the
                                                                                                                                                                            Interior National
                                                                                                                                                                            Business Center/Fort
                                                                                                                                                                            Huachuca
                                          --------------
          SBIR Total.....................    17,170,000
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                 Question Submitted By Senator Daniel K. Inouye

        Question. I continue to have constituent businesses contact my
    office to ask for information about grant opportunities from the
    Department of Homeland Security. My staff has requested a briefing from
    the Science and Technology Directorate. However, the requested briefing
    has so far not been provided. Upon researching on the website, my staff
    came upon an invitation to attend a Department of Homeland Security
    Industry Forum. Mr. Chairman, I request that a copy of this notice be
    placed in the record.
        I would like to quote from this announcement:
        This two-day forum will provide industry the opportunity to hear,
    first-hand, what technology needs and requirements DHS will have in the
    coming years. DHS staff will provide detailed briefings on technology
    R&D and T&E requirements for the Department, as well as, where and when
    to apply for DHS funding.
        A brief itinerary and list of speakers, including several members
    of your staff, is attached. This sounds like a great forum that my
    staff and constituents would be interested to attend. However, a list
    of registration fees is also included. The fees range from $425 for
    members of the government to $625 for private industry. I was surprised
    to learn of the high cost to attend this government briefing. Why are
    government employees required to pay $425 to learn about these funding
    opportunities? Why is DHS charging other entities for this information?
        Answer. Fees for this conference were maintained at levels as low
    as we believed feasible. In accordance with standard government
    practice, fees were set to help offset the costs of conducting a public
    forum rather than supporting the conference with public funds.
                                     ______

        Questions Submitted to Information Analysis and Infrastructure
                                   Protection

                  Questions Submitted by Senator Thad Cochran

                     BIODEFENSE COUNTERMEASURES (BIOSHIELD)

        Question. The President's budget proposes to transfer the Strategic
    National Stockpile back to the Department of Health and Human Services
    but not project Bioshield. IAIP's role in the project BioShield is to
    make the threat assessments necessary to determine proper BioShield
    investments which is the rationale for the Department of Homeland
    Security having responsibility for this program.
        What assessments have been carried out by Information Analysis and
    Infrastructure Protection of our vulnerabilities to biological attacks
    to guide decisions as to the investments which should be made to
    develop, produce and pre-purchase vaccines or other medications from
    BioShield?
        Answer. The Department of Homeland Security has been assigned a
    role in several bioterror initiatives. One such initiative, Project
    BioShield, specifies DHS work with the Department of Health and Human
    Services (HHS) and several other Federal agencies to ensure resources
    are available to combat a sudden chemical or biological attack. The
    central premise for this program is the government must prepare for
    such attacks by acquiring the best vaccines/drugs for pathogens such as
    smallpox, anthrax and botulinum toxin. To do so, current Project
    BioShield guidelines require DHS evaluate likely biological/chemical
    threats and identify promising bioresearch R&D to best address such an
    attack.
        DHS is currently involved in an initiative designed to protect the
    Nation against bioterrorism. This initiative, known as the Bio-
    Surveillance Program, has been in operation since 2003. This program
    not only enhances on-going surveillance in areas such as human health,
    hospital preparedness, State and local preparedness, vaccine research
    and procurement, animal health, food and agriculture safety and
    environmental monitoring but will integrate these data streams with
    intelligence data in a comprehensive fashion.
        IAIP's role in the Bio-Surveillance Program is developing a real-
    time system for harvesting data on the health of our population,
    animals, plants, and food supply, as well integrating this information
    with environmental monitoring and intelligence data. This integration
    can enable better decision-making and a more rapid Federal, State, and
    local response. Coordination between DHS and the Department of Health
    and Human Services and the Department of Agriculture is ongoing. This
    data exchange will help DHS, HHS, and other Federal agencies evaluate
    potential health threats and guide bioterrorism preparedness resource
    investments.

                                 CYBER SECURITY

        Question. The National Cyber Security Division, as part of the
    Information Analysis and Infrastructure Protection Directorate,
    recently unveiled the National Cyber Alert System which intends to
    deliver information to home computer users and technical experts in
    business and government agencies to better secure their computer
    systems from the latest computer viruses.
        What progress has been made by the National Cyber Security Division
    to prevent the spread of this computer virus as well as future virus
    and worm outbreaks?
        Answer. The lynch pin to preventing the spread of computer viruses
    and worm outbreaks is a robust and mutually beneficial relationship
    with the private sector. Cyber security is often a reactive process
    because the initiative rests with hackers and malicious agents.
    Developing and maintaining a partnership with the private sector is
    therefore a crucial means to both responding quickly to emerging
    threats and taking proactive measures to forefend against potential
    threats. The DHS/US-CERT Partner Program is composed of members that
    recognize their responsibility to their organizations and the Nation to
    improve the current and future state of cyber security. Members
    collectively and individually realize the need to take action and abide
    by principles and practices that are appropriate as critical
    infrastructure operators, communities of interest, vulnerability
    researchers, educators, and software vendors. The Partner Program
    consists of participants from various sectors of the cyber community
    who must agree to meet certain criteria in order to achieve the
    designation of DHS/US-CERT partner. These criteria are designed with
    the aim of preventing occurrences such as the spread of computer
    viruses and worms and other malicious activities.
        Another important tool for the prevention of worms and viruses is
    the National Cyber Alert System. Americans are exhibiting a keen
    interest in the alert system. On day one of the National Cyber Alert
    System launch, we had more than one million hits to the US-CERT
    website. Today, more than 250,000 direct subscribers are receiving
    National Cyber Alerts to enhance their cyber security. Through the
    alert systems, Americans are able to receive information that is
    accurate and actionable. It is our goal to inform the public about the
    true nature of a given incident, what the facts are, and what steps
    they can and should take to address the problem. The offerings of the
    National Cyber Alert System provide that kind of information. To date,
    we have issued seven security tips, six security bulletins, ten
    technical alerts, and six non-technical cyber alerts in response to
    cyber security incidents through the National Cyber Alert System. We
    strive to make sure the information provided is understandable to all
    computer users, technical and non-technical, and reflect the broad
    usage of the Internet in today's society. As we increase our outreach,
    the National Cyber Alert System is investigating other vehicles to
    distribute information to as many Americans as possible.
        Question. What is the relationship of the National Cyber Security
    Division with the Terrorist Threat Integration Center (T-TIC) on
    combating computer viruses by terrorists?
        Answer. NCSD, in partnership with DHS/IAIP/IA works intensively
    with the law enforcement and intelligence communities including the
    TTIC in order to develop a comprehensive threat, risk, attribution
    assessment and response capability.
        Question. What law enforcement agency has primary jurisdiction in
    enforcing cyber crimes?
        Answer. No single law enforcement agency has primary jurisdiction
    in the investigation of cyber crime. The FBI and Secret Service are the
    most visible, pervasive agencies, but other organizations, such as the
    IRS' Office of the Inspector General or ICE's Cyber Smuggling Division,
    have specialized areas of responsibility in the areas of enforcing
    cyber laws.

                       HOMELAND SECURITY ADVISORY SYSTEM

        Question. The Homeland Security Advisory System has evolved from a
    nationwide threat level status to more specific targeted areas since
    the latest threat level decrease in January. While the threat level is
    currently at an ``Elevated Condition'', or code yellow, specific cities
    and the aviation sector remain at the ``High Condition'', or code red.
    This more targeted threat level status helps focus limited resources on
    the most credible threat areas and at the same time allows law
    enforcement and first responders in other parts of the country to
    ``stand down'' while remaining vigilant. In recent testimony, Secretary
    Loy testified that the Department was ``very close'' to unveiling a
    system that would allow specific threat warnings to about a dozen
    economic sectors.
        With the improvement of intelligence that has included detailed
    specific terrorist threats for certain metropolitan areas and specific
    sectors of industry, what further enhancements do you envision for the
    Homeland Security Advisory System?
        Answer. With each raising and lowering of the Homeland Security
    Advisory System (HSAS), the Department of Homeland Security learns new
    lessons and improves its notification process. As the system has
    evolved, it has come to reflect the need for certain metropolitan areas
    and/or specific areas of industry to be notified at different times or
    at different levels than others. As such, DHS has become adept at
    providing information to such specific audiences as states and sectors
    through Homeland Security Information Bulletins and Advisories.
    Additionally, Department officials speak personally with
    representatives and officials of threatened States and industries, when
    the need arises. This personal communication, along with the ability of
    the system to allow DHS to communicate to certain areas what their
    alert level should be embody the enhancements that have been needed
    this far.
        Question. Are you looking to enhance or improve upon any of the
    eight existing Federal warning systems that are currently being
    operated nationwide?
        Answer. Yes. With the $10,000,000 provided to IAIP in last year's
    Homeland Security Appropriations Conference Report (108-280) we plan to
    enhance and upgrade NOAA Weather Radio and the Emergency Alert System
    (EAS), and possibly other systems. A few vital efforts have been
    identified for immediate funding. Those include improving the coverage
    and survivability of the EAS by (1) installing a satellite-based
    message delivery capability and (2) by adding EAS stations to all 50
    States (to include State Emergency Operations Centers) and U.S.
    territories. Also, there are pilot projects planned to: (1) examine how
    reverse 911 can be used to help disseminate alert and warning
    information; and (2) demonstrate how new technologies such as digital
    TV broadcasts/datacasting using spectrum offered by public TV can be
    used to improve our ability to alert the American public. These three
    projects represent a portion of the $10,000,000, but the bulk of the
    funding will be allocated after completion of a study of available and
    planned alert and warning systems to develop integrated, capabilities-
    based architecture recommendations. This study will be completed by the
    end of summer.

                     HOMELAND SECURITY INFORMATION NETWORK

        Question. Another enhancement being made by the Department in the
    area of information sharing is the new Homeland Security Information
    Network which will be able to disseminate threat information to
    Federal, State and local law enforcement agencies.
        Is the Department on schedule to complete the first phase of the
    network this summer, and what is the targeted deadline to complete the
    flow of real-time information to all relevant end-users throughout the
    country?
        Answer. The Department is on schedule to meet the summer deadline.
    We plan to begin expansion of HSIN to the county level, in conjunction
    with the each State's individual rollout plans, by the end of year. By
    the beginning of next year, we plan to be actively engaged with other
    homeland security partners, such as the private sector, to support
    further real time, secure collaborative information flow.
        Question. How will the Homeland Security Information Network be
    different from the Joint Regional Information Exchange System and
    Regional Information Sharing Systems which are already in place and in
    use?
        Answer. The Homeland Security Information Network (HSIN) is the
    overarching network for the Department of Homeland Security (DHS) to
    provide information exchange and real time collaboration between
    Federal, State, and municipal authorities. Within the initial program
    there will be four HSIN areas: HSIN/DM (Decision Maker-used by Federal,
    State and Urban area homeland security advisors); HSIN/EOC (used
    primarily by Federal, State and urban emergency operations centers);
    HSIN/NG (used primarily by the NGB and the State adjutant generals);
    and the HSIN/JRIES (used primarily by law enforcement and intelligence
    agencies). This summer, other areas within HSIN, like the Secret and
    DHSInfo areas will be activated. HSIN is the umbrella program under
    which all of these virtually private networks are contained.
        While there is a need to be able to disseminate intelligence
    information across the full spectrum of the HSIN system, the primary
    HSIN tools to be used for intelligence dissemination will be the HSIN/
    JRIES (Law Enforcement and intelligence information) area and the HSIN/
    Secret network (JRIES at the Secret level). This will initially run on
    the National Guard (SIPRNet) backbone then migrate to the HSDN network
    once the DHS classified system becomes operational.
        The goal of HSIN is to have an integrated system that uses the same
    tools and applications. These applications will run on separate areas
    of the HSIN network defined by the user group's clearance, need to
    know, and need to act as approved by DHS.

                                 CYBER SECURITY

        Question. The Department's new initiative ``Live Wire'' will test
    civilian agencies' security preparedness and contingency planning by
    staging cyber attack exercises to evaluate the impact of widespread
    computer disruptions. Recent instances, such as the power outages in
    the Northeast this past August, are an example of how an attack on our
    critical infrastructures, such as a cyber attack by terrorists on our
    Nation's utility industry, could cascade across a wide region if the
    proper precautions are not taken immediately.
        What was learned from previous simulated terrorist attacks on the
    Nation's cyber infrastructure, and how will ``Live Wire'' build upon
    current programs?
        Answer. Strategically, Livewire demonstrated the impact of a cyber-
    based attack on critical infrastructures. The exercise highlighted the
    interdependencies among our critical infrastructures and underscored
    the requirement for enhanced cross-sector cooperation. At the tactical
    level, Livewire demonstrated the need to enhance processes for
    communicating cyber protection information to the public and for two-
    way information sharing with the private sector. Livewire prompted us
    to enhance our vulnerability identification and reduction capabilities.
    This drove us to create the Cyber Interagency Incident Management Group
    (Cyber IIMG) to coordinate intergovernmental preparedness and response
    operations. It also spurred us to expand the reach of emergency
    communications capabilities using a technologically advanced, secure
    network. In addition, we launched the National Cyber Alert System as a
    dissemination mechanism to provide the broadest population of public
    stakeholders with accessible, relevant, actionable alerts and
    information.
        Question. How do you coordinate ``Live Wire'' exercises with
    private industry to test their cyber infrastructure vulnerabilities,
    and what gaps in coordination have been revealed between government
    agencies and the private sector?
        Answer. Whereas the first responder and emergency management
    communities have been exercising at national, regional, and local
    levels for many years, the cyber response community has only formed
    over the past decade or so. There have been very few cyber-focused
    exercises at any level. Efforts to coordinate an effective cyber
    response capability across State and local jurisdictions and economic
    sectors are only beginning.
        The Federal Government cannot by itself defend cyberspace from
    current or future threats. Acknowledging this, NCSD collaborates with
    industry and public-sector stakeholders across the country to define,
    develop, and exercise the major elements of a national cyber-space
    security response system. Its goals for the National Exercise Program
    (NEP) are to:
      --Sensitize a diverse constituency of private and public-sector
            decision-makers to a variety of potential cyber threats
            including strategic attack;
      --Familiarize this constituency with DHS' concept of a national cyber
            response system and the importance of their role in it;
      --Practice effective collaborative response to a variety of cyber
            attack scenarios, including crisis decision-making;
      --Provide an environment for evaluation of inter-agency and inter-
            sector business processes reliant on information
            infrastructure;
      --Measure the progress of ongoing United States efforts to defend
            against an attack;
      --Foster improved information sharing among government agencies and
            between government and industry;
      --Identify new technologies that could provide earlier warning of
            attacks;
      --Sort roles and responsibilities of government agencies and
            industry.
        NCSD's involvement in the NEP will be guided by two principles: (1)
    Cyber is only one element of a multifaceted NEP; cyber elements must be
    closely coordinated with other elements of that program to ensure
    efficient use of limited resources and the most effective return on
    exercise investments; (2) Cyber exercise elements must not be sidelined
    or relegated to an ``afterthought'' category within the NEP.
        Although the NEP is the responsibility of the Office of Domestic
    Preparedness (ODP), the NCSD will retain overall responsibility for
    planning and execution of adequate cyber response exercises. The NCSD
    shall identify a NEP cyber exercise program manager, ensure adequate
    resources are available for cyber elements of the NEP, including
    personnel, define NEP cyber exercise objectives and metrics, prioritize
    NEP cyber exercise events, solicit Federal agency and department
    participation in cyber-focused elements of the NEP, and initiate or
    approve Statements of Work for contracted cyber exercise activities.
        Wherever appropriate, the NCSD will coordinate ODP on funding and
    personnel issues.
        The NCSD requires a set of cyber-focused exercises that build
    grassroots cyber response capabilities quickly while also elevating the
    concept of strategic cyber attacks and maturing a national cyberspace
    security response system capable of dealing with them. Cyber-focused
    exercises must include a series of regularly scheduled ``Building
    Block'' exercises followed by a culminating, nationally scoped exercise
    similar to Livewire, also the continuation of tabletop events hosted by
    the USSS (Electronic Crimes task Forces).
        We also require that cyber be included as an important element in
    targeted NEP events that do not have a cyber focus. Examples are
    TOPOFF, FEMA (EP&R) readiness exercises, and policy-focused seminars
    for senior officials. Each of these exercise events should include
    cyber scenarios and cyber responders.

                       NATIONAL CRITICAL INFRASTRUCTURES

        Question. Recently published was the interim final rule for the
    voluntary submittal of critical infrastructure information by private
    industry to the Department of Homeland Security with assurances that
    the proprietary data submitted would be safe from public disclosure.
        What level of cooperation with private industry do you anticipate
    as you gather information on the Nation's critical infrastructures?
        Answer. It is difficult to forecast the extent to which private
    industry will voluntarily share critical infrastructure information
    with DHS. We only know that private industry has consistently stated in
    the past that two barriers to sharing information with the government
    were concerns that (1) the information would be released to the public
    under the Freedom of Information Act and (2) the disclosure could
    create a civil liability for the company sharing the information. The
    Critical Infrastructure Information Act of 2002 and the Interim Final
    Rule which implements it, we believe, removes these two barriers to
    information sharing with the government.
        Question. How will the publishing of this rule help the Department
    in its effort to safeguard the country's privately-held critical
    infrastructures?
        Answer. The CII Act and implementing regulations provide private
    industry assurances that critical infrastructure information they
    voluntarily share with the government will be protected from release to
    the public and from use in civil litigation. We believe the PCII
    Program will enable the Department to receive critical infrastructure
    information that would not have previously been available to the
    government, thereby allowing for a better understanding of threats.
        Question. What incentive is there for private industry to volunteer
    information to the Federal Government?
        Answer. Private industry realizes they can assist in efforts to
    improve homeland security by volunteering information. What was needed
    was a means for them to share information that is usually considered
    proprietary and shielded from competition here and abroad. With the
    protection from FOIA disclosure offered by the CII Act, we believe the
    private sector can now share sensitive and confidential information
    that we can be analyzed to identify threats and vulnerabilities. Such
    analysis will provide the basis not only for developing measures to
    deter the threats and mitigate the vulnerabilities to which the
    critical infrastructure is exposed, but also for improving Federal,
    State, and local governments' emergency preparedness posture to respond
    to any attacks more effectively.
        Question. In December of last year, a Homeland Security
    Presidential Directive was issued to produce a comprehensive,
    integrated National Plan for Critical Infrastructure and Key Resources
    Protection for all Federal departments and agencies to outline national
    goals, objectives, milestones, and key initiatives to be completed
    within 1 year.
        With various departments and agencies previously conducting
    assessments of their vulnerabilities, do you believe this directive can
    be completed earlier than the deadline of December of this year?
        Answer. The President intends that we meet the requirement to
    develop the NIPP by December 2004, but, given the urgency of the need,
    we will complete it earlier if possible.
        Question. Has funding been requested in other departments' and
    agencies' budgets outside of the Department of Homeland Security to
    carry out the Presidential directive, or will the Department of
    Homeland Security be requested to assist other agencies in the
    assessment of critical infrastructures?
        Answer. Under HSPD-7, Sector-Specific Agencies shall, among other
    things, ``conduct or facilitate vulnerability assessments'' of their
    respective sectors in accordance with guidance provided by the
    Department of Homeland Security. Each department and agency will need
    to budget for efforts to carry out their HSPD-7 responsibilities and
    provide that information to the President and the Congress.
        Question. The Congress made available over $343,000,000 for
    Remediation and Protective Actions for fiscal year 2004 for critical
    infrastructure identification, to conduct vulnerability field
    assessments of critical infrastructures, and to create a database of
    vulnerabilities affecting the highest priority terrorist targets in
    order to develop better security measures for the protection of
    facilities and national assets.
        What is the timeline of your Directorate for identifying our
    Nation's critical infrastructures, and what progress has been made in
    field assessments of the critical infrastructures that have already
    been identified?
        Answer. We have built the National Asset Database (NADB). It is a
    comprehensive database designed to catalogue the Nation's critical
    infrastructure and key assets (CI/KA). The central purpose for
    constructing this database is to identify assets that may be attractive
    targets to terrorists so measures can be taken to help mitigate risk.
    There are now approximately 33,000 sites listed on the NADB, and DHS
    continues to receive additional nominees from States and territories.
    We view the NADB as a living database, therefore sites will be added or
    removed as warranted by ongoing assessments. Inputs continue to be
    received and from private industry as well as Federal, State and local
    governments.
        In regards to field assessments of identified critical
    infrastructures, over the past 6 months DHS has conducted approximately
    89 Site Assistance Visits (SAVs) for the highest priority sites and
    produced 25 Characteristics and Common Vulnerabilities (CCVs) reports
    on vulnerabilities for specific classes of CI/KA.
        We anticipate completing another 74 CCVs by the end of the fiscal
    year and conduct any necessary SAVs.
        Question. Who will retain the database of vulnerable critical
    infrastructures, and who will have access to it?
        Answer. DHS will retain the NADB. As we receives additional input
    from States, territories, and other Federal agencies it will update/
    maintain the NADB and share asset information with other DHS entities,
    such as the Office for Domestic Preparedness (ODP), to help prioritize
    resource allocation for the implementation of protective measures to
    safeguard our Nation's critical infrastructure and key assets. State-
    specific information will also be shared with State Homeland Security
    Advisors as appropriate both to solicit comments and to identify State
    priorities. Appropriate access will be and is grant to private industry
    concerning their data and assets.
        Question. What type of security procedures for our Nation's
    identified critical infrastructures have been implemented?
        Answer. As priority assets are identified, we conduct risk analyses
    and consequence of attack analyses to help determine which sites are at
    greatest risk. PSD then develops plan templates and other tools to
    assist owners and operators in developing Buffer Zone Protection Plans
    (BZPPs) and site security protection plans. The BZPP helps develop
    effective preventive measures that make it more difficult for
    terrorists to conduct surveillance or launch attacks from the immediate
    vicinity of a possible target.

          OFFICE FOR DOMESTIC PREPAREDNESS USE OF DATABASE INFORMATION

        Question. In recent testimony, Secretary Ridge cited that the
    ``maturity and growth'' of the Information Analysis and Infrastructure
    Protection Directorate is allowing for better targeting of resources
    for the Office for Domestic Preparedness in the decision-making process
    for the distribution of grants to high threat areas across the country.
        What improvements have been made over the past year by the
    Information Analysis and Infrastructure Protection Directorate to
    assist the Office for Domestic Preparedness in making sure that Federal
    funds are going to the areas where the threat of a terrorist attack is
    the greatest?
        Answer. IAIP assisted ODP in the identification of a set of
    critical assets from the NADB that most warranted additional resources
    to enhance their security for fiscal year 2004. This resulted in the
    identification of approximately 1,700 assets onto a fiscal year 2004
    list of assets warranting special attention for fiscal year 2004 funds.
        Future development of the NADB and our efforts to identify and
    prioritize national critical infrastructure and key assets will, we
    believe, help us ensure the best protection of critical infrastructure
    and best use of Federal resources.
        Question. How will the Information Analysis and Infrastructure
    Protection Directorate work to share information catalogued in the
    database of critical infrastructures with the Office for Domestic
    Preparedness to target grants to the country's highest threat areas?
        Answer. Similar to fiscal year 2004, an analytical framework will
    be used to identify and prioritize assets on the expanded NADB, and
    this information will be shared with ODP to help develop its lists of
    assets that may require grant assistance in fiscal year 2005.
        Intelligence capabilities 10. The President's budget proposes a
    $19,300,000 decrease in funding for the Information Analysis and
    Infrastructure Protection Directorate in order to centrally fund the
    Terrorist Threat Integration Center (T-TIC) with other intelligence
    programs and also to centrally fund the Federal Bureau of
    Investigation's (FBI) Terrorist Screening Center with Department of
    Justice programs.
        Question. Without the contribution of funding that the Department
    of Homeland Security currently makes to the Terrorist Threat
    Integration Center, do you believe that the Department will have an
    adequate intelligence presence in T-TIC?
        Answer. Yes. The Department of Homeland Security (DHS) will provide
    10 percent, or 30 personnel, to the Terrorist Threat Integration
    Center's (TTIC's) end goal of 300 personnel. This, as well as the close
    working relationship that TTIC and the DHS Office of Information
    Analysis (IA) have developed ensures an initial intelligence presence
    at TTIC.
        Question. What will the Information Analysis and Infrastructure
    Protection's role be in the Terrorist Threat Integration Center and the
    Terrorist Screening Center without providing any funding of its own?
        Answer. Per the explanation above, the DHS Information Analysis and
    Infrastructure Protection (IAIP) Directorate's role in both TTIC and
    the Terrorist Screening Center is the physical presence of personnel at
    each location. DHS analysts will inform the TTIC's work. Conversely,
    TTIC analysts will inform DHS' analysis. In addition to analytical
    personnel, DHS senior leadership will retain their presence at each
    center.
        Question. How do you prevent a duplication of intelligence
    gathering and intelligence analysis with the Terrorist Threat
    Integration Center?
        Answer. Terrorism analysis is a complex issue. It is an area where
    a certain amount of multiple analyses from different perspectives is
    preferred. To ensure no vital piece of intelligence is missed, the
    analysis of terrorist information is a shared responsibility.
        DHS' Office of Information Analysis (IA) analytical intelligence
    mission is to protect the American homeland against terrorist attack.
    To do so, IAIP maps terrorist threats and capabilities against assessed
    vulnerabilities. IA also communicates information to State, local,
    tribal, major city, and private sector officials. TTIC's primary
    responsibility is the analysis of all international terrorism threat
    information whether collected domestically or abroad.
        Question. Without a request for funding within the Department of
    Homeland Security for the integration of the multiple terrorist
    watchlists, how will the Department of Homeland Security participate in
    consolidating various agencies' terrorist lists?
        Answer. The Department of Homeland Security is participating in the
    Terrorist Screening Center (TSC) through physical location of personnel
    in the center.
        Question. Please distinguish the functions of T-TIC from the
    intelligence functions of the Information Analysis and Infrastructure
    Protection Directorate.
        Answer. As a Directorate, IAIP enables, develops, and sustains the
    capability to continuously identify, assess, and prioritize current and
    future threats to the homeland, map those threats against
    vulnerabilities, issue timely warnings, provide the basis from which to
    organize protective measures to secure America, and assist in
    coordinating the response and restoration of critical infrastructure
    functions. Currently, IAIP is moving forward in carrying out our
    statutory responsibilities which include:
      --Providing the full range of intelligence support to senior DHS
            leadership and component organizations and to State and local
            and private sector respondents.
      --Mapping terrorist threats to the homeland against assessed
            vulnerabilities to drive our efforts to protect against
            terrorist attacks
      --Conducting independent analysis and assessments of terrorist
            threats, including competitive analysis, tailored analysis, and
            ``red teaming''
      --Assessing the vulnerabilities of key resources and critical
            infrastructure of the United States
      --Merging the relevant analyses and vulnerability assessments to
            identify priorities for protective and support measures by the
            Department, other government agencies, and the private sector
      --As a full member of the Intelligence Community, the Office of
            Information Analysis partnering with other IC members, TTIC,
            law enforcement agencies, State and local partners, and the
            private sector, as well as DHS' components to manage the
            collection and processing of information involving threats to
            the Homeland into usable, comprehensive, and actionable
            information.
      --Disseminating time sensitive warnings, alerts and advisories to
            Federal, State, local, and tribal governments and private
            sector infrastructure owners and operators
        TTIC is an interagency joint venture of its partners. The TTIC
    members include, but are not limited to, the Department of Justice/FBI,
    DHS, CIA, National Security Agency, National Imagery and Mapping
    Agency, Defense Intelligence Agency, and the Department of State.
    Through the input and participation of these partners, TTIC merges and
    analyzes terrorist threat-related information, collected domestically
    and abroad, in order to form the most comprehensive possible threat
    picture, and disseminate such information to appropriate Federal
    Government recipients. TTIC draws on the particular expertise of its
    participating members--such as DHS' focus on homeland security and
    CIA's focus on terrorism information collected overseas--thereby
    ensuring that the terrorist analytic product takes advantage of, and
    incorporates, the specialized perspectives of relevant Federal
    agencies. TTIC provides comprehensive, all-source terrorist threat
    analysis and assessments to U.S. national leadership.
        Currently, DHS representatives are located at TTIC, working day-in-
    day-out, participating in processing and analyzing terrorist threat-
    related information, developing, shaping, and disseminating TTIC
    products, assessing gaps in the available information, and ensuring
    that TTIC products reach appropriate DHS Headquarters elements. Through
    DHS, the necessary information, including threat descriptions,
    suggested protective measures, and locations of additional information,
    then reaches the appropriate State, local, tribal, major city and
    private sector officials. Analysts assigned to TTIC ensure that TTIC's
    work directly supports DHS' unique mission to protect the homeland. The
    threat information integration and analysis that is the beginning, not
    the end, of DHS' protective mission, will most effectively be carried
    out, as Congressional and other reviews have recommended, when all
    terrorism threat-related activities of the U.S. Government work
    together seamlessly.
                                     ______

                Questions Submitted by Senator Pete V. Domenici

             NATIONAL INFRASTRUCTURE SIMULATION AND ANALYSIS CENTER

        Question. Mr. Libutti, the Department of Homeland Security has
    taken ownership of the National Infrastructure Simulation and Analysis
    Center, or NISAC. NISAC was developed by Sandia and Los Alamos National
    Laboratories to simulate and analyze various events and the cascading
    effects on critical infrastructure in the United States. Following the
    September 11th terrorist attacks, NISAC took on added importance as the
    Administration and Congress focused on homeland security. The fiscal
    year 2004 Homeland Security Appropriations Act had approximately
    $23,000,000 for NISAC. Would you please give the Subcommittee the
    status of the allocation of the fiscal year 2004 funding?
        Answer. The Homeland Security Appropriations Act of 2004 did not
    contain a specific line item for services to be provided by the
    National Infrastructure Simulation and Analysis Center (NISAC).
    However, the Department has set aside $20,000,000 in October 2004 for
    NISAC programmatic efforts to be performed by Los Alamos National
    Laboratory ($10,000,000) and Sandia National Laboratory ($10,000,000).
    Some of the planned NISAC activities include chlorine industry studies,
    analyses of rail system and electric power disruptions, assessments of
    Hurricane Isabel impacts on infrastructure, port and inland waterway
    modeling, as well as urban infrastructure modeling.
        Question. How much is in the President's fiscal year 2005 budget
    request to support activities by NISAC?
        Answer. The fiscal year 2005 request for the NISAC is $27,000,000.
        Question. What are some of the activities envisioned in the fiscal
    year 2005 budget for NISAC?
        Answer. NISAC fiscal year 2005 activities are expected to include
    expansion of the Center's developing National and Regional Tools into
    additional regions and cities of the Nation. Additionally, NISAC will
    begin developing consequence analysis and decision support tools to
    support the following:
      --Expansion of the urban infrastructure suites models for
            transportation, telecommunications, water, public health and
            energy to additional high threat urban areas.
      --Expansion of the dynamic simulation models to selected east and
            west coast ports.
      --Expansion of the interdependent energy infrastructure simulation
            system.
      --Expansion and testing of the waterways asset prioritization tool in
            concert with the U.S. Coast Guard and Army Corps of Engineers.
      --Continued expert analysis and support to short term actions for the
            Department's primary missions using the Center's developing
            infrastructure models.
        One of the items that transferred from the Department of Energy to
    the Department of Homeland Security with NISAC was an appropriation of
    $7,500,000 for the construction and equipping of a NISAC facility at
    Kirtland Air Force Base in Albuquerque, New Mexico, which is adjacent
    to Sandia National Lab. Those funds have not been released for their
    intended purpose.
        Question. What is the delay in moving forward on this important
    facility?
        Answer. IAIP continues to move forward with the plans to build the
    facility, giving full consideration to the elements of the program and
    our obligation to comply with NEPA and other Federal statutes
    applicable to Federal construction projects.
        Question. What is the status of the $7,500,000 appropriation
    specifically for the NISAC facility? Are those funds being held for the
    intended purpose?
        Answer. IAIP continues to move forward with the plans to build the
    facility, giving full consideration to the elements of the program and
    our obligation to comply with NEPA and other Federal statutes
    applicable to Federal construction projects.
        Question. When can the Subcommittee expect the Department of
    Homeland Security to break ground on the NISAC facility in New Mexico?
        Answer. IAIP continues to move forward with the plans to build the
    facility, giving full consideration to the elements of the program and
    our obligation to comply with NEPA and other Federal statutes
    applicable to Federal construction projects.
                                     ______

                   Question Submitted by Senator Larry Craig

        Question. Gen. Libutti I would like to compliment you on your
    approach to working with the national laboratories. It is clear that
    your management team is committed to using the best capabilities
    available in the most efficient way. In that vein, I would like to
    invite you to visit the Idaho National Engineering and Environmental
    Laboratory to learn more about how INEEL can contribute to your
    engineering, testing, and evaluation needs. The INEEL is in the process
    of standing up its national Critical Infrastructure Protection Test
    Range. Your organization is now using some of the resources that exist
    there. I think you will find it valuable to learn first hand the
    breadth of capabilities they have to offer your organization and their
    abilities to help you accelerate the implementation of many of your
    programs.
        In the longer term, I presume that testing and evaluating
    technologies before deployment by IAIP will be an important part of
    your mission.
        How much value do you see in having a national critical
    infrastructure protection test range available to you to accomplish
    your mission?
        Answer. I see great value in a facility that gives DHS the ability
    to test and evaluate infrastructure protection Technologies. As you
    noted, the Idaho National Engineering and Environmental Laboratory
    (INEEL) provides just such a Test and Evaluation (T&E) and modeling
    capability to DHS to help guide the development of critical
    infrastructure protection systems.
        INEEL has functional electrical grids, nuclear power plants and
    chemical processing facilities on its premises. INEEL engineers have
    been using this facility to conduct vulnerability and risk assessments
    on critical infrastructure for years. Furthermore, the test range
    itself is located in a remote and isolated area, giving the INEEL staff
    the freedom to conduct real world, hands-on vulnerability assessments
    without placing a local population at risk.
        As you may know, the Protective Security Division (PSD) of IAIP
    already is working with INEEL to address the vulnerabilities of our
    Nation's critical infrastructure by developing a National SCADA Testbed
    and a Process Control Security and Vulnerability Reduction Center. This
    new and important partnership between DHS and INEEL will help protect
    the Nation's critical infrastructure systems from both inadvertent
    failures and malicious attacks.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                       CRITICAL INFRASTRUCTURE PROTECTION

        Question. The budget for remediation and protection of critical
    infrastructure includes the identification of critical infrastructure
    and assessing vulnerabilities in addition to implementing remediation
    and protection measures. For fiscal years 2004 and 2005, please
    estimate, by critical infrastructure sector, the amounts actually spent
    or planned to be spent on identifying critical infrastructure and
    assessing vulnerabilities versus the amount spent on remediation or
    protection of critical infrastructure. For protective measures, please
    distinguish between investments made for ``buffer zones'' versus
    investments made to harden security ``on site.''
        According to the Department, 85 percent of the critical
    infrastructure is owned by the private sector. In assessing the need
    for Federal investments to secure our critical infrastructure, it will
    be essential for Congress to have measurable benchmarks of private
    sector investments in such infrastructure, such as investments in
    chemical facilities, port security, and cyber-security. Please provide
    the subcommittee with any benchmarks that have been established that
    show the private sector is making the necessary investments to secure
    our critical infrastructure and key assets.
        Please explain in detail how the $19,900,000 appropriated in fiscal
    year 2004 and the $19,900,000 requested in fiscal year 2005 will be
    spent for ``Protective Security Centers.'' How many centers have been
    established or planned to date and where are they located? How much
    funding is needed for each center? What purpose does each center serve?
        Answer. As a result of a mid-year review, two Protective Security
    Centers are planned for fiscal year 2004; one is linked to NYPD and
    another to LAPD. These centers, at a total cost of $10 million, will
    assist DHS to (a) identify critical assets in metropolitan areas for
    inclusion in national databases; (b) create partnerships between the
    police departments and protective security officials in the private
    sector to focus on combined protective activities; (c) reinforce
    Federal-State-local incident management procedures; and (d) develop
    training and exercise programs focused on protection vice response.
    Additional centers may be established in fiscal year 2005 and
    strategically located across the country to best serve law enforcement
    agencies. Funds are being used for the physical build-out and
    furnishing of the Centers with required infrastructure, computers and
    other necessary equipment and supplies. The respective police
    departments will staff the Centers.

                            CHEMICAL PLANT SECURITY

        Question. The General Accounting Office recently testified that
    ``despite the industry's voluntary efforts, the extent of security
    preparedness at U.S. chemical facilities is unknown.''
        Explain IAIP's role in assessing vulnerabilities and taking
    protective at chemical security plants? How much of IAIP's fiscal year
    2004 and fiscal year 2005 budget, respectively, is dedicated to
    chemical plant security. For each fiscal year, please specify the
    amount spent or planned for vulnerability assessments, the number of
    chemical plants IAIP will provide vulnerability assessments for in
    fiscal years 2004 and 2005, and provide the amount planned for
    protective actions. Please specify, in detail, the protective actions
    IAIP will take in fiscal years 2004 and 2005 to secure chemical plants.
    Provide the amount of funding that is being spent to secure the area
    surrounding chemical plants versus funding being spent to harden
    security at the chemical plants themselves.
        Due to the dynamic threat environment combined with the ongoing
    effort to identify and prioritize the Nation's critical infrastructure
    and key assets (CI/KA), IAIP budgets reflect efforts to reduce
    vulnerabilities across all sectors to maximize flexibility in
    responding to emerging threats. That said, in fiscal year 2004 over
    $38.5 million of PSD's budget was dedicated to collecting, cataloging,
    and analyzing vulnerability assessment information across all sectors.
    The President's fiscal year 2005 budget has dedicated $38.7 million
    towards these efforts, enabling us to continue to reduce the
    vulnerabilities of our Nation's CI/KA.
        DHS has conducted approximately 19 Site Assistance Visits (SAVs)
    specifically to chemical facilities to assess their common
    vulnerabilities. The data collected during these site-specific visits
    is used to produce tools to help critical infrastructure owners and
    operators bolster protective measures.
        One such tool is the Characteristics and Common Vulnerabilities
    (CCVs) report series on vulnerabilities for classes of critical
    infrastructure and key assets (CI/KA). A CCV report for chemical
    facilities and a separate CCV for chemical storage facilities have been
    produced by PSD, and both are available to owners and operators of
    these facilities.
        Answer. We also are assisting State and local authorities, as well
    as private industry, in developing Buffer Zone Protection Plans (BZPPs)
    for areas immediately adjacent to the ``fence line'' of critical
    infrastructure. The approximately 1,700 BZPPs completed by the end of
    2004, included roughly 360 chemical sites warranting special attention.
    For fiscal year 2004 we allocated up to $50,000 per CI/KA site for
    vulnerability reduction. A data call is currently underway to support
    the identification of sites for attention in fiscal year 2005 and
    Protective Security Division (PSD) is excepting to complete roughly
    2,000 BZPPs next year.
        Building upon a program initiated in fiscal year 2004 (funded at
    $3.25 million), the DHS fiscal year 2005 budget request has
    approximately $10.8 million dedicated to the acquisition of web cam
    monitors for the chemical sector. These monitors will be installed
    adjacent to designated critical chemical sites to extend their buffer
    zones and enhance protective measures. DHS' plan is to provide this
    equipment to local law enforcement agencies to install on public right
    of ways to monitor the security of these facilities.
        DHS also has established a protection, training, and planning
    program for State homeland security personnel, local law enforcement,
    chemical facility operators and site security personnel. Periodic
    drills among the protective community will be conducted to exercise
    chemical facilities' response plans in case of a terrorist attack. PSD
    will continue to work with the Office for Domestic Preparedness to
    incorporate chemical plant security into national exercises.
        We are also in the process of developing plans for and deploying
    Protective Security Advisors (PSAs). Each PSA will have responsibility
    for a specific region of the county and will maintain a close
    relationship with the chemical plant owners and operations in their
    specific area of responsibility. PSAs will facilitate information
    sharing, organize protective security training, assist in emergency
    coordination, and represent DHS in the communities in which they are
    posted. Security Augmentation Teams (SATs) are also being developed.
    SATs will consist of about 25 personnel who are drawn primarily from
    major urban SWAT units. These SATs will focus on protecting high-value
    sites, including critical chemical facilities, will develop working
    relationships with the site's permanent protective security team, and
    will become familiar with the site's specific vulnerabilities. The PSA
    and SAT programs, still in their early stages and are being actively
    pursued.
        The activities described above in fiscal year 2004 and continued in
    fiscal year 2005 will not only greatly increase chemical site security
    and across all other sectors, but will increase our Nation's general
    protective capacity.

                        INTEGRATED TERRORIST WATCH LIST

        Question. What resources, if any, are being used in fiscal year
    2004 and planned for fiscal year 2005 to integrate lists of terror
    suspects held by different agencies? What is the timeline for having a
    fully functional integrated watch list? What role will IAIP play in the
    Terrorist Screening Center?
        Answer. The Department of Homeland Security is allocating
    approximately $8,000,000 to the Terrorist Screening Center (TSC) for
    fiscal year 2004. In fiscal year 2005, DHS will not contribute funds to
    the TSC, but will provide personnel detailed from DHS to the center.
    Information Analysis and Infrastructure Protection (IAIP) Directorate
    personnel will continue DHS' contribution to this effort by maintaining
    ongoing communication and coordination with the center. The Terrorist
    Screening Center (TSC) is fully operational now. On December 1, 2003
    the TSC began 24/7 call center operations, coordination of the U.S.
    Government response, ensuring information collected was distributed to
    the appropriate entities, and established a process for addressing
    outdated and erroneous terrorist records and misidentifications. The
    database, TSDB, is currently limited to use at the TSC and will undergo
    several enhancements between now and the end of the (calendar) year. At
    that time, agencies will be able to electronically query the TSDB
    directly and get a systematic response within seconds. Because the TSC
    now maintains the terrorist information in the multiple systems used,
    it can ensure all the information appropriate for these systems is
    included.

                                 IAIP STAFFING

        Question. According to information the IAIP directorate provided to
    the subcommittee, only 263 of 729 authorized positions were on board at
    the end of February, 2004. IAIP projects that only 543 positions will
    be filled by the end of fiscal year 2004. It would appear that IAIP
    will be lapsing millions of dollars that Congress approved for
    staffing. Do you intend to send the Committee a plan for reallocating
    these funds? If so, provide a detailed plan for spending these excess
    funds in fiscal year 2004.
        Answer. A memorandum requesting reprogramming/transfer actions has
    been submitted to congressional committees. This request notifies the
    committees that IAIP will redirect $23,500,000 from salaries object
    classes to other object classes for securing space to meet IAIP
    requirements.

                               OBLIGATED FUNDING

        Question. On March 1, the IAIP directorate provided the
    subcommittee with an estimate of $426,077,292, which represented the
    amount of fiscal year 2004 appropriated funds that either have been
    obligated or committed. Please provide the amount obligated versus
    committed. In addition, provide the amount of funding planned to be
    spent via contract in fiscal years 2004 and 2005 versus in-house.
        Answer. As of March 1 (February 29 accounting report), IAIP
    obligations were $199,255,217. The remainder of $226,822,073 was
    commitments on March 1 that are not yet signed contracts. As an update
    to this answer, IAIP obligations as of March 31 were $364,419,840, and
    as of April 30 were $382,475,764.
        All of the IAIP Assessment and Evaluation funding of $711,085,630
    will be spent via contract or intergovernmental payment. In house
    salaries and expenses are in a separate Salaries and Expenses
    appropriation.

                              SUBCOMMITTEE RECESS

        Senator Cochran. Let me thank both of you for your
    cooperation with our subcommittee and your attendance at the
    hearing this morning. We hope that we will continue to be able
    to work closely with you as we work our way through the budget
    process, and that we provide the funds you need to do your job
    and carry out your mission successfully.
        I don't think we have any more important responsibility in
    government than what we're doing here in the Department of
    Homeland Security and in this subcommittee that provides the
    funding for these activities.
        We will stand in recess until the next hearing of our
    subcommittee when we will continue our review of the 2005
    budget request. We will have a hearing on March 9, in this same
    room. Our witness at that time will be the Under Secretary for
    Border and Transportation Security, the Honorable Asa
    Hutchinson.
        Until then we stand in recess.
        [Whereupon, at 11:47 a.m., Tuesday, March 2, the
    subcommittee was recessed, to reconvene at 10 a.m., Tuesday,
    March 9.]

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                             TUESDAY, MARCH 9, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:09 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Thad Cochran (chairman) presiding.
        Present: Senators Cochran, Stevens, Gregg, Byrd, and Leahy.

                        DEPARTMENT OF HOMELAND SECURITY

    STATEMENT OF ASA HUTCHINSON, UNDER SECRETARY, BORDER
                AND TRANSPORTATION SECURITY DIRECTORATE

                   OPENING STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. The hearing will please come to order.
    Today we continue our review of the President's fiscal year
    2005 budget request for the Department of Homeland Security.
    We're specifically considering at this hearing the programs and
    activities within the Border and Transportation Security
    Directorate. Our objective is to provide the resources the
    Border and Transportation Security Directorate requires to
    manage its responsibilities and to carry out its mission
    successfully.
        The President is requesting a total of $14.4 billion in
    discretionary funding for programs and activities managed by
    the directorate, which includes the US VISIT project, Customs
    and Border Protection, Immigration and Customs Enforcement, the
    Transportation Security Administration, and the Federal Law
    Enforcement Training Center.
        I'm pleased to welcome to this hearing the Under Secretary
    for Border and Transportation Security, Mr. Asa Hutchinson.
    Before calling on him, I'm happy to yield to Senator Byrd and
    other senators who may wish to make opening statements. Senator
    Byrd.

                      STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you. Mr. Chairman, you are very kind to
    delay the hearing until I arrived, and I say this with respect
    to the other senators as well. I have a problem some mornings
    in getting to my station on time. I hope that in the future you
    will not delay the hearings on my account. Please go ahead, and
    I will understand. You are always punctual, and I would prefer
    that you not delay hearings on my account.
        Welcome, Mr. Under Secretary. Last week, the Department of
    Homeland Security celebrated its first anniversary. Much has
    been accomplished. The integration and restructuring of the 22
    agencies continues. The hard-working men and women of your
    Department continue to perform their important jobs. But I
    remain concerned that there are real vulnerabilities facing
    this Nation that require immediate responses.
        Last December, Secretary Ridge said, quote, ``The strategic
    indicators, including al Qaeda's continued desire to carry out
    attacks against our homeland, are greater now than at any point
    since September 11th.'' So Mr. Chairman, I would think that the
    Administration would want to address such a threat with a
    robust front line of defense. Yet, as I review the budget, I
    find numerous examples of a defense that relies more on paper,
    more on studies, more on reports, rather than on the layered
    defense that the President and the Secretary often describe in
    their homeland security speeches.
        Let me just give a few examples. More than 5.7 million
    containers are brought into this country each year through our
    ports. Yet, we inspect only 5 percent of these. Most American
    air passengers would be shocked to learn that, while they and
    their baggage are subjected to often rigorous inspections, the
    vast majority of the cargo carried in the belly of the plane in
    which they are flying is not inspected. The Department claims
    that they have a so-called known-shipper program that is secure
    for air cargo, but this is a paper process. TSA personnel
    review paperwork from the shippers rather than the actual
    cargo.
        TSA has yet to even initiate a pilot program for air cargo
    inspection. We approved funds last September to hire 100 air
    cargo inspectors to carry out real inspections and yet, 6
    months later, very few inspectors have been hired.
        On January 5, 2004, the new visa tracking system known as
    US VISIT began operations at 115 airports and 14 seaports. As
    envisioned when first mandated in 1996, this system is supposed
    to track the entry and exit of visa holders and other visitors
    to our country. It has been declared a success by the
    Department, except few realize that, while we are capturing
    data on people entering this country at the 115 airports, we
    are getting voluntary information on people exiting the United
    States at only one airport. We need to do a better job in order
    to know exactly who is exiting, as well as entering, the United
    States.
        At the same time, we need to ensure that sufficient funds
    are provided to integrate the various existing biometric
    databases. We need to make sure that the US VISIT system and
    the Border Patrol IDENT system are compatible with the FBI's
    Integrated Automated Fingerprint Identification System.
        Last year, pursuant to the Maritime Transportation Security
    Act, U.S. ports were required to submit security plans to the
    Department. But to actually make this country safer, money must
    be provided to help the ports implement those plans. Instead,
    the President is proposing to cut port security grant funding
    by over 60 percent.
        The Federal Air Marshal Service did not have sufficient
    resources this year to maintain the number of air marshals on
    targeted domestic and international flights, and because the
    Administration has proposed no increase for next year, a bad
    problem could become worse next year.
        I want to make sure that this subcommittee and this
    Congress provide real homeland security to the American people,
    not just assurances on paper. The President has told his
    agencies not to seek supplemental appropriations this year, but
    I don't think that homeland security can wait. To this end I
    will be sending a letter to the Secretary today urging him to
    propose a reallocation of existing resources from nonessential
    pay accounts to increase funding for port security grants and
    for the Federal Air Marshals Program right away. I will be
    discussing these issues today and I'm looking forward to
    hearing from our witness on these and other issues.
        Thank you, Mr. Chairman.
        Senator Cochran. Thank you, Senator Byrd. Senator Leahy.

                     STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you, Mr. Chairman. I know I've served
    with both of you for well over a quarter of a century on this
    committee, and I couldn't help but think at the beginning of
    it, it's nice to know that there are a few of us who still show
    senatorial courtesies, and both the senior senator from
    Mississippi and the senior senator from West Virginia
    constantly show those courtesies, and I appreciate that.
        Mr. Secretary, I enjoyed chatting with you this morning
    earlier. Sometimes people forget that, along with all the
    serious matters, we have even more serious matters, like how
    are the children, how are the grandchildren, and a lot of
    things like that to catch up on. And of course, I see the Under
    Secretary both in this committee and also in the Judiciary
    Committee. And I told you before, you have one of the most
    challenging jobs in the Department of Homeland Security, and I
    am grateful for your accessibility to Congress during the
    Department's first year. There were some who thought when you
    formed the new department you would no longer want to be
    accessible, and I think your own experience here on the Hill
    does you well, because you have always been accessible.
        I told you when you first took the job you were lucky
    because you would be inheriting a number of fine employees in
    my home State of Vermont where we have a very substantial
    presence. You told me at that time you would make good use of
    them, and you have kept your word. I am particularly pleased
    that you and Michael Garcia, who also traveled with you to
    Vermont, have recognized the tremendous value of the Law
    Enforcement Support Center, LESC, in South Burlington, Vermont.
    This LESC provides information to State and local police
    departments throughout the Nation regarding immigration status
    and identities of aliens suspected, arrested or convicted of
    criminal activity, and operates 24 hours a day 7 days a week.
        I was over there after a large snowfall and someone said,
    what do you do in a case like this where you have close to 3
    feet of snow that fell in the last 24 hours. And they said,
    well, you know, what do you do about getting to work? And they
    said what do you mean, this shift comes in at this time and
    this shift comes in at this time. I think it took them a while
    to realize that the people from out of State were asking what
    do you do about the snow. Well, you shovel it and you go to
    work. But, the other thing that was most interesting was that
    they accept the dedication and responsibility for the country,
    and I know it makes me very happy and I'm sure it does you and
    the others.
        I joined Mr. Garcia last August to announce expanding
    capabilities in the LESC and I look forward to continue working
    on this project.
        I have a couple concerns and I will submit some questions
    on the record. I'm concerned about the Department's response to
    those who fled Haiti in recent weeks. I think Haitians
    intercepted at sea receive entirely different screening. All
    interdicted Cubans are individually interviewed regarding fear
    of persecution. I understand that only those Haitians who
    loudly protest, the so-called shout test, receive such an
    interview. And when you see on the television news every night
    Haitians being shot down in the street, you have to have some
    concern. I understand also the Department intends to continue
    regular deportation proceedings against Haitians in the United
    States, notwithstanding the strife and basic lack of law and
    order in Haiti. I join with Senators Kennedy and Durbin and
    will have some questions on that.
        Secondly, I know Congress has set an October deadline for
    Nations who take part in the visa waiver program to include
    biometric identifiers in their passports. It is a very helpful
    thing to have but I understand that only a small handful of the
    27 countries that are participating in the program are expected
    to meet the deadline. As a result, visitors from these
    countries will need to either obtain visas, which would
    dramatically increase the workload here and abroad for our
    officials and certainly would dramatically impact tourism, and
    might lead to reciprocal action against American travelers. One
    of my questions will be whether we should extend that deadline,
    or whether you think such an extension would compromise our
    security.
        And lastly, I know that you're working to meet another
    deadline that Congress has established, the December 31st
    deadline for screening travelers in our 50 busiest land port of
    entries. Many worry whether that can be done, and whatever you
    want to add on to that I would appreciate.
        Mr. Chairman, as I mentioned, very soon I have to go to
    another committee, but again, the Under Secretary has always
    been responsive in questions and so with your permission, I
    will insert something for the record.
        Senator Cochran. Without objection, it will be printed in
    the record. We appreciate you being here and your work for this
    committee.
        The subcommittee has received statements from Senators
    Campbell and Hollings which will be placed in the record.
        [The statements follow:]

             Prepared Statement of Senator Ben Nighthorse Campbell

        Thank you Mr. Chairman and I'd like to thank our witnesses for
    taking the time to come talk to us today.
        My constituents and the entire Nation are looking to this Committee
    to provide the necessary funds to protect those who travel our
    country's skies, seas, rails, and roads. It is your directorate that is
    responsible for making sure that law enforcement officials and first
    responders have the technology they need to ensure our country's
    safety.
        This country is the world leader in technology development and that
    is to our advantage when protecting the nation. But as I fly back to
    Colorado every weekend, and wait in line at the baggage screeners and
    walk through the metal detectors, I wonder if these procedures really
    ensure my safety. I wonder if we are really using the best technology
    available.
        Colorado is the home of many small technology companies that, in my
    view, have developed a number of cost-effective, time saving, and life
    saving technologies that I am certain have not yet gotten into the
    right hands. I have done my best to send them to meet with your
    directorate, but I don't know the extent of their success. I hope that
    you will elaborate on how you work with small technology firms.
        I also know that with some of the technology chosen, that you are
    doing your best to watch the bottom line. But when you are doing the
    job of equipping those who protect us, shouldn't they have the best
    technology available, not just the cheapest?
        I support every dollar that Congress has given to the Department of
    Homeland Security. I believe that we have made great advancements
    quickly by upgrading security procedures, response plans, and better
    training personnel to react and respond in times of need. But I think
    that we need to pay more attention to whether this money is being put
    to the best use possible.
        Again, thank you, Mr. Chairman. I look forward to hearing the
    testimonies of our guests and I will have a number of questions to ask
    at the appropriate time.
                                     ______

                Prepared Statement of Senator Ernest F. Hollings

        I am pleased that the Department of Homeland Security has taken
    administrative control of the Federal training facility in Charleston.
    As you know, a temporary overflow training facility for basic training
    of Border Patrol recruits started in 1996 at the old Navy Base in
    Charleston. Legislation we passed here in Congress drastically
    increased the Border Patrol training needs, as it significantly
    increase the number of agents deployed to protect our borders. The
    Charleston facility was due to close in 2004, but through the fiscal
    year 2003 Commerce, Justice and State Appropriations Bill, we
    officially designated Charleston as a permanent Federal training
    center.
        We also secured funding--over $14 million--for the Charleston
    Border Patrol Academy to improve the infrastructure for the training
    center. After we committed to these improvements, the Department of
    Homeland Security took ownership of the facility through the Federal
    Law Enforcement Training Center (FLETC), which suited me.
        After a year of cooperation, coordination and our support the Coast
    Guard Maritime Law Enforcement Academy was officially established in
    February 2004 at FLETC-Charleston by the Coast Guard Commandant. We
    have been able to direct some important functions to Charleston, and
    this is one of them.

        Senator Cochran. Mr. Secretary, we have your prepared
    statement, which we appreciate your submitting to the
    committee. It will be printed in the hearing record, and we
    invite you to make any remarks you think will be helpful to the
    committee's understanding of this budget request. You may
    proceed.

                  STATEMENT OF UNDER SECRETARY ASA HUTCHINSON

        Mr. Hutchinson. Thank you, Mr. Chairman, and Senators Byrd
    and Leahy, thank you for your gracious comments this morning.
    We appreciate what I view as a partnership with this committee,
    your counsel, advice, and admonitions from time to time are
    helpful, and certainly we receive those with appreciation. I
    also want to thank the committee for most recently approving
    the US VISIT fiscal year 2004 spend plan that allows us to move
    forward. Thank you for your prompt action on that request and
    again, the admonitions that you gave.
        With your support, I believe we have made some significant
    progress toward meeting our congressional mandates for homeland
    security and for meeting the expectations of the American
    people. The $16 billion budget request for BTS marks a 10
    percent increase over the 2004 budget and is a reflection of
    this President's commitment to border security, transportation
    security, and other areas of enforcement within my arena.
        BTS, as you know, has a number of agencies within it. It
    comprises the largest directorate with 110,000 employees that
    are doing an outstanding job day in and day out. If you look
    back over the last year, one of the major initiatives that we
    have carried out would be strengthening our border security
    through the one face at the border initiative--training
    officers to perform three formerly separate inspection
    functions. We've also expanded the container security
    initiative, and the Customs-Trade Partnership Against Terrorism
    program provides security in the global supply chain.
        I believe that we have increased the safety of air travel
    by increasing the effectiveness of the Federal Air Marshal
    program, establishing a Federal flight deck officer program,
    increasing the baggage screening efforts, developing a
    comprehensive air cargo security plan, and new requirements in
    that regard. We have developed new technologies such as US
    VISIT and the SEVIS, or the program that identifies and tracks
    foreign visitors and students. We have pursued and increased
    our investigatory capabilities for identifying, apprehending
    and removing those who violate our immigration laws, illegally
    employ undocumented workers, and traffic in human cargo.
        So, we have done a number of things through the last year,
    including increasing our training capabilities through the
    Federal Law Enforcement Training Center. If you look at the
    2005 budget that the President has submitted, it continues to
    build upon this foundation by increasing our efforts to secure
    our borders and our transportation systems.
        Under the Customs and Border Protection budget we seek an
    overall increase of $223 million, including a $25 million
    increase for the container security initiative that allows us
    to do a more expansive job of prescreening cargo before it
    reaches our shores. It provides for a $15 million increase in
    the Customs-Trade Partnership Against Terrorism program. A $20
    million increase for improvements in the National Targeting
    Center, which has been a very effective risk assessment tool
    for arriving international air passengers and shipment of goods
    to our country. Our US VISIT program will continue to work to
    complete the first increment of US VISIT, as well as expand its
    capabilities to the 50 busiest land ports, and the budget that
    has been submitted for fiscal year 2005 is consistent with the
    development of that program.
        To date, the program has had a significant amount of
    success in increased security with 125 criminal watch list
    alerts, 51 criminal apprehensions, and we have processed over 2
    million visitors since January 5.
        Across BTS agencies over $100 million has been requested
    for detection systems between our ports of entry, including
    expansion of the P-3 aircraft which provide important detection
    and monitoring capabilities. We've continued to build on our
    aviation security with a TSA budget that has an increase of
    $892 million, which is 20 percent over the comparable 2004
    level, and includes $20 million for credentialing systems such
    as the transportation worker identification card, hazardous
    materials transporters, and foreign student pilots. It includes
    funding for the CAPP II program and very importantly, $159
    million to enhance the training programs for our screener
    personnel.
        I'm very pleased with the submission on the ICE budget that
    provides an increase of $300 million over 2004 that will allow
    us to enhance our enforcement efforts, including $10 million to
    support the new Visa Security Unit program that will help us
    overseas to add a security perspective to the visa issuance in
    working with the State Department. We've enhanced by $23
    million our capability for investigations performed by special
    agents devoted to immigration enforcement, including
    establishing stronger work site enforcement, consistent with
    the President's proposal for a temporary worker program. It
    also includes $100 million for increase in detention and
    removal of illegal aliens, a very important part of our
    efforts.

                               PREPARED STATEMENT

        Finally, the Department's infrastructure is supported by
    the investment in the Federal Law Enforcement Training Center
    to support our security and training programs, not just for
    homeland security agencies, but for a broader range of Federal
    law enforcement agencies that utilize its services. The budget
    request provides for a $5 million increase in funding for that
    agency.
        So with that outline, Mr. Chairman, I look forward to the
    discussion this morning and look forward to the continued
    cooperation with this committee.
        [The statement follows:]

                      Prepared Statement of Asa Hutchinson

        Mr. Chairman, Senator Byrd and Members of the Subcommittee: I am
    honored and pleased to appear before the Committee to present the
    President's fiscal year 2005 budget for the Border and Transportation
    Security (BTS) Directorate. I want to thank you for your strong support
    of BTS components, especially for the resources you provided in fiscal
    year 2004, and look forward to working with you in the coming months on
    our fiscal year 2005 budget.
        The $16 billion BTS request represents a 10 percent increase in
    resources over the comparable fiscal year 2004 budget, and reflects the
    Department's strong and continued commitment to the security of our
    homeland. The fiscal year 2005 budget is a $1.5 billion increase over
    fiscal year 2004, and it includes funding for new and expanded programs
    in border and port security, transportation security, immigration
    enforcement, and training.
        The Border and Transportation Security Directorate made great
    strides during the first year of operations. Over 110,000 employees and
    a budget of $14 billion were reassembled and brought under BTS. The
    Directorate was quickly established and successfully began operations
    on March 1, 2003--bringing together the legacy agencies and programs
    that now make up BTS--Customs and Border Protection (CBP), Immigration
    and Customs Enforcement (ICE), Transportation Security Administration
    (TSA), Federal Law Enforcement Training Center (FLETC), and the United
    States Visitor and Immigrant Status Indicator Technology (US VISIT)
    program. Customs, border, immigration, transportation security and
    training activities have been rejuvenated under their new agencies,
    increasing the effectiveness of our dedicated employees. BTS continues
    to create new ways to enhance security by sharing information and
    intelligence and by coordinating operations within the Department among
    levels of governments, and horizontally across agencies and
    jurisdictions. Through the hard work of our dedicated and talented
    employees, America is more secure and better prepared than we were 1
    year ago.
        In addition to the stand-up of the Directorate, we have achieved
    many results since our creation, including:
      --providing fused and enhanced security coordination among our
            components and other Federal, State and local security
            providers and stakeholders, especially during Operation Liberty
            Shield and the recent holiday season, including the
            establishment of the Transportation Security Coordination
            Center (TSCC) to coordinate intelligence sharing and command
            and control activities for our national transportation sector;
      --strengthening border security through the ``One face at the
            border'' initiative, which is cross-training officers to
            perform three formerly separate inspections--immigration,
            customs, and agriculture--allowing us to target our resources
            toward higher risk travelers;
      --expanding the container security initiative (CSI) and Customs-Trade
            Partnership Against Terrorism (C-TPAT) to provide improved
            security to the global supply chain;
      --instituting new cutting edge systems, like US VISIT, to identify
            and track foreign visitors and students, recording the entry
            and exit of foreign visitors to strengthen our immigration
            system;
      --safeguarding air travel from the terrorist threat by: increasing
            the presence of Federal Air Marshals, establishing a Federal
            Flight Desk Officer program, instituting 100 percent checked
            baggage screening, issuing new regulations for enhanced air
            cargo security, expanding the use of explosives detection
            canine teams, checking names of master cockpit air crew lists,
            and streamlining and training Federal passenger and baggage
            screeners deployed at airports across the Nation;
      --eliminating potential weaknesses in security by suspending transits
            without visa (TWOV);
      --negotiating an agreement with the European Union with respect to
            Passenger Name Record (PNR);
      --negotiating a memorandum of understanding with the Department of
            State to ensure a coordinated and increasingly effective visa
            issuance process; and
      --establishing a visa security office to provide oversight and
            guidance on Section 428 of the Homeland Security Act, including
            establishing two offices in Saudi Arabia to review 100 percent
            of visa applications;
      --standing up a SEVIS tiger team to process foreign students during
            the summer 2003 back-to-school season; and
      --effecting improvements in security capabilities, capacity,
            training, and infrastructure.

    Fiscal Year 2005 Budget Request
        The fiscal year 2005 budget for the Directorate builds upon the
    significant investments and accomplishments effected and in progress.

    Strengthening Border and Port Security
        Securing our border and transportation systems continues to be an
    enormous challenge. Ports-of-entry (POE) into the United States stretch
    across 7,500 miles of land border between the United States and Mexico
    and Canada, 95,000 miles of shoreline and navigable rivers, and an
    exclusive economic zone of 3.4 million square miles. Each year more
    than 500 million people, 130 million motor vehicles, 2.5 million
    railcars, and 5.7 million cargo containers must be processed at the
    border and POE.
        In fiscal year 2003, CBP processed 412.8 million passengers and
    pedestrians arriving in the United States--327 million at land borders,
    70.8 million at international airports, and 15 million at sea ports.
    The fiscal year 2005 CBP budget seeks $2.7 billion for border security
    inspections and trade facilitation at ports of entry and $1.8 billion
    for border security and control between ports of entry.
        During fiscal year 2005, we will continue to strengthen our border
    and port security. The CBP budget seeks an overall increase of $223
    million to maintain and enhance border and port security activities,
    including the expansion of pre-screening cargo containers in high-risk
    areas and the detection of individuals attempting to enter the United
    States illegally.
        Specifically, the budget includes an increase of $25 million for
    the Container Security Initiative (CSI) which focuses on pre-screening
    cargo before it reaches our shores, and an increase of $15.2 million
    for Customs Trade Partnership Against Terrorism (C-TPAT). C-TPAT
    focuses on partnerships all along the entire supply chain, from the
    factory floor, to foreign vendors, to land borders and seaports. As of
    late January 2004, nearly 3,000 importers, 600 carriers, and 1,000
    brokers and freight forwarders are participating in C-TPAT, surpassing
    the Department's original goal of participation of the top 1,000
    importers.
        As well as continuing development for secure trade programs, the
    budget also seeks an increase of $20.6 million to support improvements
    for the National Targeting Center and for multiple targeting systems
    that focus on people, cargo and conveyances. These systems use
    information from diverse sources to provide automated risk assessments
    for arriving international air passengers, shipments of goods to our
    country, and land border passenger traffic.
        The United States Visitor and Immigrant Status Indicator Technology
    (US VISIT) program's goals are to enhance the security of our citizens
    and our visitors; facilitate legitimate travel and trade across our
    borders; ensure the integrity of our immigration system; and respect
    the privacy of our welcomed visitors. US VISIT represents a major
    milestone in our efforts to reform our borders. We deployed the first
    increment of US VISIT on time, on budget, and met the mandates
    established by Congress, including biometric capabilities ahead of
    schedule. The budget seeks a total of $340 million in fiscal year 2005,
    an increase of $12 million over the fiscal year 2004 level for the
    program. As of late February, over 1.5 million foreign nationals had
    been processed for entry, generating 125 watch list alerts, and
    resulting in 51 criminals apprehended. The 2005 funding will further
    strengthen border security, and enable modernization of border
    management systems and capabilities. Specifically, funding will be used
    to expand the entry system to 115 land POEs, beyond the busiest 50 that
    will be covered by the US VISIT program in fiscal year 2004. Funding
    will also be used to expand implementation of an exit solution at our
    air and seaports. Alternatives are being developed and tested, and will
    be implemented at 80 airports and 14 seaports in fiscal year 2004.
        Within the BTS component budgets, over $100 million is included for
    detection systems, a critical element in the war on terrorism. The CBP
    budget seeks an increase of $64.2 million to enhance land-based
    detection and monitoring of movement between ports, and $10 million to
    deploy and operate unmanned aerial vehicles. In order to protect the
    homeland against radiological threats, the CBP budget seeks $50 million
    for radiation detection monitors and equipment. The ICE budget request
    includes an increase of $28 million to increase the flight hours of P-3
    aircraft by 200 percent. In addition to providing vital detection and
    monitoring capabilities in the source and transit zones containing
    mountainous terrain, thick jungles and large expanses of water, the P-3
    provides an important capability for domestic airspace security
    missions.

    Improving Aviation Security
        We have made great strides in rebuilding and reinvigorating of our
    aviation transportation security system. We have made significant
    investments in baggage screening technology--over $2 billion to
    purchase and install Explosives Detection Systems machines (EDS) and
    Explosives Trace Detection machines (ETD) to the nation's airports--and
    established a robust technology research and development program. We
    have deployed 45,000 Federal passenger and baggage screeners at the
    Nation's airports, expanded the National Explosives Detection Canine
    Team program, and trained pilots to be Federal Flight Deck Officers.
        The fiscal year 2005 TSA budget seeks an increase of $892 million
    to enhance transportation security, a 20 percent increase over the
    comparable fiscal year 2004 level. Specifically, to strengthen
    interwoven, concentric layers of transportation security, the budget
    requests increases of $20 million for credentialing systems (i.e.,
    Transportation Worker Identification Credential, Hazardous Materials
    transporters, and foreign student pilots); $25 million for operating
    the Computer Assisted Passenger Prescreening II System; and $113
    million to and improve screener performance through training and the
    deployment of information technology. A substantially improved air
    cargo security and screening program was implemented last year, and the
    $85 million request sustains funding to continue program enhancements
    and associated air cargo screening technology research and development.
    We are providing another $400 million for EDS equipment to improve
    airport operational efficiency.

    Enhancing Immigration Security and Enforcement
        The ICE budget request of $4 billion, which is an increase of $300
    million over the fiscal year 2004 level, seeks to strengthen
    immigration security and enforcement. Comprehensive immigration
    security and enforcement extends beyond efforts at and between the
    ports-of-entry into the United States. It extends overseas, to keep
    unwelcome persons from arriving in our country, and removing persons
    now illegally residing in the United States. Pursuant to section 428 of
    the Homeland Security Act, and the Memorandum of Understanding between
    the Departments of Homeland Security and State, the ICE fiscal year
    2005 budget request of $14 million includes an increase of $10 million
    to support a new visa security unit (VSU). The BTS personnel stationed
    at overseas posts, including Saudi Arabia, will continue to work
    cooperatively with U.S. Consular Officials to enhance security and the
    integrity of the visa process.
        As announced on January 7, 2004, the Administration is committed to
    enhanced immigration integrity and border security. My Directorate will
    be working to implement a program that meets those goals, while
    benefiting the economy. Current ICE immigration enforcement programs
    and the enhancements in the fiscal year 2005 ICE budget request support
    and are consistent with a number of elements in this initiative,
    particularly worksite enforcement. Specifically, the fiscal year 2005
    request includes an increase of $23 million to more than double the
    number of investigations currently performed by ICE--providing an
    additional 200 investigators. With these resources, ICE will be able to
    facilitate the implementation of the President's temporary worker
    program initiative by establishing a traditional worksite enforcement
    program that offers credible deterrence to the hiring of unauthorized
    workers.
        The request also includes nearly a $100 million increase for the
    detention and removal of illegal aliens. Detention and Removal of
    illegal aliens present in the United States is critical to the
    enforcement of our immigration laws, and the requested funding will
    expand ongoing fugitive apprehension efforts, the removal from the
    United States of jailed illegal aliens, and additional detention and
    removal capacity.
        As part of our overall immigration enforcement strategy, ICE will
    continue to analyze data generated through the Student and Exchange
    Visitor Information System (SEVIS) and US VISIT program to detect
    individuals who are in violation of the Nation's immigration laws and
    pose a threat to homeland security. The fiscal year 2005 budget
    requests $16 million to support these compliance efforts.
        Immigration fraud poses a severe threat to national security and
    public safety because it enables terrorists, criminals, and illegal
    aliens to gain entry and remain in the United States. An aggressive,
    focused, and comprehensive investigations and prosecutions program will
    detect, combat and deter immigration fraud. The $25 million included in
    the fiscal year 2005 budget will provide stable funding to the benefits
    fraud program by replacing funding previously provided through the
    Immigration Examinations Fee Account.

    Building Departmental Infrastructure
        The fiscal year 2005 request includes an increase of $5 million for
    the Federal Law Enforcement Training Center to support our security
    program enhancements and capability sustainment. The FLETC not only
    serves Federal client groups, but also provides training to State and
    local law enforcement providers. In addition, to enhance global law
    enforcement efforts, FLETC develops and offers a curriculum that
    includes international applications.
    Conclusion
        Our homeland is safer and more secure than it was a year ago,
    thanks in part to the dedicated and talented team we have in BTS which
    excels at coordinating and effecting cross-component activities.
    Through their efforts, and with the support of our partners in
    government and the public and private sectors, we will continue to
    substantially improve our nation's security. I thank the Congress for
    its support, which has been critical to bringing us to this point. With
    your continued support for our fiscal year 2005 budget, we will
    continue to improve the security of our nation.
        I am grateful to be here today to outline our efforts for a safer
    and more secure America. Thank you for inviting me to appear before you
    today, and I look forward to answering your questions.

                                    US VISIT

        Senator Cochran. Thank you very much, Mr. Secretary.
        Last week President Bush met with President Vicente Fox of
    Mexico and announced that citizens of Mexico who hold border
    crossing cards and are frequent visitors will not have each
    entry recorded into the US VISIT database. Can you tell us more
    about how this new policy will be implemented by your
    directorate?
        Mr. Hutchinson. Thank you, Mr. Chairman. I would emphasize
    that for those who have a border crossing card, we already have
    their fingerprints in our database and they have undergone a
    terrorist screen or a security screen in order to be able to
    receive this border crossing card. And, if they would utilize
    this card for long-term visa purposes they would be enrolled in
    US VISIT just like our visitors are at the airports. It will
    take us a little bit longer to develop a program in which we
    can record each entry and exit and we hope to utilize radio
    frequency technology to pilot and to develop that capability.
    Our concern, of course, would be that with over 100 million
    crossings of Mexicans using this laser visa or border crossing
    card, it would be difficult to enroll each one of them in US
    VISIT under the current circumstances. So, that is the
    consideration for not tracking them in that fashion but rather,
    using it as we have at our airports and seaports, for those who
    would utilize it as a regular visa to stay in our country for a
    longer period of time.
        Senator Cochran. The budget states that an exit capability
    is expected to be deployed at up to 80 airports and 14 seaports
    this year. Can you give us a report on the exit pilots that are
    currently running as a part of US VISIT?
        Mr. Hutchinson. Yes, Mr. Chairman, and before I answer that
    specifically, I want to emphasize that we have an exit
    capability for all our airports and seaports through the APID
    or advanced passenger information database, transmitted from
    the airlines. So, we have a record of the departure of those
    people who would be foreign citizens leaving our country.
    Therefore, we could track whether they have overstayed their
    visas or not. So we have that capability biographically. What
    we are piloting in the Baltimore International Airport is an
    exit capability that will also biometrically confirm their
    departure from this country.
        It is being piloted in Baltimore and thus far, it has been
    a very successful program. I heard testimony from the airport
    director there who applauds the program and the cooperation we
    have had, and particularly the fact that we have personnel
    there that will help a foreign visitor to utilize the system.
        We are piloting other different ways to implement an exit
    procedure. Those will be developed and put into place by June
    of this year, so by the end of this year we hope to have a
    complete evaluation of what is the best exit procedure for our
    airports that would expand upon our current biographical
    capability.
        Senator Cochran. The US VISIT program office is reviewing
    the proposals for the prime integration contract. What are the
    plans to meet the deadline for deploying the entry and exit
    capabilities to the 50 busiest land ports by the end of this
    calendar year?
        Mr. Hutchinson. We do anticipate that the integrator
    contract would be awarded in the May time frame. That still
    leaves us a significant amount of time to utilize their
    capabilities. But in the meantime, through our US VISIT program
    office we're able to continue to deploy to the 50 busiest land
    ports our exit solution that would be used as secondary,
    similar to what we're doing at our airports. And so a great
    deal of work can be done to fulfill the mandate this year even
    before the integrator is brought on board. What they will
    primarily focus on would be looking at the radio frequency
    technology and how that can be used to quickly track the entry
    and exit without clogging those borders. We have some
    preliminary ideas, but the integrator support will be very
    critical in developing a final solution on that.
        Senator Cochran. Senator Byrd, I'm prepared to yield to you
    for any questions you have. I noticed the presence of the
    distinguished senator from New Hampshire. Before proceeding, I
    was wondering if you could yield to him for any opening
    statement.
        Senator Byrd. Yes, I would like to hear his opening
    statement.
        Senator Gregg. I have no opening statement, Mr. Chairman.
        Senator Cochran. Senator Byrd.

                                      TSA

        Senator Byrd. Thank you. Mr. Secretary, your TSA budget
    proposal for 2005 requests just $143 million out of a total
    request of $5 billion for non-aviation related activities. The
    Aviation and Transportation Security Act requires that the TSA
    protect all modes of transportation, not just aviation. Take
    mass transit for an example.
        On February 6, individuals opposed to policies of the
    Russian government exploded a bomb deep inside a tunnel of the
    Moscow subway system, killing more than 40 people. The Tokyo
    subway was attacked with sarin gas in 1995. Subsequent analysis
    of the attack concluded that up to 8,000 deaths could have
    occurred if the attack had been executed as planned. We should
    not focus all of our attention on the threats posed by the 9/11
    attacks. There continues to be significant threats to the New
    York City Subway System, the Washington Metro, the Chicago
    Transit Authority, and other mass transit systems.
        In testimony to the Senate Intelligence Committee on
    February 24, FBI Director Mueller stated that our
    transportation systems across the country, particularly the
    subways and bridges in major cities, as well as airlines, have
    been a continual focus of al Qaeda targeting. Despite this
    reality, there is a huge disparity between what you have
    requested for aviation, compared to what you have requested for
    the other modes of transportation.
        You have made no proposal for mass transit security grants,
    no request for bus security grants, no request for truck
    security grants, and port security grants, have been reduced
    from the $124 million which Congress provided to only $46
    million, and the Department proposed to transfer away from TSA
    that remaining grant program to an agency with no
    transportation security expertise.
        Now, how can you fulfill the mandate of protecting all
    modes of transportation without requesting funds for this
    purpose? Given what you are proposing, how do you intend to be
    accountable to the American people for ensuring transportation
    security?
        Mr. Hutchinson. Thank you, Senator Byrd, and we agree with
    your concerns about the other modes of transportation and that
    they should not be neglected. We are looking at a different
    type of relationship and solution for the other modes of
    transportation versus our 100 percent inspection regime, a
    focus in aviation security. And so at TSA, we do have a
    relationship with the different modes of transportation. We are
    working on assessments and standards setting. We're working
    with other directorates and other agencies to accomplish the
    security that you highlighted.
        For example, the subways, that is a transportation system
    with a number of players in that arena, including the IAIP
    directorate, or Information Analysis and Infrastructure
    Protection directorate, and our Science and Technology
    directorate, looking for some technological solutions to help
    detect and prevent those type of harmful attacks. And so we are
    coordinating our efforts with them, as well as working with our
    TSA officials who have that standard setting responsibility. We
    will continue to develop that relationship and seek additional
    funding as is necessary to expand that mission.
        Senator Byrd. Mr. Secretary, you haven't answered my
    question. I'm concerned about the lack of funding for the
    security of those other modes of transportation. I listened
    very carefully, but I didn't get an answer to my question.
        Mr. Hutchinson. Would you like me to proceed again, Senator
    Byrd?
        Senator Byrd. Yes. Would you like me to ask the question
    again?
        Mr. Hutchinson. I think I got the gist of the question. We
    have a staff at headquarters of 120 inspectors. They are
    charged with the responsibility of looking at these other modes
    of transportation, working with local communities, setting
    standards for them, and working with other agencies--for
    example, the Department of Transportation. We are protoneuron
    with the industry stakeholders as well for information sharing
    with regards to threats to these different modes of
    transportation. We are looking to the Science and Technology
    Directorate to identify the security threat and developing the
    technology that would help detect those hazardous materials
    threats to our subway systems. And the same is true for the
    other modes of transportation that you mentioned.
        Senator Byrd. I don't think I got the answer yet. I'll ask
    the question again. You may not want to answer it, and I say
    this respectfully to you.
        Your TSA budget proposal for fiscal year 2005 requests only
    $143 million out of a total request of $5 billion for non-
    aviation related activities. The Aviation and Transportation
    Security Act requires the TSA to protect all modes of
    transportation, not just aviation. How can you fulfill the
    mandate of protecting all modes of transportation without
    requesting funds for this purpose? Given what you are
    proposing, how do you intend to be accountable to the American
    people for ensuring transportation security?
        I believe it is a mistake to weaken the non-aviation
    functions of TSA. On February 25, Congressman Sabo and I wrote
    to Secretary Ridge and urged him not to transfer the TSA grant
    programs, port security grants, truck security grants, bus
    security grants, and Operation Safe Commerce, as well as FEMA's
    Emergency Management Performance grants from TSA to the offices
    of State and local government coordination. The deadline for
    making that transfer could be as early as March 26th, and I
    want to personally make the same points to you. I urge you and
    the Secretary to give serious consideration to the concerns
    expressed in our letters.
        Mr. Hutchinson. And Senator Byrd, I very respectfully agree
    with your concerns and clearly you could look at this as a
    comprehensive solution to security, we're looking at a shared
    responsibility in that regard, and not exclusively that of TSA.
    And we are still sorting through some of that division of
    responsibility. But we believe that the budget allows
    sufficient support from a headquarters level of the standard
    setting, the regulations that need to be looked at, and the
    partnership that we might have with the Department of
    Transportation and with the Coast Guard, who has a major role
    in the mission of port security.
        Now, I realize that there has been some concern expressed
    about the transfer of the grant programs from TSA to the State
    and local administration within the Department, but I have been
    assured and feel confident that we are implementing the steps
    necessary to make sure that the TSA expertise on port security
    is utilized for the administration of those grants.
        Senator Byrd. Mr. Chairman, may I ask another question at
    this point or do you wish to proceed?
        Senator Cochran. Senator Byrd, we've taken up just about
    between 10 and 15 minutes in this round, and I was going to
    recognize Senator Gregg for any questions, and then we have a
    chance for another round.
        Senator Byrd. Thank you.
        Senator Cochran. Senator Gregg.

                                    US VISIT

        Senator Gregg. Thank you, Mr. Chairman, and thank you,
    Senator Byrd, for your courtesy. Mr. Secretary, the US VISIT
    program is obviously the core to your effort to try to get some
    control over who's coming into the country and you have already
    explained the program. As I understand the program, basically
    there will be two fingerprints taken, the thumb and----
        Mr. Hutchinson. Two index.
        Senator Gregg. The index fingers of both hands, and that
    will be electronically and digitally taken. And here's my
    question. We spent in another committee, CJS, which I chair,
    and it's a fabulous facility up in West Virginia, a huge amount
    of money, literally hundreds of millions if not billions of
    dollars on developing a fingerprint database for the Nation
    called IAFIS, which is under the control of the FBI. It's my
    understanding that the US VISIT fingerprints will not be
    compatible with that database, that the manner in which the
    fingerprints are being taken is not compatible, without a
    significant amount of increased work load. In other words, the
    turnaround time on an IAFIS fingerprint is very brief. If
    you're fingerprinted under the IAFIS system it's almost an
    instantaneous turnaround time. If you're fingerprinted under
    your system it's 35 times longer, assuming you can do the
    workload at all to get that fingerprint confirmation back, and
    really the two systems aren't compatible, they simply aren't
    compatible.
        I guess my question to you is why would we set up--I can
    understand that you don't want to make getting into and out of
    the country too complicated and that's why you probably went to
    the two-finger fingerprinting and a flat screen versus a rolled
    approach, which is what the IAFIS was built on. But why did we
    spend all this money to create this database if you folks
    aren't going to structure a system that takes advantage of it?
        Mr. Hutchinson. Thank you, Senator Gregg. And first, I have
    had numerous conversations with the FBI and the head of their
    fingerprint division, and we certainly want to move in
    coordination with each other. But for example, the IAFIS system
    has 44 million prints in it, most of them of U.S. citizens,
    many of them whose crimes have expired, and just a whole host
    of reasons that they might be in there. As our US VISIT program
    is developed, it is not designed for U.S. citizens but for
    foreign visitors. So we take a slice of what is in the IAFIS
    database and put it in our IDENT system so that it can be
    checked, so there is that limited capability. Now as we expand
    our program, hopefully there will be more connectivity there.
        But in addition right now, to connect to IAFIS you have to
    have 10 rolled prints, and we cannot have 10 rolled prints at
    our ports of entry because of processing time as people come
    in. As the technology develops so that we can perhaps have 10
    or 8 scanned prints in a quick fashion, then we hope to be able
    to gravitate to that, so we can then interconnect with the
    IAFIS. But it is a problem not just for the US VISIT, but also
    the State Department, because they have deployed technology
    overseas for the two index fingers since that was the agreement
    between the Attorney General, the Secretary of State, and the
    Secretary of Homeland Security.
        So it is a process issue because of the time constraints.
    It is a systems issue in terms of what it takes to interact
    with the IAFIS program. And it's a technology problem that we
    hope technology will be able to help us with in the coming
    years. In terms of the processing time, it takes us 8 seconds
    for our two digital fingerprints to get a response from our
    system. It would not be any different if we were connecting it
    to the IAFIS system. And if there is a question where we
    connect with secondary, where we can connect with IAFIS, we can
    take the rolled prints as to any additional information that we
    need from them.
        Senator Gregg. What you're saying is that we're building
    from scratch a new system which is going to be essentially
    independent of IAFIS in that they won't be able to access IAFIS
    directly. Yes, there are 44 million fingerprints in IAFIS,
    which is one heck of a database, and obviously the vast
    majority of them are American citizens who have somehow come
    into a position where they would be subject to that scrutiny.
    But a huge percentage, a huge number are international
    fingerprints, and I just, it's going to be hard for me as a
    legislator if we have an event in this country and an
    individual comes into this country who went through the US
    VISIT program, got fingerprinted, but didn't show up because
    your program doesn't have a big enough database yet to pick the
    person out. We find out after the person has done some
    destructive event in this country that that person's
    fingerprints are sitting there at IAFIS and we knew that he was
    a bad guy.
        So I understand the technology problem. I understand the
    practical problem of having to roll everybody coming into the
    country. And I can see where you made the decision and that you
    know, you're going to have to start from scratch building a
    database. But there's got to be a better answer here to getting
    these two converged. If it takes dollars in order to do the
    technology conversions in order to get IAFIS to a digital
    capability where it can handle your type of needs, we'll do it.
    Because quite honestly, your issue is a heck of lot bigger than
    any other issue the FBI has today.
        That fingerprint database of 44 million should be used to
    protect this country against terrorism. That should be its
    primary purpose today. Granted, it was created to protect us
    and deal with criminal events in this Nation, but that isn't
    what it should be used for. It is a huge resource sitting there
    that should be used to protect us from people coming into this
    country to do us harm, and it should be integrated with your
    system, totally integrated.
        And so, I guess your answer to me was, well, we can't
    integrate because we're not there yet. My question to you is
    what do we need to get there and how quickly can we get there?
        Mr. Hutchinson. And that's the right approach to it,
    Senator. We, first of all, are wanting to gravitate to 8
    scanned prints, which would be, I believe compatible for entry
    into the IAFIS system. That will take us some time because
    that's something the State Department has to work on as well,
    and we have to partner with them on the technology.
        Senator Gregg. We can bring the State Department along.
        Mr. Hutchinson. The other suggestion that I would have is
    that we utilize the services of the National Institutes of
    Standards, NIST, that evaluated our system, what its
    capabilities were, and I think that their counsel would be
    helpful in not just looking at what we need to do to make these
    compatible, but who needs to make some adjustments. For
    example, should IAFIS develop a system that does not just
    simply have to take 10 rolled prints. Can they develop a system
    that is interacting to the 8 scanned prints or the 10 scanned
    prints. I hope they would look at that solution as well.
        Senator Gregg. That's fine, NIST is a wonderful technical
    agency and I suppose we could hold a hearing on this, we could
    have CJS and maybe do a joint hearing, and bring all the
    different parties to this fingerprint issue together and try to
    get movement. But we shouldn't have to do that. This
    administration should have a game plan which is in place and
    which is signed off on by the three key parties, State,
    yourself and the FBI, and which says this is the time frame,
    this is the technology changes we have to make, and this is
    what it's going to cost us. You should be coming to us with
    that plan so that we can fund it and we can hold you
    accountable to that time frame. Saying that we should call NIST
    and say well, NIST, will you tell FBI to straighten out, IAFIS
    is not the answer. The answer is that you folks, because you
    are the administration, should be doing this. I mean, that's
    what administrations do. Congresses shouldn't have to do that.
        And I'm really discouraged about this. We spent so much
    time getting this--database up and running and now it's being
    marginalized in the most singly important thing we have to do
    as a country, which is defend ourselves from people coming in
    who are our enemies. It's just very hard for me to figure out
    why we aren't more aggressively pursuing a resolution of those
    issues, rather than you're going your way setting up your
    database and saying well, we can't get into IAFIS because we
    can't roll 10 prints, and the FBI is out there saying they
    can't do it with digital and they aren't going to do two
    prints, and they aren't going to convert their system because
    it's too expensive and too complicated for them to do it. And
    then we're supposed to go call NIST up and say really, who has
    the answer here. You guys should have the answer and it should
    be given to us.
        So what I'm going to ask you for is for you to gather the
    Secretaries of Homeland Security and State and the Attorney
    General, and get us a statement of policy as to how you're
    going to get the FBI fingerprinting databases coordinated so
    that they all are integrated and can communicate with each
    other in a time frame that's going to occur before we're
    attacked again.
        Mr. Hutchinson. Thank you, Senator. That's a fair request
    and we will certainly be delighted to work and develop that
    joint strategy.
        Senator Gregg. Thank you.
        Senator Cochran. Mr. Secretary, just as a way of following
    up on Senator Gregg's questions, I'm curious to know what funds
    the Department intends to dedicate to this project, the
    integration of the systems during fiscal year 2004 and what
    account is being used to fund the project. Do you have that
    information or would you like to submit that for the record?
        Mr. Hutchinson. We probably will supplement the answer that
    I will give now. But first, and as Secretary Ridge testified--I
    believe it was before you, but it might have been the House
    Appropriations subcommittee, is the existing need for
    integration so that the Border Patrol agents can access IAFIS.
    The funding is in place to do that and it is pledged to be
    accomplished by the end of this year, and I think the Secretary
    indicated that we will scrounge around if there needs to be a
    few extra dollars to achieve that goal, but we're committed to
    making sure the information integration with IAFIS is
    accomplished.
        In reference to Senator Gregg's comments and questions,
    that integration will be funded out of the $340 million in 2004
    for US VISIT. That's the budget that we have to work with to
    accomplish objectives of 2004, as well as moving toward any
    integration, and of course, any other funding would come from
    the State Department's budget and the Department of Justice.
        [The information follows:]

              Integration of Database Systems in Fiscal Year 2004

        Therefore, to accelerate the implementation of IDENT/IAFIS
    capability within the Department, we intend to reallocate $4 million of
    the remaining funds provided in Public Law 107-117. The $4 million,
    when combined with fiscal year 2003 funds already provided ($3.5
    million obligated for IDENT/IAFIS as part of increment 1 Entry-Air/
    Sea), will allow BTS to implement IDENT with 10 print capabilities in
    secondary processing areas at 115 airports, 14 seaports and 50 of the
    largest land border ports. In addition, this funding will support
    implementation of the IAFIS/IDENT 10 print capability at 70 percent of
    the Border Patrol stations. The remaining land ports of entry, 30
    percent of the Border Patrol stations and major ICE locations (to be
    identified) will receive this capability in 2005.

        Senator Cochran. One observation is that if this project is
    not receiving the support and attention required to get it to
    completion, should a separate project office be set up to
    implement the program?
        Mr. Hutchinson. I would not suggest so. We have a very
    effective project office in US VISIT that has the capability.
    And I don't mean simply to recite challenges in this effort,
    but you know, we had a choice this year of recognizing that we
    could have an added security value by putting our fingerprint
    scanners at our primary ports of entry and we did this, and
    we're looking at when we change it down the road to a broader
    capability, we probably lost a million dollars for those
    fingerprint scanners. So for the added security value, it was a
    good decision to make, but we recognized at the time that we're
    going to have to gravitate to probably 8 prints at a minimum,
    for a number of reasons. So we recognize the need to move to
    that standard and that will be a part of the US VISIT oversight
    responsibilities.
        Senator Cochran. Is there a final deployment schedule to
    roll out version two of the integration project to all Border
    Control facilities or when can these facilities expect the
    roll-out to be completed?
        Mr. Hutchinson. There is, and that will be completed by the
    end of this year. I believe we have IAFIS at 20 Border Patrol
    stations. I think we have about another hundred that are on
    schedule to be given the connectivity to IAFIS, and so that
    should be completed on schedule by the end of the year.
        Senator Cochran. Senator Byrd.
        Senator Byrd. Thank you. I particularly was interested in
    Senator Gregg's and your questions, and the answers.
        Last month a few days after the Democratic primary, the
    President went to Charleston, South Carolina, to crow a little
    about his efforts to improve the security of the ports. I must
    say that I found this kind of a political event to be somewhat
    disingenuous. The President signed the Maritime Transportation
    Security Act on November 14, 2002. That law authorized
    initiatives to improve security at our ports, but I'm not
    convinced that the Administration has done that much since then
    to actually make our ports safer. Given the huge demand for
    port security funds, why is this Administration only requesting
    $46 million to actually secure our ports?

                                 PORT SECURITY

        Mr. Hutchinson. Senator Byrd, it's because we believe that
    there is a shared responsibility, both in terms of the private
    sector, and the port authorities, and the Federal Government
    spurs that on, sets the example, funds a significant portion of
    the projects, which I believe that we have done. Last year I
    think there were two rounds of port security grants, so there
    was a very substantial amount that was invested last year, and
    it was a combination of grants to port authorities but also to
    the private sector. But, we do not believe it's exclusively a
    Federal Government responsibility to do all of the port
    security investment, the private sector has a responsibility,
    as well as the governmental port authorities.
        Besides the port grants, we are also investing
    substantially in port security in terms of the activities of
    the Coast Guard, the Customs and Border Protection, and the
    other agency responsibilities related to the ports.
        Senator Byrd. Well, I know that we are going to continue to
    hear that answer. We still inspect less than 5 percent of the
    5.7 million containers that come into our ports each year. The
    President took credit for making available $179 million this
    year in funding for grants for port security. He failed to
    mention that he did not request a dime of those funds. He
    failed to mention that the Coast Guard port directors, who
    actually have responsibility for safety, estimated that $1.25
    billion would be needed in the first year and $5.4 billion
    would be needed over the next 10 years to comply with the new
    Federal regulations mandated by the Maritime Transportation
    Security Act. He failed to mention that last year he opposed my
    amendment to provide $460 million in port security grants. He
    failed to mention that his budget for fiscal year 2005 proposed
    to cut port security grants by 60 percent, from $124 million to
    $46 million, when the last competition for grants resulted in
    over $987 million in applications from ports nationwide.
        Now I'm afraid something terrible is going to happen one of
    these days, and then what will be said? Our ports must compete
    with other ports, including ports in other countries. If these
    security costs result in higher prices, assuming the costs are
    going to have to be borne by industry, are you and the
    President not concerned that business may go elsewhere, costing
    U.S. jobs?
        Mr. Hutchinson. Well, I think that first of all, we've
    discussed significantly the port security grants and the
    philosophy behind the amount that is requested. You also raised
    the question of the fact that only 5 percent of the 6 million
    sea containers are inspected that come into our ports. I think
    this is, again, a philosophical question as to whether you
    inspect 5 percent, 10 percent, 15 percent, or 100 percent. And
    I suppose if we inspected 20 percent of all the cargo, there
    would be those who would argue it ought to be 100 percent, that
    argument exists right now. I think it's a better decision to
    try to make sure we inspect the right 5 percent or right 10
    percent, or whatever that number is, and that we inspect all of
    those, 100 percent of those containers that indicate a risk to
    our Nation.
        So that is the strategy that we're developing. We are not
    underestimating your concerns and what we know as threats to
    our ports. We take that very seriously, and that's why the
    Coast Guard has conducted more than 36,000 port security
    patrols. That's why we have imposed the regulations that
    require the security plans by the vessel operators and the port
    authorities, all to enhance the security, in addition to the
    partnership that we have in the cash investments for port
    security.

                                    CAPPS II

        Senator Byrd. Mr. Secretary, the fiscal year 2004
    Appropriations Act included a provision requiring the General
    Accounting Office to review the privacy and security of the
    proposed CAPPS II airline system. The GAO recently submitted a
    report to us that stated that your Department has met only one
    of the eight criteria set out by Congress before you could move
    ahead with deployment of the system. I understand that the
    Department concurs with the GAO's findings. Where is DHS now in
    testing of the CAPPS II system?
        Mr. Hutchinson. Senator, we are actually months away from
    actual testing data for CAPPS II. We are obviously aware of the
    airlines' concern about voluntarily sharing data, so we're
    looking to find a vehicle of having the data that we need to
    query out the testing, and my best estimate would be that we
    are still a number of months away from doing the testing to the
    CAPPS II.
        Senator Byrd. Now that the GAO concluded that your
    Department has not met the requirements of the law, I encourage
    you not to deploy the CAPPS II system until you have satisfied
    for this subcommittee that the requirements of the law have
    been met.
        I have several questions, Mr. Chairman. I could submit
    several of these for the record at your pleasure.
        Last week the Department celebrated its 1-year anniversary.
    To commemorate the event, Secretary Ridge released a list
    touting the Department's major accomplishments in its first
    year and, indeed, much has been accomplished. For instance, his
    press release notes that a seal has been developed to establish
    an identity for the Department. Good. You know who you are and
    for whom you are working. The release also noted that employees
    received a lapel pin signed by the Secretary and featuring the
    new Department seal.

                            IMMIGRATION ENFORCEMENT

        Sadly, no mention is made in the list of the Department's
    accomplishments for the enhanced enforcement of our immigration
    laws. At best, there is a passing reference to the new
    Department's reorganization of the immigration enforcement
    functions. Especially in light of the President's sweeping
    amnesty proposal, I'm surprised that the Department has nothing
    to report as an accomplishment in enforcing our existing
    immigration laws. Many members who were opposed to the creation
    of the Department, like myself, were concerned that the focus
    of the Department and its personnel would shift from
    traditional duties to terrorism. Why is the Department unable
    to point to significant improvements and successes in
    enforcement of existing immigration laws? What specifically is
    your director doing to enhance immigration enforcement?
        Mr. Hutchinson. Thank you, Senator, and I'm grateful for
    the opportunity to reflect on significant achievements in the
    area of immigration enforcement. It is estimated, as you know,
    that there are 8 million illegal workers in this country at the
    present time. It's estimated that 40 percent of those are here
    because of visa overstays. And so whenever you talk about what
    we've done with US VISIT and being able to have a better
    control of those who come into the country and overstay their
    visas, that system is a significant accomplishment in
    immigration control. It produces information on people who
    overstay their visas and stay here in the country illegally.
        We have created an office of compliance within the Bureau
    of Immigration and Customs Enforcement that is responsible for
    receiving the information and providing leads to the field in
    order to determine who should be processed for removal from the
    country. So, that is a huge step forward in immigration
    enforcement.
        In addition, we have successfully implemented the SEVIS
    program, which tracks our foreign visitors coming into this
    country, and in one fall semester, as over 200,000 students
    came into our country, we apprehended over 200 that came in
    here who were not properly accepted into a university. I think
    our country is safer because of that effort.
        We have also, of course, put 1,000 more patrol agents on
    our northern border, and we have increased our resources on the
    southwest border. The chief of police of Phoenix attributed
    immigration enforcement in Arizona and our Operation Ice Storm
    to a successful reduction of violent crime in the Phoenix area.
        And so at every level, from the fugitive operations to
    Operation Predator to Operation Ice Storm, I think we have done
    a very, very significant amount of work in immigration
    enforcement.
        Senator Byrd. Do you miss being in your old job?
        Mr. Hutchinson. Every once in a while I miss being up there
    on the House side.
        Senator Byrd. I think you did a good job. I watched you
    very carefully during the impeachment procedures.
        Mr. Hutchinson. Thank you, sir.
        Senator Byrd. I thought you kept a level head on your
    shoulders. I thank Senator Gregg for raising the issue of
    compatibility between US VISIT and the FBI databases. Chairman
    Cochran and I raised the issue with Secretary Ridge almost a
    year ago.

                              BORDER PATROL: IDENT

        On a related matter, last week the Department of Justice
    Inspector General released a report that examined the case of a
    Mexican citizen who had been detained by the Border Patrol on
    two occasions in January 2002 for illegally entering the United
    States. On each occasion, Border Patrol agents returned him
    voluntarily to Mexico. They did this because IDENT, the
    immigration agency's automated fingerprint identification
    database and the Federal Bureau of Investigation's automated
    fingerprint identification database were not integrated and the
    Border Patrol agents who apprehended him did not learn of his
    extensive criminal record or past deportation. If his full
    history had been learned, according to Border Patrol policies,
    he should have been detained and subjected to prosecution.
    Instead, he was returned to Mexico. Subsequently, he again
    crossed the board illegally, and made his way to Oregon in
    September of 2000 where he raped two nuns and killed one.
        In the report, the Inspector General again found delays in
    the effort to integrate the IDENT and IAFIS databases. While he
    found some progress in deploying an integrated version of
    IDENT-IAFIS, full integration of the two systems remains years
    away. Current projections are that the two systems will not be
    fully integrated until at least August 2008, almost 2 years
    behind the original scheduled completion date. Both the
    Department of Justice and the Department of Homeland Security
    say they recognize that the databases need to be integrated.
    However, the IG report found uncertainty as to who is
    responsible for the overall management of the integration
    project. It states that Justice and Homeland have yet to enter
    into a memorandum of understanding delineating the specific
    roles and responsibilities of each agency in the project.
        Can you give us an update on your plans for developing a
    memorandum of understanding with the Justice Department so that
    this project can move forward?
        Mr. Hutchinson. Yes, sir, and that certainly points out
    that there is much work that remains to be done, and I'm
    grateful for the opportunity to recite some of the efforts that
    we have implemented, but we are the first to acknowledge that
    there is much more to be done and this is certainly a perfect
    example of it. The IG is correct, to wait until 2008 would be
    absolutely wrong and intolerable, so under Secretary Ridge's
    leadership we are going to get it done this year. We want to
    avoid this type of tragic circumstance in the future, and it
    was a tragic circumstance of this particular case, and it shows
    the extraordinary cost of not having all of the information
    needed for our Border Patrol agents.
        We have that system at 20 sites now, and we're going to add
    100 this year and get them connected. And if there's a few left
    after that, we'll find the money to get it done. We have
    accelerated the schedule to get it done this year. We want to
    look at more opportunities to give our agents in the field, and
    inspectors, all the tools they need, particularly this type of
    access to the FBI database.
        Senator Byrd. Thank you. Thank you very much, Mr. Chairman.

                               TRADE ENFORCEMENT

        Senator Cochran. Thank you, Senator Byrd.
        Mr. Secretary, something that your State and my State is
    interested in is our domestic fish industries, catfish and
    other activities relating to the production of aquaculture
    resources. I was recently informed that the Customs and Border
    Protection officials took 6 months to review and comment on a
    request for new tariff codes for Vietnamese exports of fish
    into the United States. I've written to Secretary Ridge about
    this issue, but I would like to bring this to your attention
    personally and receive any comment that you have about a
    commitment to trade enforcement, which in my view should remain
    a high priority for the Border and Transportation Security
    Directorate. I hope you will look into the problems that may
    exist in the Department regarding catfish dumping or trade
    rules that need to be enforced aggressively by the directorate.
        Mr. Hutchinson. Thank you, and I certainly share the same
    concern, coming from Arkansas, in reference to the enforcement
    of our trade laws on this commodity as well as others. I don't
    know the specific answer on why it took 6 months to review that
    tariff code and I would be happy to provide a specific answer
    to you. We have made a commitment not to reduce our resources
    and commitment to trade enforcement, and we have a good
    partnership with the Department of the Treasury to carry on
    those trade enforcement efforts. I'm co-chairman of the Coe
    Act, which is the partnership with industry in their advisory
    committee on how we handle our trade rules, so we will get a
    specific answer to you on that question.
        [The information follows:]

               Vietnamese Exports of Fish into the United States

        CBP processing time for 484(f) requests varies depending on
    the complexity of the request and the purpose of the request.
    While most requests are processed within the 6-month period,
    exceptional requests have taken longer. (As a comparison, the
    484(f) committee received a request for a statistical breakout
    for low-melt polyester fiber on June 30, 2000, which was not
    approved until May of 2001 for implementation on July 1, 2001.
    While rare, these situations do occur.) The request for these
    fish breakouts was one of these exceptional requests.
        The 484(f) request received by CBP was submitted in advance
    of the Federal Register Notice published on August 12, 2003,
    referenced in the requestor's submission, and the instructions
    to CBP issued on September 12, 2003. Those documents needed to
    be reviewed in conjunction with the requestor's submission
    because CBP is the agency responsible for collecting the
    antidumping duties under the order and identifying attempted
    evasion of the order. This 484(f) request was also intended to
    allow the domestic industry to monitor specific foreign
    competition.
        The first problem was that CBP (and the ITC, based on their
    report) did not agree with the requestor as to the proper
    classification of the imported species of fish and therefore,
    the proposed breakouts. This is not an unusual occurrence.
    Since the 484(f) committee usually tries to meet the purpose of
    the request even if the committee does not technically agree
    with the request, the issue for CBP was how to meet the
    requestor's goals.
        CBP found that the specific imported fish were more subject
    to misclassification than other commodities for which breakouts
    have been requested. This fact meant we needed to be able to
    segregate these fish from the other fish properly classified in
    the various subheadings.
        CBP also had to reconcile the recent change to the FDA
    labeling requirements with CBP import laws, regulations, and
    policies and enforcement capabilities.
        CBP needed to take into consideration our informed
    compliance responsibilities to importers under the MOD ACT
    followed by our enforcement capabilities. We also considered
    our ability to physically identify non-compliant fish, our
    ability to target shipments for sampling and maintain the
    physical integrity of the perishable sample through the
    laboratory analysis process, and whether other agency
    requirements would be effected by any of the breakouts. We also
    took into consideration concurrent work being done by the
    Bureau of Immigration and Customs Enforcement. Finally, we
    applied our knowledge of certain techniques that have been used
    to avoid payment of higher duties on other perishable
    commodities.
        All of these considerations are not routinely necessary
    during our review of 484(f) requests and required information
    from multiple CBP offices and time to correlate the elements
    into a plan. Once the facts were finalized, CBP responded to
    the other 484(f) members with our proposal.
        Note that CBP met with the requestor's representatives on
    February 27, 2004 and were able to come up with a new proposal
    that will meet their needs for trade data and allow CBP to more
    easily enforce the current antidumping order and verify trade
    data. At the same time, this proposal will allow implementation
    prior to the resolution of the classification issue. The
    requestor will provide some additional information to CBP at
    which point we will forward the proposal to the other committee
    members (Census and the ITC.) We anticipate that our proposal
    will be satisfactory to the other committee members and the new
    breakouts will be implemented no later than July 1, 2004.

                              FEDERAL AIR MARSHALS

        Senator Cochran. Thank you very much. In connection with
    Federal air marshals, I notice that the budget request is
    essentially flat for the Air Marshals program. Is this a
    concern to you? Do you think an adequate level of resources are
    available under the budget request to fund pay raises and other
    inflationary costs that may occur with this program?
        Mr. Hutchinson. We did get hit with the pay increases that
    are built into the budget that had to be absorbed. We have a
    strong commitment to the Federal Air Marshals program. That's
    one of the reasons we took a number of steps to add some
    additional capabilities to supplement the air marshals with
    other Federal agents who travel, including cross-training
    additional ICE agents and a partnership with the Secret
    Service. We believe that with those force multipliers out
    there, and with the continued commitment to the air marshals,
    that the President's budget is sufficient in that area.
        We are, you know, for this year, looking at a number of
    different areas to make sure that there is no any significant
    diminishing of our commitment to the air marshals.

                            NORTHERN BORDER AIR WING

        Senator Cochran. The Air and Marine Operations program has
    been stretched pretty thin for the last 2 years. Long-term
    repetitive details for personnel and assets are being used to
    protect the northern border and the national capitol region.
    The appropriations for fiscal year 2004 included resources for
    the establishment of a permanent northern border air wing. Will
    you tell us what the status of establishing this air wing is,
    when will there be permanent employees on board, and when will
    aircraft be purchased, for example. Are you going to have to
    continue to rely on detailees to cover the northern border and
    the national capitol region if you go forward with the
    establishment of this air wing?
        Mr. Hutchinson. I think it's important that we have that
    air wing capability on the northern border, and we are actively
    pursuing it. The assets that are deployed, you know, are from
    our existing resources, but the 2005 budget does request $28
    million for P-3 aircraft surveillance that will help in regard
    to our interdiction efforts, and also the assets that we need
    for the CAPP or the protection of our air space. So there are
    some funds designated in the 2005 budget for this purpose.
        As to the exact time frame on the deployment and the
    establishment of the air wing for the northern border, Senator,
    I will have to get back to you.
        [The information follows:]

      Exact Timeframe on the Deployment and Establishment of the Northern
                                Border Air Wing

        The fiscal year 2003 War Supplemental provided $20.5 million to
    launch the Bellingham Air Branch, the first of five Northern Border
    Branches. Planned allocation is as follows: $2.5 million for personnel
    transfers, $12.6 million \1\ for medium lift helicopter acquisition and
    $6.6 million for multi-role enforcement aircraft. Staffing will be
    provided through a combination of new hires and the transfer of
    experienced personnel from other AMO field locations.
    ---------------------------------------------------------------------------
        \1\ Funds from these two appropriations were combined to purchase
    one medium lift helicopter.
    ---------------------------------------------------------------------------
        In fiscal year 2004, AMO received $35.2 million in Operations and
    Maintenance (O&M) funding to launch AMO's Northern Border Branch in
    Plattsburgh, NY. Planned allocation is as follows: $10 million \1\ for
    medium lift helicopter acquisition and $6.6 million for multi-role
    enforcement aircraft, $9.7 million for facility and $2.7 million for
    aircraft spares. An additional $5.4 million was appropriated in
    Salaries and Expenses funding to cover the cost of 36 personnel.
        Plattsburgh and Bellingham each will be equipped with three
    aircraft, including one Multi-Role Enforcement Aircraft (Pilatus PC-12
    fixed-wing), one Medium Lift Helicopter and one Light Enforcement
    Helicopter.
        The two PC-12 Pilatus aircraft have already been purchased and
    delivery is expected in May 2004/early fiscal year 2005, respectively.
    Contracts have not yet been awarded for the two Medium Lift Helicopters
    and Light Enforcement Helicopters required for full activation of
    Bellingham and Plattsburgh. Currently, the UH-60 Black Hawk is
    fulfilling the MLH role and the AS350 is fulfilling the LEH role at
    other AMO branch locations.
        The President's fiscal year 2005 budget includes $35.2 million to
    launch the third Northern Border Branch.
        AMO will continue to rely principally on detailees to execute the
    ongoing National Capital Region (NCR) Airspace mission. AMO has
    sustained the NCR mission by transferring funding, personnel and
    equipment from other missions and requirements.

                            LONG-RANGE RADAR SYSTEM

        Senator Cochran. We are looking forward to getting a report
    from the Air and Marine Operations officials on the current
    radar situation around the country. What is the total amount
    that the FAA had in its budget for operating the long-range
    radar system? Can you tell us how much is being requested by
    other agencies across the government by agency, and is there
    any particular reason that new resources are being requested in
    the fiscal year 2005 budget to allow the Department to assume
    this FAA responsibility, as opposed to a transfer from the FAA
    budget?
        Mr. Hutchinson. You're not speaking of our TARS, you're
    speaking of the long-range----
        Senator Cochran. The long-range radar system.
        Mr. Hutchinson. I don't know the answer as to why that is
    not being transferred from the FAA, but clearly that is a
    priority to have that capability for the protection of our
    borders.

                           TSA: PORT SECURITY GRANTS

        Senator Cochran. The Transportation Security
    Administration's budget has 54 percent of the request dedicated
    for aviation passenger and baggage screeners pay, benefits,
    training and human resource services. There are other grant
    programs administered by the TSA dealing with trucking
    security, port security grants, and operation of safe commerce
    that are slated to be moved to the Office for Domestic
    Preparedness under the reorganization of the Department. The
    2005 budget proposes to reduce or terminate funding for these
    programs. My question is, will the Transportation Security
    Administration continue to have responsibility for security
    over all sectors of transportation or will aviation security
    continue to be the main focus of the agency?
        Mr. Hutchinson. Well, in terms of budget, clearly aviation
    would be the main focus of the agency, but in terms of
    responsibilities and partnerships, the other modes of
    transportation are very important to us. I know that for
    example, in reference to Amtrak, there is a close partnership
    there, we have some pilot projects where we are working with
    Amtrak to enhance security, and we believe that we would
    exercise this through standard setting, best practices and
    regulation if necessary.
        In reference to the grant programs, the expertise still
    resides in TSA. And even though the grant program is being
    transferred to the Office for Domestic Preparedness in Homeland
    Security, we will be connected in terms of evaluating those
    grants, and helping to set the priorities for those in terms of
    security, and that would be true for the other grants in the
    transportation modes.
        Senator Cochran. So there will be coordination and an
    active role for the Transportation Security Administration in
    coordinating with the Office for Domestic Preparedness for the
    administration of those programs?
        Mr. Hutchinson. Absolutely, Mr. Chairman. That's essential
    and that was the understanding when that transfer was made.
        Senator Cochran. Is there an indication that additional
    funds may be made available within the existing grant programs
    for port security grants in the Office for Domestic
    Preparedness?
        Mr. Hutchinson. I think that the grant level is as
    suggested in the 2005 budget, but I know that in 2003 there
    were a number of rounds that had built up and been announced
    for the port security grants. I don't know exactly the layout
    planned for 2004, but as far as I know, that amount of grant
    money is fixed based upon the allocation in the 2004 budget.

                                 TSA: SCREENERS

        Senator Cochran. The Aviation and Transportation Security
    Act provided that the Federal Government be responsible for
    screening operations for airline passengers at airports
    throughout the country, and there was a pilot program
    established at five airports to utilize private screeners in
    place of Federal screeners. One of these is located in
    Mississippi. The law provides for the ability of airports to
    apply to the Department of Homeland Security to opt out of
    using Federal screeners and to use qualified private screening
    companies at the end of a 3-year period, and that will be
    coming up in November of this year. When do you anticipate
    results of the Department's study on the private screening
    companies to be made available from these five airports that
    have been participating in the program?
        Mr. Hutchinson. I think there are two things I would
    emphasize. One, it is important to get the results from those
    five airports that were the subject of that pilot for private
    screening. I would expect that information within the coming
    months so it can be evaluated. The second part of the equation
    is the criteria that we would use for determining how we
    respond to those airports that might request to opt out. And, I
    have asked for that plan and that program to be developed and
    reported back to me for review. With both of those issues
    resolved, I think in the coming months we should have an
    indication as to the results and the direction we can go.
        Senator Cochran. There is some indication that the funding
    might not be sufficient to provide additional airports with the
    funds to use private screeners. There is $119 million in this
    year's appropriated account for private screening programs, but
    only a $10 million increase requested for 2005. Do you
    anticipate a need for additional funding if airports apply to
    use private screeners?
        Mr. Hutchinson. I would think the assumption is that it
    would be a level costing. I don't think we would anticipate a
    private screening capability or authorization to be based on an
    increase in funding for that airport.

                                     FLETC

        Senator Cochran. The Federal Law Enforcement Training
    Center was given responsibility for the Charleston, South
    Carolina training facility in this fiscal year 2004. This
    facility was previously operated and maintained by the Border
    Patrol. Has the Department of Homeland Security developed the
    level of funding that should be transferred to the Federal Law
    Enforcement Training Center to operate this location, and if
    so, when will this transfer take place?
        Mr. Hutchinson. The transfer has effectively taken place.
    The FLETC has taken over the responsibility for that facility
    and the Border Patrol operations. It is being handled out of
    the regular portion of the budget. I am not aware of any
    specific needs that would require increased funding.

                          TRANSIT WITHOUT VISA PROGRAM

        Senator Cochran. Senator Stevens, I appreciate your being
    able to come to the hearing. You're recognized for any
    statements or questions you may have of the witness.
        Senator Stevens. I'm here, Mr. Chairman, and good morning,
    Senator Byrd, primarily because my staff has told me that there
    is an intent of Homeland Security to implement new regulations
    to replace the transit without visa program. This, I'm told
    it's called the TWOV program, falls apart every time the alert
    status is raised, and has led numerous carriers to bypass U.S.
    airports, particularly our Anchorage airport, which is the
    largest cargo landing airport in the United States today. There
    is significant loss of revenues for the airports because the
    foreign carriers will not respond as quickly as the changes
    come about in our programs.
        And we had significant capability for intelligence
    gathering opportunities when those flights came through. As a
    matter of fact, our people cooperated totally with the
    intelligence people to make sure that we gained all the
    information we possibly could get from any activity with regard
    to the shipments.
        But we have had one international carrier that has
    suspended its stop in Anchorage three times now since 9/11.
    Every time the TWOV program is raised because of risk status,
    they just cancel out. We want to join with you, and with the
    whole country in terms of homeland protection, but it does seem
    to me that we ought to have some sort of regimen that will take
    into account the necessity to maintain these flights on a
    regular schedule.
        Right after 9/11, as you know, many of them cancelled in
    Alaska altogether and went to Canada. Those same flights left
    Canada and put the burden for checking the flights on the
    carriers in the interior of the midwest, rather than in the
    area of Alaska where we have substantial qualified people for
    that activity. Because it's such a large airport and handles so
    much volume of cargo, it can get the job done quickly, much
    more quickly than a smaller airport which does not have that
    volume and is not used to doing the check as the first stop in
    the United States. Are you familiar with this at all?
        Mr. Hutchinson. Yes, sir. In reference to the transit
    without visa program, it was suspended because of specific
    threat information that we had. It was suspended. We recognized
    the adverse economic consequences that this had on the
    Anchorage airport, which has a significant transit without visa
    passenger load. We immediately started working with the
    airlines to determine what security measures could be put into
    place that would allow us to reinstitute a similar type of
    program that would not have the security vulnerabilities.
        We have developed an answer and a program that we could put
    into place, which would reinstitute similar portions of that
    type of program, and would allow the transiting of some of the
    international passengers through our airports again. We are
    circulating that plan in the interagency process, and we do
    hope that we will be able, in the near future, to have a
    resolution of that. We understand the economic consequences, we
    do want to have the security measures in place before it is
    reinstituted.
        And you're right, Senator, it was complicated by the fact
    that over the holidays we did have a specific threat to the
    aviation industry, which would not have been a good time to
    redeploy that program or a similar one.
        Senator Stevens. These are the so-called ATP regulations?
        Mr. Hutchinson. Yes, sir.
        Senator Stevens. Will they be promulgated in a way that
    they will not change on an orange alert?
        Mr. Hutchinson. That is correct. These would be designed so
    that they provide the security measures that are necessary and
    they would allow for a constant program. Now I can tell you
    that, you know, if we have a specific threat information and we
    see there is a vulnerability that we didn't even think about,
    it's within the realm of possibility that we might have to take
    an additional security step in orange that would impact that
    program. But that is not the design, the design is that it
    would have a constant flow because it has the security measures
    in place.
        Senator Stevens. On the last recess I went to Anchorage and
    I went through the whole new wing of the airport that has been
    designed in total compliance with your Department. As a matter
    of fact, we have a problem because your Department requested
    and received over some $40 million from the amount of money
    that was put up to build the terminal. For the Homeland
    Security facilities within the new addition, they had to be
    finished before the terminal could be finished. And so they all
    agreed, and I now have the task of getting another $40 million,
    and that's another fight down the road.
        But the problem is that it was designed to handle the
    regulations that were in effect, and now those regulations, if
    they are changed, will require an additional kind of management
    of the cargo. We're not talking about a very heavy passenger
    load internationally. This is primarily cargo. There are very
    few passengers on those planes and in many instances none. What
    we're looking at is the cargo problem. I'm told that there are
    6.5 miles of tracks that are suspended from the ceiling that
    carry this cargo so it has a chance to be inspected, and then
    it can go back on the plane. I don't think anywhere else in the
    United States has that design.
        But, by the changes in this ATP, what happens is that they
    go to Vancouver or go to another place, Calgary, and then they
    go to land in some podunk that doesn't have any facility at
    all. So we are over intensifying regulation in an area that, I
    believe, has the most modern baggage and cargo inspection in
    the country today, and should have with the volume of cargo we
    have coming through there. I urge you to consider what the
    change in regulations does to that installation. It puts cargo
    into places ultimately, if it's going to continue on to the
    United States, if it's destined for what we call the South 48,
    it's going to completely disrupt this process and put enormous
    burdens on small airports when we're prepared to take the total
    burden but for the continued change in the regulations.
        Mr. Hutchinson. We'll certainly look at the concern that
    you raise, and recognize the investment in security that has
    already been made. I think the proposed plan, that again is in
    interagency circulation, looks not just at the physical
    security arrangement, but addresses some other vulnerabilities
    dealing with the passengers that would travel under that
    program. So, there are really two parts to the security
    concerns. One would be the passengers who transit themselves,
    and the other part would be the physical security measures that
    would be placed at the airports. Obviously there has been a
    substantial investment in Anchorage and that should be taken
    into consideration.
        Senator Stevens. I know you must travel a lot, but have you
    traveled to Alaska since this new position you've got?
        Mr. Hutchinson. Senator, I have not had that privilege. I
    know my brother has at your invitation, but I have not been
    there, and I look forward to that opportunity.
        Senator Stevens. I would hope that you would see fit to
    make that trip soon because these facilities are almost
    completed now and this new addition is almost completed, and I
    just think it's going to be unfortunate if we have invested all
    this money and then find out it will not comply because of a
    change in regulations.
        As a matter of fact I just might arrange, Mr. Chairman, for
    a little extracurricular activities for our friend from
    Homeland Security if you come up soon. The sooner the better.
        Mr. Hutchinson. Thank you, Senator, for that invitation.
        Senator Stevens. I do hope you will come, I'm serious.
        Mr. Hutchinson. I will say that if you have any concerns
    when we put these regulations out, I will then make sure I go
    up there to ensure everything is taken into consideration. I
    will say we don't want to have an adverse impact on what's
    already been done up there.
        Senator Stevens. I'd like to go with you. I'd like to show
    you these things and get the people out there who designed them
    in compliance with existing regulations, and see if the
    regulations must change, how we can quickly meet those
    regulations without taking more of the AIP money.
        Mr. Hutchinson. We will be glad to work with you and your
    staff to make sure that that's handled in the proper way.
        Senator Stevens. Thank you very much, Mr. Chairman.
        Senator Cochran. Thank you, Senator Stevens. Senator Byrd,
    do you have anything further?

                              FEDERAL AIR MARSHALS

        Senator Byrd. Mr. Secretary, your budget request for the
    Federal Air Marshals is essentially a flat line request similar
    to last year's funding level. Yet, on two occasions in less
    than a year, late last summer and again over the recent winter
    holidays, you increased the threat level to code orange, in
    large part because intelligence and other indicators led you to
    believe that there were enhanced threats to the United States
    via airplanes flying into or over this country.
        However, based on budget briefings with my staff, I
    understand that the resources directed to this program are not
    sufficient to hire the number of air marshals that should be
    hired to maintain a more robust presence on targeted flights.
        As I mentioned in my opening statement, I wrote to
    Secretary Ridge today urging him to propose to this committee a
    transfer of excess salary funds to the Federal Air Marshals
    Program. I urge you to make that proposal soon.
        Mr. Hutchinson. Senator, we're happy to receive your
    letter, evaluate it and make an appropriate response. We
    recognize the importance of Federal air marshals and I know
    that last year, wherever there was a concern expressed about an
    adverse impact on their work force, we did find the funds to
    make sure that didn't happen, and certainly this year we will
    make sure that there is a robust commitment there, and we look
    forward to receiving your letter.
        Senator Byrd. I have further questions for the record, Mr.
    Chairman.
        Senator Cochran. Thank you, Senator.
        Mr. Hutchinson, we appreciate very much your excellent
    service in the Department of Homeland Security and your
    cooperation with our subcommittee. Senators may submit written
    questions, I have some that I will submit, as does Senator
    Byrd, and there may be others. We ask that you respond to the
    questions within a reasonable time.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Byrd. I thank Secretary Hutchinson for his
    appearance, for his good work, and hope that he will come to
    West Virginia on his way to Alaska.
        Mr. Hutchinson. Thank you, Senator. I have been to West
    Virginia.
        Senator Byrd. We have a beautiful place down there called
    the Greenbrier.
        Mr. Hutchinson. I have enjoyed those rooms.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                  Questions Submitted by Senator Thad Cochran

       U.S. VISITOR AND IMMIGRANT STATUS INDICATOR TECHNOLOGY (US VISIT)

        Question. Last week, President Bush met with President Vicente Fox
    of Mexico and announced that citizens of Mexico who hold border
    crossing cards and are frequent crossers of the border will not have
    each entry recorded into the US VISIT database. Please provide a more
    detailed explanation of this policy?
        Answer. The Department of Homeland Security is committed to
    developing a solution for the processing of Border Crossing Card (BCC)
    holders.
      --Most Mexican citizens who travel to and from the United States
            regularly may apply for a multi-use travel document, B1/B2
            Visa/BCC also known as a ``laser visa'', which serves as either
            a BCC or a B1/B2 visa. Mexican citizens who use the travel
            document only as a BCC will not initially be subject to US
            VISIT processing during primary inspection inasmuch as their
            biometric data (fingerscans and photographs) have already been
            captured during the BCC issuance process. This is an interim
            solution for the land border while the Department explores the
            long term solution to record the entry and exit of persons
            crossing our land ports of entry.
      --When admitted under the BCC program, Mexican citizens may stay in
            the United States for up to 72 hours and travel within the
            ``border zone'' (within 25 miles of the border in Texas,
            California and New Mexico, and 75 miles of the border in
            Arizona). Approximately 6.8 million Mexican nationals today
            utilize a BCC to make approximately 104 million crossings per
            year when using the card as a BCC card only.
      --Prior to issuing a BCC to a Mexican citizen, the Department of
            State conducts biographic and biometric checks on the
            individual. The fingerscans and photograph of the Mexican
            citizen are then embedded into the BCC. A holder of a BCC is
            inspected to determine that he or she is the rightful bearer of
            the document when crossing through a U.S. port of entry.
      --As the next phase of US VISIT is implemented at southern land ports
            of entry by the end of 2004, if a Mexican citizen chooses to
            use the BCC as a B1/B2 visa (traveling outside the ``border
            zone'' and/or staying longer than 72 hours in the United
            States), he or she will undergo US VISIT processing at the land
            border secondary inspection areas.
        Question. Customs and Border Protection is in the process of
    deploying readers for the border crossing cards. What will be the
    policy as to when border crossing cards are read? Will the readers be
    integrated into US VISIT eventually?
        Answer. In certain circumstances, Homeland Security's Customs and
    Border Protection (CBP) officers may have reason to believe the person
    presenting the BCC is not the person to whom it was issued. At that
    point, the individual is sent to secondary inspection to determine if
    there are any problems with the BCC, which could include running the
    BCC through a biometric reader or processing the person through US
    VISIT.

                        IDENT/IAFIS INTEGRATION PROJECT

        Question. The Department of Justice Office of Inspector General
    issued a report on the progress made in integrating the biometric
    systems of the Department of Homeland Security and the Department of
    Justice. While the report does not make specific recommendations to the
    Department of Homeland Security, it does state that the IDENT/ENFORCE
    project team reports through the US VISIT program office. Further, it
    indicates that some of the delay in implementing the integration is due
    to the emphasis that is being placed on the roll-out of US VISIT. Is
    this project receiving enough support and attention? Should a separate
    project office be set up to implement this program?
        Answer. The implementation of IDENT/IAFIS is a top priority at both
    DHS and DOJ, and a working group has been developed of representatives
    from DOJ, FBI, CBP, ICE, USCIS and US VISIT to define plans for
    completion of IDENT/IAFIS implementation at all 115 Air, 14 Sea, 165
    Land Border POEs, as well as all Border Patrol Stations and specified
    ICE locations.
        Question. Have you finalized a deployment schedule to roll-out
    Version 1.2 of the IDENT/IAFIS integration project to all Border Patrol
    facilities? When will the Version 1.2 roll out be completed?
        Answer. Currently a comprehensive plan to complete implementation
    of Version 1.2 of the IDENT/IAFIS integration project is being
    developed including components from FBI, DOJ, CBP, ICE, USCIS and US
    VISIT. The implementation of 70 percent of Border Patrol Facilities is
    scheduled for the end of this year, and the remaining 30 percent by the
    end of next year.
        Question. What consideration is being given to rolling out the Real
    Time Image Quality software developed for US VISIT to other IDENT
    stations in order to improve the quality of the fingerprint being
    captured?
        Answer. The use of the real time image quality capture inside of US
    VISIT has been a significant enhancement to US VISIT. This capture
    improvement has really enhanced US VISIT and expanding this to IDENT is
    currently a system change request for the contractors to implement.
        Question. What funds will the Department be dedicating to this
    project in fiscal year 2004, and what account will fund this project?
        Answer. US VISIT is working to obtain approval to utilize $4
    million (which remains unexpended) from the $10.1 million received as
    part of the 2002 Counter Terrorism funding (Public Law 107-117).
        Question. What funds are requested for fiscal year 2005?
        Answer. $3 million from base resources will be used in fiscal year
    2005 to complete IDENT/IAFIS deployment.

                         72-HOUR RULE--SOUTHWEST BORDER

        Question. As the Border and Transportation Security Directorate
    moves forward with implementing the US VISIT system, what is the
    Department's position on revising the 72-hour rule to allow Mexican
    citizens that have been cleared to possess a border crossing card to
    stay in the United States for a longer period of time?
        Answer. While the Department of State adjudicates the application
    for a Border Crossing Card (BCC), DHS is responsible for establishing
    the policy surrounding the use and eligibility of such a visa document.
        Many Mexican citizens who travel to and from the United States
    regularly apply for a multi-use travel document, also known as a
    ``laser visa,'' which serves as either a BCC or a B1/B2 visa. Mexican
    citizens who use the travel document only as a BCC will not initially
    be subject to US VISIT processing during primary inspection inasmuch as
    their biometric data (fingerscans and photographs) is captured during
    the BCC issuance process. This is an interim solution for the land
    border while the Department explores the long term solution to record
    the entry and exit of persons crossing our land ports of entry. As the
    next phase of US VISIT is implemented at southern land ports of entry
    by the end of 2004, if a Mexican citizen chooses to use the BCC as a
    B1/B2 visa (traveling outside the ``border zone'' and/or staying longer
    than 72 hours in the United States), he or she will undergo US VISIT
    processing at the land border secondary inspection areas. Readers for
    BCC's will be deployed at the 50 busiest land ports of entry by the end
    of June 2004.
        Question. When does the Department plan to move forward with
    revising the rule?
        Answer. We hope to complete our review soon. Once the review of the
    BCC document is complete, we'll be able to make a more informed
    decision regarding this rule.

                      STAFFING OF UNDER SECRETARY'S OFFICE

        Question. The Border and Transportation Security Directorate
    oversees 20 percent of the entire Department's budget--with such
    disparate areas as trade enforcement, airport screening, protection of
    Federal facilities, and training inspectors. Not only is the
    responsibility wide, but it includes arguably the organization with the
    most difficult management problems. For the last year, the Under
    Secretary for Border and Transportation Security's office has relied
    heavily on detailees from within the Department and even from
    organizations outside of the Department of Homeland Security.
    Currently, 56 percent of the filled positions in the office are staffed
    by detailees. Have you been able to move ahead with hiring permanent
    employees? Do you expect the office to be fully staffed by permanent
    employees by the end of fiscal year 2004?
        Answer. We have aggressively pursued the permanent staffing for the
    Office of the Under Secretary. We have entered into an interagency
    agreement with the Office of Personnel Management to provide dedicated
    position classification and staffing services to this office and fully
    expect to have selections made for all permanent staff by the end of
    fiscal year 2004.
        Question. Is the Under Secretary's office staffed properly to allow
    it to oversee and coordinate such a board reach of programs?
        Answer. The Under Secretary's office is properly staffed to oversee
    the Directorate's programs. We appreciate your recognition of the
    challenges within the first year: forming the new bureaus of Customs
    and Border Protection (CBP) and Immigration and Customs Enforcement
    (ICE); fielding US VISIT system requirements on time and within budget;
    maturing the Transportation Security Administration; and reorienting
    Federal Law Enforcement Training Center's mission focus to meet the
    needs of the new Department. The Department continually assesses its
    effectiveness and efficiency, and we will promptly communicate any
    additional resource requirements, as necessary, to ensure we can meet
    our mission requirements.

                        RESEARCH AND DEVELOPMENT FUNDING

        Question. The budget proposes to transfer additional research and
    development programs out of the components within the Border and
    Transportation Security Directorate to the Science and Technology
    Directorate, but it does not transfer all of the programs. Have all of
    these research and development programs been identified? Are there more
    programs that should be transferred to the Science and Technology
    Directorate, such as the Transportation Security Lab within the
    Transportation Security Administration, or the Research, Evaluation and
    Development Branch within the Bureau of Customs and Border Protection?
        Answer. The budget proposes to transfer some Border and
    Transportation Security Directorate research and development programs
    to the Science and Technology Directorate to help improve the
    effectiveness and efficiency for certain programs. The other programs
    have synergies or considerations that require additional consideration
    before change is recommended.
        Question. Do you feel that good working relationships have been
    established between the Border and Transportation Directorate and the
    Science and Technology Directorate? Are the needs of the Border and
    Transportation Security Directorate being met?
        Answer. Yes. Since the start up of the Department, we have worked
    hand in hand with the Science and Technology Directorate. The Science
    and Technology Directorate has established a Border and Transportation
    Security Portfolio Manager. We also have a joint BTS and S&T Technology
    Working Group that is developing a technology roadmap for BTS to ensure
    we leverage technology in the most appropriate manner.

                          PERFORMANCE-BASED PAY SYSTEM

        Question. The Department's budget for fiscal year 2005 includes
    resources to implement the performance-based pay system. Did the Border
    and Transportation Security Directorate play a role in creating the
    framework for this system? Will the needs of the Border and
    Transportation Security Directorate be served by this new system?
        Answer. The Border and Transportation Security Directorate did play
    a role in creating the framework for this system which is being
    designed to meet the needs of all components of the Department. In
    April 2003, the Secretary and the Director of the Office of Personnel
    Management established a DHS/OPM HR Systems Design Team composed of DHS
    managers and employees, HR experts from DHS and OPM, and professional
    staff from the agency's three largest Federal employee unions. The DHS
    employees on this 48 member team represented a cross-section of the
    Department including employees from the following components within the
    Border and Transportation Security Directorate: the Bureau of
    Immigration and Customs Enforcement; the Federal Law Enforcement
    Training Center; the Transportation Security Administration; and the
    Bureau of Customs and Border Protection.
        During April and July of 2003, this team entered a research and
    outreach phase, examining promising and successful practices and
    conducting a series of town hall meetings and focus groups across the
    country in order to inform employees about the design process and to
    solicit employee's perceptions of current HR policies. These outreach
    sessions included employees from across DHS, including a representative
    sample of employees from the Border and Transportation Security
    Directorate.
        As a result of the work of the Systems Design Team, 52 options were
    presented to a Senior Review Committee whose members included two top
    officials from the Border and Transportation Security Directorate:
    Robert Bonner, Commissioner of Customs and Border Protection; and James
    Loy, then Administrator, Transportation Security Administration.
        One of the roles of this Committee was to discuss the work of the
    Design Team and to express views that would inform decisions to be made
    subsequently by DHS Secretary Ridge and OPM Director James regarding
    which systems should be implemented within DHS. The Committee members
    agreed that any new HR system for DHS must be mission-focused and that
    its design must facilitate mission performance and that HR options
    might need to be tailored to specific parts of DHS.
        The proposed regulations published in the Federal Register on
    February 20, 2004, reflect the thoughtful review and consideration by
    Secretary Ridge and Director James of all input received during the
    process as outlined above. It was determined that the regulations, as
    proposed, would best meet the needs of the Border and Transportation
    Security Directorate, as well as the Department as a whole.
        Question. What are the estimates for how much it will cost to
    implement the new performance-based pay compensation system within the
    Border and Transportation Security Directorate?
        Answer. $102.5 million requested in the President's Budget for
    implementation of the new HR system Department wide. BTS' share of
    implementation costs is covered in this request. Costing for design and
    deployment of the new HR system was identified based on independent
    government cost estimates that were developed to plan for the
    anticipated systems integration contract. Other agencies of similar
    size and complexity, notably Treasury, were benchmarked in projecting
    team size and skill levels and associated labor rates. Cost breakouts
    were estimated based on detailed GSA labor category descriptions and a
    skill analysis of the types and levels of contract employees that will
    be needed to support this effort. Major breakdown of costs includes:
    $27 million for program management, oversight and evaluation; $31
    million for training and communications to support system
    implementation; $42 million for detailed systems design and
    implementation support (business process reengineering, compensation
    expertise, etc.); and $2.5 million to fund the HQ performance pool.
        As additional background for each of the major funding categories:
    Centralized program management funding is required to manage
    appropriate cost, schedule, and control activities at the Departmental
    level, ensuring that the system investment is managed appropriately and
    at a good value. Program management funding will also provide for OMB-
    required earned value management, as well as risk management and
    evaluative activities. A centralized program management philosophy,
    rather than each component attempting to manage their own
    implementation, is critical in keeping program costs down and in
    ensuring consistency of deployment across the enterprise.
        Training funds are absolutely essential in ensuring that the new HR
    flexibilities achieve the desired results. Funding is provided to
    adequately train all DHS executives, managers and supervisors on
    aspects of the new system and their responsibilities as leaders in the
    DHS environment. Training funding will also provide for awareness and
    change management activities to ensure that all DHS employees
    understand system changes. Funding will support a comprehensive HR
    certification program to ensure that DHS HR professional are prepared
    for system changes and new job responsibilities.
        Funding for detailed systems design and implementation support is
    required to provide access to experts that will assist in designing the
    particulars of the new DHS performance management system, job
    evaluation system (including the creation of job clusters),
    compensation system (including new pay ranges and market pay
    processes), linkages for pay and performance, and development of
    competencies for DHS positions. This detailed expertise is required to
    ensure that DHS designs a program that appropriately links pay,
    competencies and performance and through that linkage DHS performance
    is enhanced.
        We are projecting fully loaded life cycle costs of $408.5 million
    for complete system implementation. It is important to note that the
    $102.5 million is requested for full implementation of the new system
    (including project management, systems design, training and
    communications, etc.), not just the training aspects of system
    implementation. Major components of this figure include $102.5 million
    for system implementation, $10 million for Coast Guard performance
    pool, an estimated $165 million for other component performance pools,
    and a 6-year life cycle cost of $131 million for human resources
    information technology.
        Question. Is there a timeline as to when each of the components of
    the Border and Transportation Security Directorate will transition to
    this new compensation system? If so, what is it?
        Answer. Current plans provide for all components of the Border and
    Transportation Security Directorate, which are covered by the proposed
    regulations, to be converted to a new compensation system in January of
    2006.

                         TETHERED AEROSTAT RADAR SYSTEM

        Question. The information provided by the Tethered Aerostat Radar
    System, known as TARS, is a critical component in the Department's
    efforts to interdict illicit air traffickers. Do you believe that the
    Department of the Defense is providing sufficient support to the TARS
    program to enable the Air and Marine Program to effectively carry out
    its mission?
        Answer. The TARS program has declined from 14 operational sites to
    8 operational sites (Lajas, Puerto Rico, is due back on-line in May).
    Recent close coordination and meetings between the Department of
    Homeland Security and the Deputy Assistant of Defense for Counter
    Narcotics have resulted in frank and open discussions related to TARS.
    The dialogue is productive and ongoing at this time, and DHS'
    requirements have been acknowledged by DOD. DHS believes that this
    critical system supports homeland security and provides a critical
    detection and monitoring capability. That mission is a DOD
    responsibility. The DHS position is that Congress properly assigned the
    mission to DOD and funded TARS to meet the mission requirements.
        Question. Does the Bureau of Immigration and Customs Enforcement
    have the necessary expertise and personnel to take over the management
    and maintenance of the TARS program?
        Answer. That mission is a DOD responsibility. The DHS position is
    that Congress properly assigned the mission to DOD and funded TARS to
    meet the mission requirements.

                     TRANSPORTATION SECURITY FOR ALL MODES

        Question. Three major grant programs currently administered by the
    Transportation Security Administration involving trucking security,
    port security grants, and Operation Safe Commerce are slated to be
    moved to the Office for Domestic Preparedness under the Department's
    announced reorganization of grant programs. The fiscal year 2005 budget
    proposes to reduce or terminate funding for these programs.
        What funding will be available within the Maritime and Land
    Security operations for fiscal year 2005 to increase security for
    railways, roadways, and all other modes of transportation in light of
    the Administration's proposal to terminate funding for intercity bus
    and trucking grants?
        Answer. The responsibility of securing our Nation's rail and mass
    transit systems is a shared one. DHS, DOT, and other Federal agencies
    are working together to enhance rail and transit security in
    partnership with the public and private entities that own and operate
    the Nation's rail and transit systems. The DHS grant program for
    improving rail and transit security in urban areas has awarded or
    allocated over $115 million since May 2003. Additionally, the
    Administration has requested $24 million for TSA to advance security
    efforts in the maritime and surface transportation arenas, and has
    requested that $37 million of the Federal Transit Administrations Urban
    Security Bus grants be available for security related projects. In
    addition, DHS will conduct the following activities and initiatives to
    strengthen security in surface modes:
      --Implement a pilot program to test new technologies and screening
            concepts to evaluate the feasibility of screening luggage and
            carry-on bags for explosives at rail stations and aboard
            trains;
      --Develop and implement a mass transit vulnerability self-assessment
            tool;
      --Continue the distribution of public security awareness material
            (i.e., tip cards, pamphlets, and posters) for motorcoach,
            school bus, passenger rail, and commuter rail employees;
      --Increase passenger, rail employee, and local law enforcement
            awareness through public awareness campaigns and security
            personnel training;
      --Ensure compliance with safety and security standards for commuter
            and rail lines and better help identify gaps in the security
            system in coordination with DOT, with additional technical
            assistance and training provided by TSA;
      --Continue to work with industry and State and local authorities to
            establish baseline security measures based on current industry
            best practices and with modal administrations within the DOT as
            well as governmental and industry stakeholders, to establish
            best practices, develop security plans, assess security
            vulnerabilities, and identify needed security enhancements; and
      --Study hazardous materials (HAZMAT) security threats and identify
            best practices for transport of HAZMAT.
        Question. How will the Transportation Security Administration
    coordinate with the Office for Domestic Preparedness on the grant
    programs (trucking security, port security grants, intercity bus
    grants, and Operation Safe Commerce) that will be moved pursuant to the
    reorganization?
        Answer. It is anticipated that TSA will continue to provide the
    necessary operational expertise for the grant programs through
    participation in pre-award management functions. These functions
    include determination of eligibility and evaluation criteria,
    solicitation and application review procedures, selection
    recommendations and post award technical monitoring. TSA will also
    continue to leverage existing transportation expertise by working with
    industry stakeholders and DOT modal administrations to ensure that
    Federal security grants facilitate the seamless integration of security
    planning activities by industry stakeholders and governmental
    stakeholders at the regional, State, and local levels.
        Question. In addition to the $169 million made available for the
    port security grant program by the Transportation Security
    Administration, $75 million was made available in fiscal year 2003 by
    the Office for Domestic Preparedness for the same purpose. Do you
    anticipate that funds will be made available once again for port
    security grants within the existing grant programs in the Office for
    Domestic Preparedness?
        Answer. The fiscal year 2005 President's budget requests $46
    million for Port Security Grants under the Office for Domestic
    Preparedness.

             TSA'S ROLE WITHIN THE DEPARTMENT OF HOMELAND SECURITY

        Question. Over 54 percent of the President's budget request for the
    Transportation Security Administration for fiscal year 2005 is
    dedicated for aviation passenger and baggage screeners' pay, benefits,
    training, and human resource services. Last year, Admiral Loy testified
    that the Transportation Security Administration was developing a
    National Transportation System Security Plan (NTSSP) to explain ``its'
    vision to complete the important task of ensuring the security of all
    modes of transportation, not just the aviation sector''.
        Will the Transportation Security Administration continue to have
    responsibility for security over all sectors of transportation or will
    aviation security continue to be the main focus for TSA?
        Answer. Ensuring that our Nation's transportation systems are
    secure must be accomplished through effective partnering between
    appropriate Federal, State, local and private industry entities.
    Although TSA was created in the wake of the September 11 attacks and
    charged with responsibility for ensuring that all modes of
    transportation are secured, the Administration has consistently held
    that that this responsibility must involve the coordination of
    appropriate Federal, State, local and private industry partners, many
    of whom were already in the business of providing security for their
    particular piece of the transportation puzzle. TSA's main charge, both
    under ATSA and now as part of the DHS family, is to coordinate these
    efforts under the guidance of the Secretary and the Under Secretary for
    Border and Transportation Security, identifying gaps and working with
    appropriate partners to ensure that existing security gaps are filled.
        Recognizing this, the Department of Homeland Security (DHS) has
    requested substantial resources in fiscal year 2005 across the agencies
    within the Department involved with securing transportation modes other
    than aviation, including resources in the Coast Guard and Customs and
    Border Protection (CBP) for ports, maritime security, and cargo
    security; in Information Analysis and Infrastructure Protection (IAIP)
    for vulnerability assessments, intelligence, and infrastructure
    protection for all sectors including transportation; and in Emergency
    Preparedness & Response (EP&R) for emergency response to only name a
    few. In addition to working with other DHS components, TSA works
    closely with our sister Federal agencies outside of DHS to ensure that
    all government resources are maximized. For example, under the
    leadership of BTS and DHS, TSA is coordinating key standards-setting
    efforts in areas such as transit and rail security, and is working
    closely with modal administrations of the Department of Transportation
    to help leverage their existing resources and security efforts to
    accomplish security goals.
        Question. When can we expect the National Transportation System
    Security Plan and what role will the Transportation Security
    Administration play in securing all modes of transportation?
        Answer. TSA's role in securing the transportation system begins at
    the system or sector-wide level, across the individual modes, thus
    ensuring consistency and consideration of inter-modal issues (such as
    assets, incidents, or supply chains that straddle multiple modes, and
    inter-modal exercises). The Department of Homeland Security (DHS) has
    assigned TSA primary Sector Specific Responsibility (SSR) for the
    Transportation Sector as DHS implements Homeland Security Presidential
    Directive 7 (HSPD-7), which directs the establishment of ``a national
    policy for Federal departments and agencies to identify and prioritize
    United States critical infrastructure and key resources and to protect
    them from terrorist attacks.'' In accordance with DHS's HSPD-7
    implementation plan, TSA is developing the Transportation Sector
    Specific Plan (SSP). A first draft of the SSP is due to DHS by early
    summer, 2004 (at the same time when SSPs from the other 12 sectors of
    critical infrastructure are also due). In developing the transportation
    SSP, TSA is working under BTS guidance and with partners in the U.S.
    Coast Guard and the Department of Transportation (DOT). The SSP will
    discuss how Federal and private-sector stakeholders will communicate
    and work together; how important assets in the transportation sector
    will be identified, assessed, and prioritized; how protective programs
    will be developed; how progress in reducing risk will be measured; and
    how R&D will be prioritized in the sector. In the Transportation
    Sector, the SSP will further these efforts currently underway and help
    ensure that they are systematic, complete, and consistent with the
    efforts in the other 12 sectors.
        Prior to the issuance of HSPD-7, TSA was TSA was developing the
    National Transportation System Security Plan (NTSSP). Its purpose was
    to provide a systematic sector-wide approach to Transportation
    Security, to pull all Federal partners into the effort together, and to
    provide guidance to the writers of Modal Security Plans. Now HSPD-7 is
    driving an economy-wide systematic approach to Infrastructure
    Protection, including the Transportation SSP described above. The SSP
    will be expanded into a ``new'' NTSSP, by adding additional chapters
    (some already drafted in the ``old'' NTSSP) to complete the original
    intent of the NTSSP. This includes guiding development of Modal
    Security Plans, providing explicit links to other Federal plans such as
    the National Response Plan (NRP) and the National Incident Management
    System (NIMS), and other operational guidance. On behalf of DHS and in
    conjunction with other Federal agencies, the completed NTSSP will guide
    and integrate a family of security plans to prevent, mitigate, and
    respond to intentional disruption of the Nation's transportation
    systems while ensuring freedom of movement for people and commerce.
        Parts of the draft ``old'' NTSSP are already in use, as the USCG
    drafts the MTSA-mandated Maritime Transportation Security Plan, and as
    other modal security plans begin development. A draft of the ``new''
    NTSSP should be completed by the end of summer, 2004.
        TSA's role within each sector will vary from mode to mode. In
    aviation security, TSA has the operational and regulatory lead role.
    TSA's efforts in non-aviation security over the past 2 years have
    focused on greater information sharing between industry and all levels
    of government, assessing vulnerabilities in non-aviation sectors to
    develop new security measures and plans, increasing training and public
    awareness campaigns, and providing greater assistance and funding for
    non-aviation security activities. In partnership with other component
    agencies of DHS and in coordination with DOT, State, local and private
    sector partners, TSA will continue to leverage existing security
    initiatives, coordinate the development of national performance-based
    security standards and guidance; identify areas where regulations may
    be necessary to improve the security of passengers, cargo, conveyances,
    transportation facilities and infrastructures; and identify areas where
    better compliance with established regulations and policies can be
    achieved. TSA will work with DHS components, modal administrators
    within DOT, and its government and industry stakeholders to continue
    these efforts, establish best practices, develop security plans, assess
    security vulnerabilities, and identify needed security enhancements.
        Question. The Homeland Security Act of 2002 requires the
    Transportation Security Administration be maintained as a distinct
    entity within the Department of Homeland Security for 2 years from the
    date of enactment with the sunset of the Transportation Security
    Administration as a distinct entity within the Border and
    Transportation Security Directorate to occur November 2004. How do you
    envision the Transportation Security Administration's role within the
    Department of Homeland Security if not maintained as a separate
    distinct entity in the Border and Transportation Security Directorate?
        Answer. The Homeland Security Act requires that TSA be maintained
    as a distinct entity for 2 years after enactment. As an integral part
    of the Border and Transportation Security Directorate, TSA is currently
    providing a robust security framework in the aviation environment and
    coordinating closely with other DHS and DOT partner agencies both to
    identify security vulnerabilities in other modes of transportation and
    identify appropriate mitigation strategies to reduce those
    vulnerabilities. Further, TSA is coordinating Federal efforts to
    develop the transportation chapter of the National Critical
    Infrastructure Protection Plan (NCIP) being developed as a result of
    Homeland Security Presidential Directive (HSPD) number 7. At this time
    there are no plans to alter TSA's status as a distinct entity within
    the BTS Directorate; however, the Secretary continually reviews the
    missions and programs of each DHS component to ensure that they
    complement, rather than duplicate the missions of any other. In the
    event that the Secretary decides, under authority conferred upon him by
    Section 872 of the Homeland Security Act, to reorganize any of the
    components of the Department including the TSA, appropriate
    notification will be provided to relevant Congressional committees by
    the President.

                        FEDERAL SCREENER OPT-OUT PROGRAM

        Question. The Aviation and Transportation Security Act passed
    shortly after the terrorist attacks of September 11, 2001, provided for
    the ability of airports to apply to the Department of Homeland Security
    to opt-out of using Federal screeners and to use qualified private
    screening companies at the end of a 3-year period which occurs this
    November 2004.
        When do you anticipate the results of the Department's study on the
    private screening companies that have been providing passenger
    screening at the five airports participating in the pilot program will
    be made available?
        Answer. TSA hired BearingPoint to conduct an independent
    performance evaluation of the private contractor screening compared to
    Federal screening. The study evaluated performance in security,
    compared costs, and analyzed customer/stakeholder satisfaction. It
    concluded that TSA has succeeded in developing and executing a pilot
    program that both meets the Congressional requirements and ensures
    outstanding security. Results of the study were made public on April
    22, 2004 and are available on TSA's web site at http://www.tsa.gov/
    interweb/assetlibrary/Summary_Report.pdf.
        Question. Do you feel that there will be a large number of airports
    that will apply to use private screeners rather than continue to use
    Federal screeners?
        Answer. Under ATSA, individual airports may, starting on Nov 19,
    2004, submit proposals to ``opt out'' of having Federal passenger and
    baggage screening and to return to private companies providing those
    security services under contract to and close oversight by TSA. TSA
    continues to work with its key stakeholders for the development of an
    application process for airports who are interested in opting out. TSA
    is in the early stages of developing an efficient, understandable, and
    effective procedure for opt-out applications and is currently drafting
    the specific contents of the opt-out guidance. At this time, it is
    still unclear how many airports will seek to opt out. Most airports are
    awaiting additional details regarding the application process and
    parameters of the program before making a decision. Should an airport
    request to opt out, its application must be assessed and approved by
    the TSA Administrator. TSA is committed to ensuring a fair, supportive
    transition program that recognizes the outstanding skills of TSA's
    current work force.
        Question. With the opt-out date approaching rapidly, when do you
    anticipate providing guidelines, application procedures, and approval
    criteria for the airports that are trying to decide whether or not to
    apply to use private screening companies?
        Answer. TSA is currently working to develop guidelines for the opt-
    out program. TSA hopes to release initial guidance in late May or early
    June. This guidance will consist of an overview of issues such as,
    indemnification and reimbursement to contractors, the application and
    award process, and delineating clear roles and authority for TSA
    headquarters, the Federal Security Directors and their staff, and the
    airports and contractors, that will help airports gauge their level of
    interest in the opt-out program.
        Question. With $119 million provided this year for the private
    screening pilot programs and only a $10 million increase requested for
    fiscal year 2005, how do you anticipate providing funding for
    additional airports that may apply to use private screeners?
        Answer. The Administration did not request a separate funding line
    item for private screening for precise reason that we cannot predict in
    advance what airport interest will be in an opt-out program. All
    funding requested was rolled up into one screener line, and it is
    critical that the Congress provide maximum flexibility to allocate
    resources. Supporting budget documents showed a level of $130 million
    purely for display and comparability purposes. This amount will provide
    sufficient resources to maintain contract screener operations at the
    five pilot airports through the end of fiscal year 2005. Actual funding
    needs for contract screening operations may be higher or lower
    depending on a variety of factors such as the current evaluation of
    contract screening, the program's future deployment and management
    structure, the level of interest garnered from the airport community,
    and the time it takes to smoothly transition airports into and/or out
    of contract screening. TSA will adjust resources between Federal and
    contract screeners as necessary.

                    FEDERAL LAW ENFORCEMENT TRAINING CENTER

        Question. The United States Coast Guard and the Federal Law
    Enforcement Training Center recently announced plans to transfer the
    United States Coast Guard's Maritime Law Enforcement School to the
    Federal Law Enforcement Training Center in Charleston, South Carolina.
    What impact will this proposed change have on the Department of
    Homeland Security and what additional fiscal year 2005 funding will
    this consolidation require?
        Answer. At the U.S. Coast Guard's request, the Maritime Law
    Enforcement School located at Coast Guard Training Center Yorktown, VA,
    and the Boarding Team Member School located at Coast Guard Training
    Center Petaluma, CA, will be merged, relocated and commissioned as the
    Coast Guard Maritime Law Enforcement (MLE) Academy at the Federal Law
    Enforcement Training Center in Charleston, SC, by October 1, 2004. Both
    the Coast Guard and the entire Department of Homeland Security (DHS)
    will benefit by this consolidation of law enforcement training
    functions. To reflect the increase in Coast Guard mission capabilities
    and training requirements, the MLE Academy will be established to
    provide expanded training for their personnel in support of maritime
    homeland security and law enforcement. The MLE Academy will provide for
    the training of maritime law enforcement capabilities central to all
    Coast Guard maritime security missions. The MLE Academy will also
    provide training to local and State law enforcement personnel in
    support of the Federal Boat Safety Act. It will cost approximately $4
    million to relocate the Coast Guard MLE Schools to the FLETC
    Charleston. This includes one new building, a personal defensive
    tactics building. The FLETC will fund $2 million for construction and
    renovations. The U.S. Coast Guard will fund approximately $2 million
    for transportation of existing equipment, relocation of personnel,
    dependents and household goods, boarding platform training aids,
    installation of a simunitions lab and telecommunications
    infrastructure.
        The Coast Guard will move 50 positions (FTP) to Charleston, SC. The
    positions come from the USCG training centers at Yorktown, VA (36) and
    Petaluma, CA (14).
        The Coast Guard estimates it will train 1,872 students annually.
        The affiliation and co-location with of the Coast Guard with the
    FLETC provides them a first step towards standardization. It will
    enhance their law enforcement training and promote better coordination
    among field activities with their sister agencies. Both the Coast Guard
    and the entire Department of Homeland Security (DHS) will benefit by
    this consolidation of law enforcement training functions. The Homeland
    Security Act consolidated 22 agencies in creating the Department of
    Homeland Security, and established Law Enforcement as one its core
    missions. The Maritime Transportation Security Act (MTSA) directed the
    integration of standards and training curriculum for ``maritime
    security professionals.''
                                     ______

                Questions Submitted by Senator Richard C. Shelby

        Question. Over the last two funding cycles, Congress has provided
    $85 million to the TSA for development, tech evaluations, pilot
    programs, and rollout of a Transportation Worker Indentification Card
    (TWIC). How many TWIC cards have been issued to date? What has the TSA
    spent this $85 million on?
        Answer. The Consolidated Appropriations Resolution, 2003, provided
    $35M for the Transportation Worker Identification Credential (TWIC) and
    Registered Traveler (RT) programs. Of this total, $25 million was
    initially assigned to TWIC, and $10 million was assigned to RT. TWIC
    spent a total of $15 million on planning and executing the Technology
    Evaluation Phase. TSA internally reallocated $5 million and returned
    the remaining $5 million to the Treasury. The $10 million for RT was
    subsequently reallocated internally. The fiscal year 2004 Appropriation
    Act provided $50 million to TWIC to support planning and execution of
    the Prototype Phase. Our most recent analysis indicates that $50
    million is sufficient for this task. To date no operational TWIC cards
    have been issued. It is estimated that up to 200,000 cards may be
    issued during the Prototype Phase.
        Question. When Congress tasked TSA and the Department of
    Transportation with developing a plan to protect our transportation
    infrastructure, Secretary Mineta moved forward with a vision for how a
    transportation credential should work. Unfortunately, implementation
    appears to have been hindered by poor leadership and a shifting idea of
    what TWIC should be and how it should be implemented. Where is the
    problem?
        Answer. TWIC development continues to move forward as planned.
    During the early stages of the development process, data, technical
    information and lessons learned were gathered from a wide range of
    sources including industry stakeholders and other Federal credentialing
    projects. The RFP for the TWIC Prototype Phase will be released in the
    immediate future. The proposed plan leverages the stakeholder
    relationships established over the past 24 months and during the
    Technology Evaluation Phase, as well as a partnership with the State of
    Florida for the network of deep-water ports. The goal of the prototype
    is to evaluate the full range of TWIC business processes within a
    representative operational environment. The plan includes facilities
    and workers from all transportation modes and is focused in three
    regions, Philadelphia-Wilmington, Los Angeles-Long Beach, and the
    Florida ports.
        Various card production options were evaluated within the context
    of system requirements. Centralized card production using existing
    Federal card production facilities that meet all of the system
    requirements was determined to be the most cost effective solution for
    the prototype phase. Key factors in the evaluation included: physical
    security and controlled access to the production process; secure supply
    chains for card stock and special security features (e.g. holograms,
    special inks, secret keys); standardization of training; and, economies
    of scale with high capacity production machines. Centralized card
    production will be further evaluated during the prototype, and the
    final evaluation report will include a detailed analysis on all card
    production options and a recommendation for DHS decision.
        Question. According to your written testimony, you have combined
    the credentialing under one program and have requested $20 million for
    that line item. I am told that this request is nearly $100 million
    below the level TSA needs to implement the program for only the highest
    risk areas and fully $150 million below the level needed for full and
    timely implementation system wide. How do you plan to make up this
    shortfall?
        Answer. The fiscal year 2005 President's Request includes $50
    million in fee spending authority for the TWIC program. As prototype
    planning continues, we have continued to explore questions surrounding
    the population size, technological requirements, and methods for
    achieving rapid implementation. This planning will be shared with
    Congress once completed.
        Question. It is my understanding that while the fiscal year 2003
    bill required a thorough evaluation of all technologies, the $85
    million would be adequate to evaluate and establish a basic framework
    and prototype for a TWIC. Why now are you asking for more money to
    complete this part of the project?
        Answer. The funds that have been provided by Congress have enabled
    TSA to complete the planning and technology evaluation phases and will
    enable TSA to execute the Prototype Phase. In anticipation of a
    successful completion of the prototype with positive results, TSA is
    requesting $50 million in fiscal year 2005 to begin TWIC
    implementation.
        Question. Does TSA anticipate establishing a fee for the access and
    administration of the TWIC? If so what will this fee fund? When can we
    expect these programs to be fully underway?
        Answer. The TWIC concept is a Federally-led public-private
    partnership to improve security across the transportation system.
    Accordingly, as authorized by Congress, TSA envisions that a fee would
    be collected for each credential issued and would fund the cost of
    enrollment, card production and issuance, identity management, network
    infrastructure, and revocation alerts. Transportation facilities will
    be responsible for access control systems and any modifications that
    they choose to make in accordance with their own security plans.
        The Prototype Phase is planned to be implemented over 7 months.
    Upon completion of Prototype, DHS will review the data and decide how
    best to implement the findings. TSA anticipates that we could begin
    shortly thereafter to execute that decision.
        Question. As I remember the original timetable, our ports and
    greater transportation system should now be operating under a
    credentialing system that will provide increased security through use
    of a TWIC card and the requisite card readers and databases. The TSA
    TWIC website outlines the three goals of the program as to: improve
    security, enhance commerce, and protect personal privacy. Has the
    lengthy process in some way increased the potential of accomplishing
    these goals? What are we getting for increased costs and missed
    deadlines?
        Answer. The evolution of the program will result in a more robust
    Prototype Phase that incorporates a process for collecting data that
    will allow the exploration of multiple options for TWIC implementation,
    including detailed cost-benefit analysis, assessment of feasibility of
    use by facilities multiple disparate business practices, and more
    inclusive, in-depth consultations with stakeholders.
        Question. What have you done to ensure the security of the card?
    Can you offer me assurances that the security efforts you have taken
    will stand up to the test?
        Answer. TWIC views security from a system perspective. TWIC is not
    just a secure ID card, but it is also an identity management solution
    that leverages advanced security technology and procedures to deliver
    an overall chain of trust. Both the Technology Evaluation Phase and the
    upcoming Prototype Phase include extensive evaluation of security
    features, and security testing and evaluation will be an ongoing part
    of the TWIC program.
        For the card specifically, TWIC is using advanced security features
    that leverage the strength of the core technology. The surface-based
    technology will include special inks, security overlays and complex
    visual design features that will counter attempts to forge or tamper.
    The Integrated Computer Chip (ICC) is based on the NIST Government
    Smart Card Specification and complies with a number of security
    protocols and validations. The ICC includes encryption, secret keys,
    and active defenses. TWIC will also use a biometric securely embedded
    in the ICC to link the individual positively to the completed
    background check and to updates to that background check.
        Question. Concerns have been raised that TWIC will hinder rather
    than enhance commerce. Can you provide data on what kind of delays will
    occur due to TWIC access requirements?
        Answer. One of TWIC's three goals is the enhancement of commerce.
    The TWIC architecture was developed using extensive stakeholder inputs.
    The TWIC Integrated Project Teams (IPT) have been working with regional
    stakeholders to develop site level implementation plans, which will
    enhance commerce at these sites. During the Technology Evaluation
    Phase, access control transaction times were measured using a range of
    technologies. These results were incorporated into the planning for the
    Prototype Phase, which will further refine the process. The Prototype
    Phase evaluation report will include extensive data on all aspects of
    access control transactions, including time and impact to the
    commercial process.
        Question. Delays are causing problems down the line for my, and I
    am sure many other senators, constituents. Recently, I was asked by one
    of my constituents whether they should move forward with their own
    credentialing system upgrades. I was remiss to inform him that it did
    not appear TWIC would be available for use in the foreseeable future.
    My constituent informed me that because of these delays he would be
    forced to move forward with upgrades of his own that may or may not
    work within the TWIC system. It seems ridiculous to force constituents
    committed to security to invest in multiple technologies. Mr.
    Secretary, that does not appear to enhance commerce to me, does it to
    you? Are we supposed to have a seamless system?
        Answer. TSA shares your determination to maximize the benefits of
    TWIC while minimizing financial or technological burdens on
    stakeholders. Consequently, a guiding principle in the design of TWIC
    is that the credential be interoperable with existing security systems.
    TWIC envisions a secure identity management tool that can be used in
    existing access control systems. TSA is communicating with stakeholders
    in order to update them on the direction of our work and thereby assist
    them to make informed decisions about security investments.
        Question. In addition, I am always concerned about the privacy of
    individuals. Many have raised concerns about the TWIC and its
    relationship to a national ID system. How will you protect the
    information? How will you guarantee the security of the personal
    information required to attain the TWIC?
        Answer. Protection of personal privacy is one of the program's key
    goals, having been seamlessly integrated in planning from the initial
    system design. The DOT lead privacy advocate was a member of the
    original design team. The TWIC team has and will continue to work with
    the DHS and TSA Privacy Officers to ensure that TWIC remains faithful
    to our stated goals.
        TWIC recognizes that acceptance of the credential is inexorably
    linked to the holder's confidence that his or her privacy will be
    respected. TWIC is designed to operate on the minimum amount of
    personal information, which will be securely stored and encrypted.
    Access to personal information will be controlled and auditable. All
    information that will be gathered is subject to a formal privacy impact
    assessment.
        Question. The focus of TSA and the Directorates funding is towards
    Airline Security. As I understand it, the TWIC will increase security
    across the transportation system as a whole. In fact, at some point
    Admiral Loy characterized TWIC as a ``Flagship Program''. If this is a
    ``Flagship Program'', what is the delay in implementation? What are you
    doing to fix this problem?
        Answer. TWIC remains an important initiative for DHS and TSA. The
    longer timeline is indicative of the need to explore different options
    on how best to implement an identity management system for
    transportation workers across multiple facilities, consultation with
    stakeholders, and to incorporate learning into the development process.
        Question. Mr. Secretary, what have you done to ensure that
    evaluation of TWIC moves forward in a manner that does provide the tax
    payer with a safe and secure transportation system, while improving the
    flow of commerce and constantly ensuring our citizens privacy?
        Answer. We recognize the urgency of the advancing this program. The
    Prototype Phase is scheduled to begin in the summer of 2004 and last 8
    months. We are committed to a fast track process for review of the
    results of the Prototype Phase and making final decisions on
    implementation.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                 CAPPS II--AIRLINE PASSENGER INFORMATION SYSTEM

        Question. Mr. Secretary, the fiscal year 2004 Homeland Security
    Appropriations Act included a provision requiring the General
    Accounting Office (GAO) to review the privacy and security of the
    proposed CAPPS II airline passenger pre-screening system. Last month,
    the GAO submitted a report to us that stated that your Department has
    met only one of the eight criteria that we set out before you could
    move ahead with deployment of the system.
        I understand that the Department concurs with GAO's findings. Where
    is DHS now in testing of the CAPPS II system? What is your timeframe?
    How long do you expect to test the system?
        Answer. Seven of the eight areas identified by the Congress could
    not be certified by the GAO as having been completed, as they are
    contingent on testing of CAPPSII. System testing can only begin once
    TSA obtains a significant quantity of PNR data from airlines or from
    U.S. Customs and Border Protection (CBP) under the terms of an
    agreement DHS reached with the European Commission for CBP's use of
    such data. However, the agreement has not yet been ratified by the
    European Parliament. Once PNR data is received for testing purposes, 30
    days is required for evaluation of the data. Testing will then be
    conducted for 30 days, followed by 30 days for analysis of the test
    results. Once testing is complete, the seven remaining areas of
    interest to the Congress can be certified by the GAO.

                               CAPPS II--TESTING

        Question. One of the concerns about the testing of the proposed
    CAPPS II system has been the lack of access to actual traveler data to
    test the system. Airlines have been reluctant to voluntarily provide
    data because of the very real concerns of privacy groups about how that
    data will be used. Some have stated that this lack of data for testing
    is one of the reasons why some of the specific criteria laid out in the
    Appropriations Act have not been met. There is some speculation that
    the Department is planning to issue regulations to compel airlines to
    provide data for the purposes of testing.
        Can you confirm for the Subcommittee whether the Department is
    planning to compel airlines to provide data on travelers for the
    purposes of testing CAPPS II? Will you provide this Subcommittee notice
    of your plans prior to making any public notice? Also, of the funds
    requested for this program in the fiscal year 2005 budget request, what
    is requested solely for additional testing of the program--as opposed
    to implementation and operation of the system?
        Answer. TSA plans to use the Notice of Proposed Rulemaking (NPRM)
    vehicle to seek public comment on the collection of Passenger Name
    Record (PNR) data for the operation of the CAPPS II program, and would
    likely issue an order compelling the collection of historical PNR data
    for testing purposes simultaneously with publication of that NPRM. Each
    of these documents would require regulated parties to take reasonable
    steps to ensure that passengers are provided notice of the purpose for
    which the information is collected, the authority under which it is
    collected, and any consequences associated with a passenger's failure
    to provide the information.
        As mentioned above, system testing can only begin once TSA obtains
    a significant quantity of PNR data from airlines or from U.S. Customs
    and Border Protection (CBP) under the terms of an agreement DHS reached
    with the European Commission for CBP's use of such data. However, the
    agreement has not yet been ratified by the European Parliament.
        There are two components to the plan for CAPPS II testing: testing
    with historical PNR data and full system testing that would take place
    once connectivity is established with an airline to test with live
    data. TSA estimates the cost associated with completing system and
    performance testing at $5 million. This involves testing to the system
    ``end to end'' to validate the ability of the system to receive all of
    the different types of records from the airlines and post the results
    of the risk assessment to the boarding pass. Once system testing has
    been completed, performance testing is required to verify that the time
    required to complete each end-to-end transaction meets the system
    performance standards.

         FINGERPRINT DATABASE INTEGRATION: VASTLY DELAYED AND DANGEROUS

        Question. Last week, Department of Justice Inspector General Glenn
    A. Fine released a report that examined the case of a Mexican citizen,
    Victor Manual Batres, who had been detained by the Border Patrol on two
    occasions in January 2002 for illegally entering the United States.
    Both the Department of Justice and the Department of Homeland Security
    say they recognize that the databases need to be integrated, however
    the IG report found uncertainty as to who is responsible for the
    overall management of the integration project. It states that Justice
    and Homeland have yet to enter into a memorandum of understanding
    delineating the specific roles and responsibilities of each agency in
    the project. It also finds that the integration project recently has
    been slowed by the attention placed by Homeland on other technology
    projects, such as US VISIT. You may recall that I raised this issue
    with Secretary Ridge last year when he met with Senator Cochran and me
    to discuss fingerprint database integration as it related to US VISIT.
    Last week, Secretary Ridge acknowledged this problem and pledged to
    find $4 million this year to begin to ``fix'' it. From which sources
    will you find these funds and when can we expect to receive a
    reprogramming or transfer proposal?
        Answer. The Department of Homeland Security is committed to
    accelerating implementation of IDENT/IAFIS 10 fingerprint capability
    for enforcement processing at ports of entry, and at Border Patrol
    locations and Immigration and Customs Enforcement offices.
        While we begin planning our implementation plan, we plan on using
    $4 million of the remaining funds provided in Public Law 107-117
    (fiscal year 2002 counter-terrorism funding) for IDENT/IAFIS
    implementation. The $4 million, when combined with fiscal year 2003
    funds already provided ($3.5 million obligated for IDENT/IAFIS), will
    allow BTS to implement IDENT with 10 print capabilities in secondary
    inspection at 115 airports, 14 seaports and 50 of the largest land
    border ports. In addition, this funding will support implementation of
    the IAFIS/IDENT 10 print capability at 70 percent of the Border Patrol
    stations. The remaining land ports of entry, 30 percent of the Border
    Patrol stations and major ICE locations (to be determined) will receive
    this capability early in calendar year 2005. Funding for fielding these
    capabilities is estimated to be approximately $3 million, including the
    implementation of IDENT/IAFIS at Border Patrol stations will provide
    the capability to biometrically identify and/or perform status
    verifications on individuals suspected of illegally crossing the
    border. Implementation at ICE offices will support investigation of
    individuals apprehended for overstays and/or watch list hits.
        Question. The IG report made a series of recommendations to
    expedite integration of IDENT/IAFIS. Does this mean that your
    Department will take the lead responsibility in merging these data
    bases so that similar tragedies can be prevented in the future? How
    long will a full integration take and how much is it likely to cost?
        Answer. Yes, the Department of Homeland Security will work with the
    Department of Justice to accelerate our integration into the FBI's
    IAFIS (10 print, criminal history) and the legacy INS IDENT (2-print,
    immigration) systems. An integrated workstation has already been
    developed. It has been deployed to a limited number of sites. DHS
    intends to complete deployment of this capability in 2005. The total
    cost for fielding the capability is expected to be $7 million and will
    be funded within existing resources.

                         FEDERAL AIR MARSHALS: STAFFING

        Question. Your budget request for the Federal Air Marshals is
    essentially a flat-line request similar to last year's funding level.
    Yet on two occasions in less than a year--late last summer and again
    over the recent winter holidays--you increased the threat level to Code
    Orange--in large part because intelligence and other indicators lead
    you to believe there were enhanced threats to the United States via
    airplanes flying into or over this country.
        However, based on budget briefings with my staff, I understand that
    the resources directed to this program are not sufficient to hire the
    number of Air Marshals that should be hired to maintain a more robust
    presence on targeted flights. If that is indeed accurate, why are you
    not requesting more funding for hiring additional air marshals,
    expanding their training, and increasing the tools at their disposal
    for protection of airplanes and their passengers?
        Answer. The Department of Homeland Security (DHS) continues to view
    the Federal Air Marshal Service (FAMS) as a fundamental component of
    our national security plan and overall counter-terrorism efforts. The
    services provided by the FAMS are integral to our efforts to instill
    and sustain public confidence in our civil aviation system and for
    providing an expanded law enforcement capability in our skies that
    previously did not exist. In fact, within the span of roughly two and a
    half years the FAMS has fielded a trained work force of literally
    thousands of Federal Air Marshals to protect America's citizens and
    interests in our commercial air transportation system.
        In this same time, DHS has also worked with the Congress to invest
    in, develop and implement a layered security plan that encompasses the
    coordinated efforts of an entire spectrum of Federal, State and local
    agencies. These agencies are working together to provide an array of
    intelligence, enforcement and protection services to our civil aviation
    system, our borders and to other areas vital to the Nation. Under this
    strategy, we have established mechanisms and programs designed
    specifically to complement one another within the limited resources
    afforded to the Department. For example, DHS has invested in cutting
    edge technology to airport and baggage screening activities; we have
    hardened cockpit doors; we have established a Federal flight deck
    officer training program; and we are continuously working to apply the
    latest intelligence information in shaping our decision-making and
    response to terrorist threats.
        The Department has also evaluated how to best use Federal Air
    Marshals to expand their effectiveness and overall impact. The FAMS was
    recently transferred from the Transportation Security Administration
    (TSA) to the U.S. Immigration and Customs Enforcement (ICE). This
    fusion of the FAMS into ICE not only establishes an integrated
    enforcement presence in the aviation sector; it enhances ICE's overall
    capabilities and resources to enforce its mission, which is to detect
    and prevent vulnerabilities or violations that threaten the Nation's
    homeland security. Furthermore, this realignment has made possible
    other initiatives such as the Mission Surge Program, which will pair
    Federal Air Marshals with ICE agents during peak threat periods, such
    as the Code Orange alerts or other such events.
        In addition to Mission Surge, the Department is also evaluating
    ways to capitalize on the presence of thousands of Federal law
    enforcement personnel using the civil aviation system to travel on a
    daily basis. Although these personnel cannot replace a Federal Air
    Marshal, they are armed and capable of providing a level of security in
    the case of an in-flight event. This initiative, known as the Force
    Multiplier Program, is in its infancy.
        Through this layered approach, the Department continues to make
    significant progress in our counter-terrorism efforts and capabilities.
    The Department will continue to work with you and other members of the
    Congress towards addressing your concerns and best meeting the Nation's
    homeland security requirements.

                           US VISIT: FULL DISCLOSURE

        Question. Last year Secretary Ridge took the old visa tracking
    system known as ``entry-exit'' and as one of his first acts he gave it
    a snazzy new name befitting the new Department--US VISIT--or the United
    States Visitor and Immigrant Status Indicator Technology. He also
    committed that US VISIT would be operational at all of our Nation's
    international airports and seaports by January 1, 2004. After some
    lobbying by the airlines, who were concerned about possible problems
    standing up the system--and leery of the prospect of long lines of
    weary holiday travelers, he pushed back the operational day to January
    5. By all accounts, the system worked, there were few technical
    glitches and, as you noted in your testimony, some bad actors have been
    caught by the new system. That is all to the good--as we want to know
    who is entering and existing our country. Indeed, Congress first
    started calling for an ``entry-exit'' system back in 1996.
        But there seems to be a disconnect. There seems to be a bit of
    over-selling of this program by the Secretary and the Department and
    the Administration. It is true that we are capturing information and
    checking fingerprints and photos with visa holders who are entering our
    country at 115 airports and 14 seaports--but do not pop the champagne
    just yet. At how many airports are we currently capturing information
    to verify who is exiting the country? One. At only one airport out of
    115 are we learning who is exiting our country. The same holds true of
    exit information at our seaports--one out of 14.
        Secretary Hutchinson, this troubles me. I am troubled that an
    extremely important security program--and one that I support--is being
    inaccurately represented. It is being presented as more than it truly
    is. And I am concerned that if the Secretary and the Department can
    make the claim that they met the deadline to get this program started--
    when only half of the job is done for this first phase, how can we and
    the American people know that the next deadline is truly met? And, if
    you cannot meet your own self-imposed deadline for a relatively-easy
    system in a controlled environment (people waiting to board a plane),
    how can we be certain that you will meet your next deadline which we
    understand is verifying the entry and exit of visa holders at our 50
    largest land border ports-of-entry?
        Answer. As stated in the record, the first Congressional mandate
    for an electronic entry and exit system was in 1996. In 2000, the
    Immigration and Naturalization Data Management Improvement Act (DMIA)
    fully amended and replaced section 110 of the Illegal Immigration
    Reform and Immigrant Responsibility Act of 1996. Under the provisions
    of the DMIA, the Administration is required to integrate all authorized
    or required alien arrival and departure data that are in electronic
    format in existing systems maintained (at that time) by the Department
    of Justice and the Department of State. The DMIA also set forth
    timelines for this integration and deployment effort.
        On January 5, 2004, the deployment of the newly integrated systems
    containing alien entry and departure data was successfully launched to
    all of our Nation's international airports of entry, as well as to 14
    of the Nation's largest sea ports at which international travelers
    arrive. Although, not required by statute, the Secretary sought to
    improve on the mandate and requested that all non-immigrants with non-
    immigrant visas entering at these locations should also have their
    fingerprints scanned so that checks of additional databases containing
    information on aliens could also be made. We are also piloting the
    capture of biometric data at the point of departure. The collection of
    data from the pilot sites is expected to continue until early in fiscal
    year 2005, with plans to initiate exit installation in fiscal year 2005
    based upon the solutions identified.
        Building upon these successes, US VISIT functionality will be
    deployed to the top 50 land border ports of entry in accordance with
    the timelines set forth in DMIA. US VISIT will work with the to-be-
    awarded prime contractor to develop the processes, infrastructure and
    technology required to capture similar data upon entry and exit at the
    land borders in a way that will minimize any deleterious effect on the
    flow of goods and peoples across our borders.

                        TERRORIST WATCHLIST INTEGRATION

        Question. One of the most important items on the Department's list
    of unfinished business is the integration of terrorist watchlists.
    Earlier this year, Secretary Ridge said the list would be fully
    functional ``by mid-May.'' Because many of the agencies you oversee--
    such as the Transportation Security Administration, Customs and Border
    Protection, and Immigration and Customs Enforcement--rely daily on
    accurate information about the potential threats to this country posed
    by individuals on these lists, I would imagine that the integration of
    this information would be a priority.
        What is the status of the watch list integration and what are you
    doing to ensure that rapid progress is being made on this important
    national security project?
        Answer. Integration of terrorist watchlists is proceeding. The
    Terrorist Screening Center (TSC) has been established with its own
    consolidated database comprising information from the Terrorist Threat
    Integration Center (TTIC). TTIC is collecting information from all the
    agencies holding watchlists to verify the information and add names and
    data to TSC's list.

                            INTEROPERABILITY GRANTS

        Question. According to ``A Needs Assessment of the U.S. Fire
    Service'', a report conducted by FEMA in conjunction with the National
    Fire Protection Administration, only one-fourth of all fire departments
    can communicate with all of their rescue partners. The Council on
    Foreign Relations' June, 2003 study on Homeland Security Needs
    estimated that the need for interoperable communications equipment
    funding was $6.8 billion over the next 5 years. The February 2003
    National Task Force on Interoperability report entitled ``Why Can't We
    Talk'' found that ``in many jurisdictions radio communications
    infrastructure and equipment can be 20-40 years old. Different
    jurisdictions use different equipment and different radio frequencies
    that cannot communicate with each other. There are limited uniform
    standards for technology and equipment.''
        Last year, the Administration proposed and Congress agreed to drop
    homeland security funding specifically for interoperability grants.
    Once again, the President has proposed no specific funding for
    interoperable grants and the $85 million Department of Justice program
    for law enforcement interoperable grants is proposed for elimination.
    The Secretary recently announced a very modest interim solution to the
    interoperable problem. Yet, the Administration assumes that State and
    local governments will use their first responder grants for this
    purpose and requests no specific funding for the estimated $50 million
    cost for the interim solution.
        The President is proposing to reduce first responder grants by over
    $700 million and government-wide by $1.5 billion. With these cuts, why
    do you believe States will be able address both the interoperable
    communication problem as well as the funding shortfall in first
    responder requirements?
        Answer. The President's fiscal year 2005 budget request provides
    significant support for the mission and programs administered by the
    Office for Domestic Preparedness. As you know, The Homeland Security
    Act of 2002 (Public Law 107-296) designated ODP as the principal
    Federal agency responsible for the preparedness of the United States
    for acts of terrorism, including coordinating preparedness efforts at
    the Federal level, and working with all State, local, tribal, parish,
    and private sector emergency response providers on all matters
    pertaining to combating terrorism, including training, exercises, and
    equipment support.
        The President's request includes $3.561 million, which is a $3.3
    million increase from the fiscal year 2004 request. With these
    resources, ODP will be able to maintain its role in enhancing the
    security of our Nation. The two primary means through which ODP
    provides funds to States and the Nation's emergency prevention and
    response community are the Homeland Security Grant Program (HSGP) and
    the Urban Areas Security Initiative (UASI). The President's fiscal year
    2005 budget request includes $750 million for HSGP and more than $1.4
    billion for UASI. With these funds, states, urban areas, and other
    units of local government can undertake a wide range of domestic
    preparedness activities, including the purchase of specialized
    equipment. Interoperable communications equipment is an allowable
    expense and falls within the HSGP and USAI funding requirements. In
    fact, to facilitate communications interoperability, ODP strongly
    encourages all new or upgraded radio systems and new radio equipment
    purchased with these funds be compatible with a suite of standards
    called ANSI/TIA/EIAA-102 Phase 1 (Project 25). These standards have
    been developed to allow for backward compatibility with existing
    digital and analog systems and provide for interoperability in future
    systems.
        Overall, though, I think it is important to remember that we are
    operating in a fiscal and security environment where we must ensure
    maximum security benefits are derived from every security dollar. To do
    that, we must be able to take a new look at the way in which we
    allocate resources. Additionally, given the Department's improved
    ability to analyze risks, threats, and vulnerabilities, the Department
    is better able to provided targeted funds to increase the security of
    the Nation. The Department will continue to work with the States and
    territories to provide the resources they need--equipment acquisition
    funds, training and exercise support, and technical assistance--to
    deter, prevent, respond to, and recover from acts of terrorism.

                         GRANT CONSOLIDATION WITHIN ODP

        Question. On January 26, your Department exercised authority
    granted to you under Sec. 872 of the Homeland Security Act which
    permits the movement and consolidation of functions without
    congressional approval. Your proposal would consolidate the
    administration of 24 grant programs into a single office. During
    briefings for my staff, your aides justified this move as a way to
    address a strong interest by the States in a ``one-stop shopping''
    center for all grants. I have serious concerns about the decision to
    transfer ALL Transportation Security Administration grant programs from
    TSA to the Office of Domestic Preparedness.
        Many of us in Congress have been concerned that while we passed
    legislation creating the Transportation Security Administration--this
    Administration has treated it as the Aviation Security Administration.
    TSA was created to focus on securing ALL modes of transportation--
    buses, and trucking, and seaports--not just aviation. Aviation security
    is a primary concern, of course, but it cannot be the only concern. We
    on this Committee have had to cajole and wheedle and scrape together
    what few precious resources we could find to fund grant programs to
    address port security, and bus security, and trucking security and the
    safe flow of commerce traveling by sea. Now, you are shifting those
    programs to another agency with little expertise in transportation
    issues and proposing to eliminate funding for several of the programs.
    If these TSA grant funds are moved out of TSA's budget and away from
    its operational control, the President might just as well abolish the
    agency. Change the agency's name to the Only Aviation Security
    Administration.
        Why do you want to move these TSA grant funds to the ``one-stop
    shop''? Are you not concerned that TSA will lose its ``all
    transportation'' focus if its grant funds are removed from its budget?
        Answer. The move to create a one stop shop for grants is based upon
    input from the user or grantee community and is designed to enhance
    coordination of the multitude of preparedness and security grants
    currently administered by the Department (ODP, FEMA and TSA). The one-
    stop shop consolidation will allow DHS to gain a global perspective on
    all of the grants to ensure that redundancies are minimized, funds are
    directed to the highest best use and DHS can proactively make
    recommendations to States, localities and other recipients on mutual
    aid and dual use opportunities.
        Moving the TSA grants to SLGCP will provide DHS with concrete
    benefits. First, it will allow the substantial bulk of the TSA
    personnel who are not impacted by the consolidation to focus on their
    core mission of transportation security. Next, it creates internal (to
    DHS) and external (to recipients) improved efficiencies because only
    one DHS team (SLGCP) will interact with grant recipients rather than
    two separate teams (one at SLGCP and one at TSA) and, more importantly,
    recipients who apply for more than one type of grant (e.g. a UASI and a
    TSA grant) will only need to deal with one DHS team (SLGCP).
        Final policy responsibility for grant guidance and grant
    distribution will reside with the Office of State and Local Government
    Coordination & Preparedness. However, overall hazards and
    transportation security policy input will remain with FEMA, TSA, as
    well as the Coast Guard, and MARAD. And, to ensure the continuing
    involvement of TSA in the grant process, ODP will create a distinct
    office dedicated specifically to transportation related grants. This
    office will work closely with TSA in developing transportation security
    grant policy.

                              STATE FORMULA GRANTS

        Question. Mr. Secretary, State formula grants have been the largest
    source of homeland security money for State and local governments. In
    fiscal year 2003, Congress provided $2.1 billion for State formula
    grants, and in fiscal year 2004 provided nearly $2.2 billion for this
    purpose.
        Your 2005 budget request drastically changes the scope of State
    formula grants. You request only $1.2 billion for the program, choosing
    instead to invest $1.4 billion into the urban areas security
    initiative, which targets specific cities. Your request also changes
    the way in which State formula grants are distributed. Your budget does
    not distribute funds according to the PATRIOT ACT requirement that all
    States get a portion of funds, but rather according to ``terrorism risk
    factors.'' I am sympathetic to your proposal to shift money from the
    State grant program to grants to high threat urban areas. Most of the
    funds should be targeted to the areas where the risk is highest.
    However, for the funds that remain in the State grant program, I
    believe the PATRIOT ACT formula should be retained. Will you keep the
    small State minimum for State grants as required by the PATRIOT ACT?
        This proposal effectively turns the State homeland security grants
    into an extension of the Urban Areas Security Initiative. I agree that
    it is important to target resources to areas at greatest risk, but it
    is equally important that we ensure that every State has they resources
    needed to build up a basic homeland security infrastructure. This
    budget does not achieve both goals.
        Answer. I strongly support the idea that homeland security is a
    national responsibility shared by all States, regardless of size. That
    is why I firmly believe that there should be a minimum level of
    preparedness across the county and that every State should receive some
    level of assistance from the Department of Homeland Security.
        Further, I strongly support the President's fiscal year 2005 budget
    request that provides for additional factors to be considered when
    making determinations on how to distribute homeland security funds to
    States and localities. While I support the concept behind the PATRIOT
    Act--that every State should receive minimum levels of support--I
    firmly believe that funding allocations decisions should be based on a
    number of other factors not included in the PATRIOT Act formula,
    including the presence of critical infrastructure and other significant
    risk factors. With the input that the Department is receiving from the
    States through their updated homeland security strategies, and with the
    more robust intelligence analysis and data collection capabilities
    within the Department, the Department will be better able to prioritize
    support for your efforts to prevent, prepare for, and respond to
    terrorist incidents. The President's fiscal year 2005 request
    recognizes this enhanced ability, and provides the Secretary of
    Homeland Security the latitude and discretion to determine appropriate
    funding levels to the States.

                               GRANT APPLICATIONS

        Question. Please provide the Subcommittee with a list of the number
    of applications (and the total amount requested) for port security, bus
    security, truck security, Operation Safe Commerce, hazmat security and
    fire grants per grant-making round and the amounts awarded on State by
    State basis.
        Answer. The following table provides the number of applications
    received and the total amount requested for port security, bus
    security, truck security and Operation Safe Commerce per grant round:

    ------------------------------------------------------------------------
                                                 Number of
                                               Applications/   Total Amount
                  Grant Program                  Proposals       Requested
                                                 Received
    ------------------------------------------------------------------------
    Port Security Round 1...................             856    $696,957,362
    Port Security Round 2...................           1,112     995,905,305
    Port Security Round 3...................           1,042     987,282,230
    Intercity Bus Security..................              84      45,611,455
    Truck Security..........................              16      70,984,782
    Operation Safe Commerce.................              33      97,966,809
    ------------------------------------------------------------------------

        The following table provides the dollar amount of grants awarded by
    State:

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              ODP Port                      Truck Security--
                  State Name                Port Security   Port Security   Port Security     Security      Intercity Bus    Highway Watch    Operation Safe
                                            Round 1 Total   Round 2 Total   Round 3 Total   Grants Total   Security Total        Total        Commerce Total
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    ALABAMA..............................              $0        $948,000      $1,098,571              $0              $0                $0               $0
    ALASKA...............................       1,344,929       4,086,255         758,569         250,000               0                 0                0
    AMERICAN SAMOA.......................               0               0               0               0               0                 0                0
    ARIZONA..............................               0               0               0               0          99,950                 0                0
    ARKANSAS.............................               0               0               0               0               0                 0                0
    CALIFORNIA...........................      17,152,573      28,017,757      33,704,614       9,076,700         177,116                 0       13,697,053
    COLORADO.............................               0               0               0               0               0                 0                0
    CONNECTICUT..........................         296,636       2,201,337       3,825,565               0               0                 0                0
    DELAWARE/PENNSYLVANIA................       1,925,000       5,512,369       1,830,700       3,730,555         342,765                 0                0
    DISTRICT OF COLUMBIA.................               0          27,356               0               0         773,614                 0                0
    FED. STATES OF MICRONESIA............               0               0               0               0               0                 0                0
    FLORIDA..............................      19,572,606      17,654,425       7,625,747      10,947,378         141,580                 0                0
    GEORGIA..............................       2,305,400       2,629,643       4,237,611               0         265,003                 0                0
    GUAM.................................               0               0         518,900               0               0                 0                0
    HAWAII...............................         802,523       7,005,561       4,247,966               0               0                 0                0
    IDAHO................................               0               0               0               0               0                 0                0
    ILLINOIS.............................               0         872,250       7,025,300               0          51,278                 0                0
    INDIANA..............................               0          68,800         353,760               0         113,813                 0                0
    IOWA.................................               0               0          51,600               0         226,272                 0                0
    KANSAS...............................               0               0         221,540               0               0                 0                0
    KENTUCKY.............................               0          55,136       1,439,578               0               0                 0                0
    LOUISIANA............................       4,968,207      19,991,897      23,552,896       6,650,200               0                 0                0
    MAINE................................         175,000       2,054,000         621,200               0               0                 0                0
    MARSHALL ISLANDS.....................               0               0               0               0               0                 0                0
    MARYLAND.............................       3,764,000       4,518,532       5,586,150               0         338,482                 0                0
    MASSACHUSETTS........................       3,789,669       4,333,651       3,005,829               0       1,173,875                 0                0
    MICHIGAN.............................         135,000         409,000         897,263               0               0                 0                0
    MINNESOTA............................               0               0         813,100               0         335,102                 0                0
    MISSISSIPPI..........................         555,132         705,444       2,245,740               0               0                 0                0
    MISSOURI.............................               0         125,000          50,000               0               0                 0                0
    MONTANA..............................               0               0               0               0               0                 0                0
    NEBRASKA.............................               0               0               0               0               0                 0                0
    NEVADA...............................               0               0               0               0         320,791                 0                0
    NEW HAMPSHIRE........................         200,000          80,000       1,570,203               0          73,182                 0                0
    NEW JERSEY...........................               0       5,493,067       5,129,950       7,613,106       2,454,220                 0                0
    NEW MEXICO...........................               0               0               0               0               0                 0                0
    NEW YORK.............................       8,013,360       9,847,792       6,699,713       4,477,768         172,130                 0       13,818,770
    NORTH CAROLINA.......................         250,000       4,870,000       3,224,114               0         566,591                 0                0
    NORTH DAKOTA.........................               0               0               0               0               0                 0                0
    NORTHERN MARIANA ISLANDS.............               0               0       1,379,577               0               0                 0                0
    OHIO.................................         550,622         777,000       3,100,127               0          44,408                 0                0
    OKLAHOMA.............................               0         725,000               0               0               0                 0                0
    OREGON...............................         623,000       1,185,000       1,024,970               0           9,900                 0                0
    PALAU................................               0               0               0               0               0                 0                0
    PUERTO RICO..........................       3,000,000         637,000       3,585,870          23,490               0                 0                0
    RHODE ISLAND.........................         261,500         435,000       1,498,563               0               0                 0                0
    SOUTH CAROLINA.......................       1,819,072       1,845,389       5,225,019       5,124,554          35,263                 0                0
    SOUTH DAKOTA.........................               0               0               0               0               0                 0                0
    TENNESSEE............................         198,052         639,655         768,285               0         123,375                 0                0
    TEXAS................................       8,345,366      18,814,061      31,960,813      12,158,057      10,755,138                 0                0
    UTAH.................................               0               0               0               0               0                 0                0
    VERMONT..............................               0               0               0               0         217,542                 0                0
    VIRGIN ISLANDS.......................               0       1,873,245         869,275       1,582,468               0                 0                0
    VIRGINIA.............................       6,044,618       5,068,358       1,681,280       6,600,000         841,330        19,300,000                0
    WASHINGTON...........................       5,179,974      14,895,156       7,030,942       6,765,724          26,407                 0       27,528,219
    WEST VIRGINIA........................         750,000         522,000         565,000               0               0                 0                0
    WISCONSIN............................               0               0               0               0         120,873                 0                0
    WYOMING..............................               0               0               0               0               0                 0                0
                                          ------------------------------------------------------------------------------------------------------------------
          GRAND TOTALS...................      92,022,239     168,924,136     179,025,900      75,000,000      19,800,000        19,300,000       55,044,042
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                            AIR CARGO: PILOT PROGRAM

        Question. I understand that the bulk of air cargo carried on
    narrow-body aircraft is broken down--as opposed to being containerized
    in larger containers. What percentage of U.S. flights carrying air
    cargo are made on narrow-body aircraft? Has TSA started physically
    screening these broken-down forms of air cargo using explosive
    detection devices--even if only in a pilot program as strongly urged by
    the Congress in the fiscal year 2004 Homeland Security Act? If not, why
    not? When do you intend to initiate such a program--given that the bill
    was signed into law on October 1, 2003--over 5 months ago?
        Answer. TSA does not compile statistics regarding the percentage of
    U.S. flights carrying air cargo utilizing narrow-body aircraft. Last
    November, TSA instituted mandatory cargo screening requirements for air
    carriers. The screening requirements apply to cargo transported on both
    wide body and narrow body aircraft--including ``break bulk'' shipments
    transported on narrow body aircraft. TSA is finalizing a protocol,
    which will allow the air carriers to utilize Explosive Trace Detection
    equipment to screen cargo. TSA is also currently conducting a pilot
    program of Explosive Detection Systems ability to screen cargo for
    explosives. As TSA's cargo screening requirements continue to evolve
    TSA will continue to test and analyze the feasibility of using
    additional explosive detection capabilities for cargo.

                            FLETC BUDGET: CHARLESTON

        Question. For many years, the FLETC has used facilities at the
    former Navy base in Charleston, SC as a satellite training location for
    training law enforcement personnel from the Border Patrol and other
    agencies because it was unable to accommodate them at its two main
    training facilities. Last year, prior to the creation of the Department
    of Homeland Security and the consolidation and reorganization of
    numerous agencies, Congress appropriated and the President signed into
    law approximately $14 million for the Border Patrol Academy at
    Charleston. I understand that FLETC proposes to move all Border Patrol
    training to its main facility at Glynco, GA and use the Charleston
    location for training for other agencies. However, that move is not
    likely to occur for nearly 2 more years. There is considerable
    confusion over the use of the funds provided by Congress for
    construction activities at Charleston. It is clear that the Congress
    intended for these funds to be used in Charleston. Will you commit that
    these funds will be spent in Charleston as directed by Congress and
    provide the Subcommittee with a plan for allocating those funds?
        Answer. The FLETC will use the funds in the amount of
    $13,896,000.00 for projects in Charleston. The Core of Engineers spent
    approximately $104,000 for design prior to the administrative transfer
    of Charleston to the FLETC. A summary of the projects are:
      --Construction of Tactical Training Mat Rooms for defensive tactics
            training for the USCG Marine Law Enforcement Academy;
      --Renovation of new wing in Building 654 for administrative space for
            the USCG Marine Law Enforcement Academy;
      --Renovation of four classrooms in building 61 for classroom space
            for the USCG Marine Law Enforcement Academy;
      --Renovation of old wing in Building 654 for administrative,
            conferencing and training space for the FLETC and Partner
            Organizations' training management and operations staffs;
      --Construction of Indoor Firing Range to provide training and re-
            qualifying students in firearms proficiency; and
      --Construction of Security/Communications system that will allow the
            FLETC Charleston to provide efficient and cost effective
            training while utilizing the latest state of the art
            technologies.

                    FLETC BUDGET: FACILITIES OPERATING FUNDS

        Question. I am a strong supporter of consolidated Federal law
    enforcement training--in part because of the budgetary savings which
    can be achieved. During site visits by my staff to the FLETC facilities
    in SC and GA, they were told that the Border Patrol's training budget
    for activities at Charleston was $34 million in fiscal year 2004 and is
    proposed to be $42 million in fiscal year 2005. Is that correct? If so,
    where will these funds come from? Are the agencies going to transfer
    funds to FLETC or will FLETC bill them for training? Without clear
    indications of funding streams to pay for the operation of the facility
    in Charleston being placed in the FLETC budget--or in the budgets of
    the agencies attendant at these facilities--how can you ensure that
    consolidated training will work efficiently and that these facilities
    will operate robustly and effectively?
        Answer. The Border Patrol has been providing the funding to operate
    the Charleston facility since the late nineties. The amounts provided
    by the Border Patrol included resources for TDY of agents that are not
    applicable to the operations of Charleston by the FLETC. The final
    amount has not been determined but the current estimate is
    approximately $21 million to operate Charleston. In addition, 25 FTE
    will be necessary to operate the facility and the source of those FTEs
    are being determined. A transfer of funds from the Border Patrol to the
    FLETC will be necessary to align responsibilities with Federal
    appropriations. The FLETC is currently evaluating the resources
    required for the additional basic training programs to be conducted in
    Charleston for three new Partner Organizations. These new agencies are
    United States Coast Guard Marine Law Enforcement Academy, The
    Administrative Office of the U.S. Courts and the Defense Logistics
    Agency. The FLETC will not be able to operate the Charleston training
    site without these resources.

                      FLETC: CAPITOL POLICE TRAINING COSTS

        Question. What are the costs FLETC has borne for non-basic training
    conducted at the Cheltenham facility for the United States Capitol
    Police for fiscal years 2002-2004 and what are the anticipated costs
    for the same training for fiscal year 2005? What are the annual basic
    training costs?
        Answer. The Capitol Police have historically provided some follow-
    on basic training for their officers at locations in the Washington DC
    area. This training was not done at a FLETC location, was never paid
    for by the FLETC, and therefore is not in the FLETC's base funding.
    This is consistent with other Partner Organizations such as the United
    States Secret Service which provides its follow-on basic training at
    their Beltsville location. Now that the Capitol Police is conducting
    agency specific basic training at a FLETC location, namely Cheltenham,
    for consistency purposes, this funding could be included as part of
    FLETC's annual workload projections. The precise amount of funding
    would need to be negotiated with the U.S. Capitol Police.

                         U.S. CAPITOL POLICE OPERATIONAL EXPENSES AT FLETC'S CHELTENHAM FACILITY
    ----------------------------------------------------------------------------------------------------------------
                                                                        Building 3      Building 31    Buildings 31,
                                 Service                                Fiscal year     Fiscal year   231, 40 Fiscal
                                                                           2003            2003          year 2004
    ----------------------------------------------------------------------------------------------------------------
    Electricity.....................................................          $5,554         $49,365         $52,364
    Fuel Oil........................................................           5,361          21,259          25,516
    Security........................................................           1,908          16,960          17,990
    Telephone Service...............................................          10,106  ..............  ..............
    Telephone Service...............................................  ..............          11,731  ..............
    Telephone Service...............................................  ..............  ..............          10,169
    Telephone Lease.................................................  ..............          84,844          84,844
    Refuse Disposal.................................................             600             900             900
    Water/Sewer.....................................................           1,636          14,537          15,420
    General Janitorial..............................................           7,326          65,113          69,069
    Additional Trash Pulls (Daily)..................................  ..............           5,172           5,172
                                                                     -----------------------------------------------
          Total.....................................................          32,491         269,880    \1\ 281,445
    ----------------------------------------------------------------------------------------------------------------
    \1\ Estimate.

                              FLETC: OTHER ISSUES

        Question. Approximately 60 percent of the FLETC workforce is
    comprised of contract employees. From perimeter security guards and
    role players used in training scenarios to food service workers and the
    maid service, these employees word hard and perform much needed
    services. Given the exceedingly high percentage of contract employees,
    does the Department expect FLETC to conduct further efforts to contract
    out yet even more work?
        Answer. The FLETC has developed a plan for competitive sourcing to
    be in compliance with the A-76 circular. At this time, the positions
    planned for study include 13 Automotive Mechanics in fiscal year 2005;
    21 Media Support positions and 30 Facilities Management positions in
    fiscal year 2006; 4 Critical Incident Stress Management positions and 9
    Property Management positions in fiscal year 2007; and 20 Human
    Resources positions and 36 IT/Training Devices/AV positions in fiscal
    year 2008.
        Question. The horrific events of 9/11 resulted in a massive
    increase in hiring of Federal law enforcement personnel. These new
    hires required training and Congress provided temporary authority to
    re-hire retired Federal annuitants to assist in training activities. I
    am told that these annuitants are providing FLETC and the Department
    excellent and valuable service based on their years of skill and real
    life experience. However, this authority will soon expire and I
    understand that a significant portion of FLETC's training would be
    negatively affected if it lost this authority. Do you plan to request
    that Congress extend this authority either permanently or for another 5
    years?
        Answer. The FLETC intends to recommend to the Administration an
    extension to its rehired annuitant hiring authorization and waiver to
    dual compensation. Historically, it has been very challenging for FLETC
    to recruit highly qualified law enforcement instructors with a Federal
    criminal investigative, GS-1811, background because the FLETC has no
    authority to pay law enforcement availability (LEAP) compensation. Any
    current Federal criminal investigator interested in an instructor
    position at the FLETC must be willing to take a 25 percent cut in his/
    her annual salary when accepting a FLETC position. In addition,
    retaining their law enforcement ``6c'' retirement status sometimes
    becomes an issue, and they also lose their privileges to use government
    vehicles for response necessities.
        Prior to the tragic events of 9/11, the FLETC had been working
    vigorously with its former department, Department of the Treasury, and
    Office of Personnel Management officials to gain approval to implement
    the rehired annuitant hiring flexibilities contained within the Federal
    personnel management system. As mentioned above, the FLETC had been
    seeking this approval in order to overcome the recruitment and
    retention challenges associated with staffing Law Enforcement
    Specialist (Instructor), GS-1801, positions with applicants possessing
    extensive Federal criminal investigative backgrounds. Furthermore, the
    FLETC intended to maximize the provisions of the program by recruiting
    recent 1811 retirees who could share the latest law enforcement
    techniques and practices being utilized in the field.
        The need for the majority of FLETC instructors to possess a
    criminal investigative background has been and continues to be
    validated through management studies and student feedback surveys.
    Instructors having this background gain instant credibility with their
    students because they are able to share real world experiences and
    demonstrate the application of skills and information being taught. In
    addition, the FLETC's mission has continued to expand post 9/11 into
    areas such as counterterrorism, antiterrorism and transportation
    security training which require attracting even more specialized
    expertise in a highly competitive market. Therefore, it is essential
    that the FLETC continue to take advantage of this proven hiring
    flexibility in its efforts to maintain a highly qualified law
    enforcement training instructor workforce. Reverting back to
    traditional instructor recruiting and staffing practices would
    adversely impact and unduly hamper this effort.

                    TSA: SLOW MOVEMENT OF APPROPRIATED FUNDS

        Question. In the fiscal year 2004 Homeland Security Appropriations
    Act, Congress provided $7 million for hazardous materials security and
    the truck tracking program, $10 million for intercity bus security
    grants, and $22 million for the trucking industry security program.
    That bill was signed into law in October. Nearly 6 months later those
    funds have not yet been released. Since security for these other modes
    of transportation are so important, why has TSA been sitting on these
    funds?
        Answer. In the coming months, TSA plans to request proposals for
    funding or announce awards for a number of programs. These include:
      --TSA anticipates issuing a Request for Applications (RFA) for both
            the fourth round of Port Security Grants Program ($50 million
            remaining from fiscal year 2004) and Intercity Bus Security
            grants by late spring, 2004, with final awarding of grants
            expected in late summer.
      --A fourth quarter fiscal year 2004 release of the RFA is anticipated
            for both the Highway Watch Program and Operation Safe Commerce,
            with final award anticipated in the fall.
      --TSA intends to announce Request for Proposals for the Truck
            Tracking Project in early summer. Final award is anticipated in
            early fall, 2004.
      --Award for Nuclear Detection and Monitoring is anticipated by mid-
            summer, 2004.

                                 PORT SECURITY

        Question.The deputy assistant director of the FBI's
    counterterrorism office stated in January that our Nation's seaports
    remain vulnerable targets for attack. ``The intelligence we have
    certainly points to ports as a key vulnerability. I can't be more
    specific about the threats of attacks. We have received information
    that indicates there is an interest.''
        If there is an ``interest'' in attacking our ports, why does the
    Administration continue to refuse to give our seaports the resources
    they require to secure our ports? Why is only $46 million requested for
    port security grants when the port directors tell us that $1.125
    billion will be needed in the first year and $5.4 billion will be
    needed over the next 10 years to comply with the new Federal
    regulations mandated by the Maritime Transportation Security Act.
        Additionally, during the most recent port security grant
    competition (December 2003), over half of the funding for port security
    grants was awarded to private companies. A tremendous need for port
    security funding also exists for port authorities and State and local
    agencies. What approach are you taking to allocate the funding between
    these different entities? Additionally, what type of checks and
    balances do you have in place to ensure that private companies are not
    receiving a disproportionate share of this port security funding?
        Answer. In Port Security Grants Round 3, consistent with provisions
    of the Maritime Transportation Security Act of 2002, the Transportation
    Security Administration, U. S. Coast Guard and the Maritime
    Administration determined that regulated facilities should receive
    preference. The vast majority of regulated facilities are private
    companies. However, public entities were well represented with awards
    totaling 45.3 percent of the available funds.
        In general, port security grant funds are dispersed through a
    competitive grant process. The multi-level, interagency review ensures
    that these funds go to the highest national security needs.
      --Eligible grant applicants are limited to critical national seaports
            as stipulated in the fiscal year 2002 DOD Supplemental
            Appropriations (Public Law 107-117) and referred to in
            subsequent appropriations. This designation included:
        --Controlled ports--Ports which have access controls for vessels
                from certain countries due to national security issues
        --Strategic ports, as designated by a Maritime Administration port
                planning order
        --A nationally important economic port or terminal responsible for
                a large volume of cargo movement or movement of products
                that are vital to U.S. economic interests as required for
                national security
        --Ports, terminals, and U.S. passenger vessels responsible for
                movement of a high number of passengers
        --Ports or terminals responsible for the movement of hazardous
                cargo.
      --All grant applicants must have a completed security assessment and
            tie the vulnerabilities identified in the assessment to the
            mitigation strategies requested in the application.
      --Subject matter experts from the U.S. Coast Guard (USCG), the
            Maritime Administration (MARAD), and TSA conduct a multi-level
            review of all port security grant applications.
        --Field level review is conducted by the USCG Captain of the Port
                and MARAD Regional Director to validate applicant
                eligibility and prioritize all proposals within their zone,
                utilizing the CG Port Security Risk Assessment Tool
                (PSRAT).
        --National level review is conducted by representatives from the
                USCG, MARAD, and TSA based upon published evaluation
                criteria. All eligible proposals from the field level
                review are prioritized on a national level.
      --Executive level review board of agency representatives examines the
                recommended proposals from an overarching national
                perspective.
      --Senior level selection board (currently TSA Administrator or his
                representative, USCG Commandant or his representative,
                MARAD Administrator) provides the final approval of the
                proposed grantees/projects.

                         INTEGRATED FINGERPRINT SYSTEMS

        Question. Mr. Secretary, Senator Cochran and I met last year in the
    Capitol to discuss our concerns about the plans for obtaining only two
    fingerprints of visitors to the United States as a means to fulfill the
    biometric component portion of the entry-exit visa tracking system you
    have named US VISIT. I suggested that I was concerned that capturing
    only two fingerprints might make it more difficult to compare these two
    new prints with more extensive existing fingerprint databases such as
    the FBI's Integrated Automated Fingerprint Identification System
    (IAFIS). In fact your own Department's Inspector General report dated
    December 31, 2003 noted that the Department of Justice has worked for
    several years to integrate your Department's two-print system--known as
    the automated biometric identification system, or IDENT--with the FBI's
    IAFIS system.
        The IG states that, ``This integration is critical to identifying
    illegally entering aliens on lookout lists or with criminal histories,
    but progress has been slow.''
        What is the status of the integration of these systems? Can you
    give the Committee a progress report on the integration of these
    systems?
        Answer. Prior to the establishment of the Department on Homeland
    Security, DOJ, working with the FBI and INS, began work on a project to
    integrate the FBI's IAFIS (10 print, criminal history) and the INS'
    IDENT (2-print, immigration) systems.
        Since that time, an integrated IDENT/IAFIS workstation has been
    developed. DHS intends to accelerate deployment in 2004 and complete
    deployment by the end of calendar year 2005. To accelerate the
    implementation of IDENT/IAFIS capability within the Department, we
    intend to seek a reallocation of $4 million of the remaining funds
    provided in Public Law 107-117. The $4 million, when combined with
    fiscal year 2003 funds already provided ($3.5 million obligated for
    IDENT/IAFIS), will allow BTS VISIT to implement IDENT with 10 print
    capabilities in secondary processing areas at 115 airports, 14 seaports
    and 50 of the largest land border ports. In addition, this funding will
    support implementation of the IAFIS/IDENT 10 print capability at 70
    percent of the Border Patrol stations. The remaining land ports of
    entry, 30 percent of the Border Patrol stations and major ICE locations
    (to be identified) will receive this capability in 2005. The
    implementation of IDENT/IAFIS at Border Patrol stations will provide
    the capability to biometrically identify and/or perform status
    verifications on individuals suspected of illegally crossing the
    border. Implementation at ICE offices will support investigation of
    individuals apprehended for overstays and/or watch list hits.

                                  IMMIGRATION

        Question. The Enhanced Border Security and Visa Entry Reform Act
    requires all immigration databases to be made interoperable and,
    eventually, combined into the Chimera data system, which is to include
    all known immigration, law enforcement, and intelligence data on
    aliens. What progress has been made thus far on creating the Chimera
    data system?
        Answer. On the 28th of October 2002, the Immigration and
    Naturalization Service published an informational document regarding a
    comprehensive information technology planning and infrastructure
    modernization program called ``Atlas''. That document was entitled the
    ``Atlas Business Case'' and provided a concise high-level view that
    demonstrated the INS' confidence in Atlas' strategic, technical, and
    financial merits. The business case reflected investment principles,
    emulation of industry best practices, and compliance with the Clinger-
    Cohen Act of 1996, as well as with other related legislative and
    government guidance.
        Consistent with the urgencies of the Government's post-September 11
    security agenda, the Atlas Business Case was subsequently socialized
    and promoted within the Department of Justice and sent to the Hill for
    budgetary consideration. It was understood that the Atlas Program would
    be the fundamental IT infrastructure foundation on which INS business
    applications would operate. In its business case, the INS illustrated
    that the successful Atlas transformation strategy would hinge upon a
    robust IT infrastructure containing a secure, scalable backbone that
    would support all INS business processes. Atlas, it was shown, would
    also provide database interoperability at the infrastructure level and
    support data sharing at the applications level. From the beginning, the
    Atlas design strategy also supported emerging Department of Homeland
    Security (DHS) requirements. Unlike the previous environment, Atlas was
    proposed to reside within an integrated Enterprise Architecture (EA)
    that would harmonize the following:
      --System hardware, including mainframes and servers
      --Data services, including data and voice circuits
      --Data communication equipment, including servers, switches, local
            area networks (LAN), wide area networks (WAN), routers, and
            cabling
      --Computer security, information assurance activities and enterprise
            information. This, specifically, is the area that would later
            come to be identified as the focus area for the suggested
            Chimera project.
      --Workstations, including personal computers and laptops and
            enterprise-wide software (i.e., office automation, e-mail,
            operating system, etc.)
      --Operational support to maintain and operate the modernized IT
            infrastructure
        Perhaps in contemplation of partitioning and re-tasking of the INS
    and its resources, or perhaps in calculating the initial complexity and
    cost of implementing Atlas, a counter-suggestion was made in committee
    and transmitted back to the Department of Justice and the INS that
    certain specific information security and assurance attributes of Atlas
    could be separately expedited and put into action under a new
    initiative tentatively labeled ``Chimera''.
        However, other program initiatives under way at INS and the new
    Department of Homeland Security were also addressing the same security
    concerns. In particular, the ``US VISIT'' program had pursued the same
    set of concerns and an active, high-precision approach for addressing
    critical information security and assurance requirements.
        Because of the US VISIT Program's ongoing and comprehensive
    approach to information security and assurance requirements within the
    DHS sphere of immigration-related operations, Chimera has been
    suspended and is being revisited to determine its potential as a
    duplicative effort.
        Question. As part of the 1990 Immigration Act, Congress authorized
    general arrest authority for all immigration law enforcement officers.
    INS never developed regulations to implement this authority. Has DHS
    developed such regulations?
        Answer. Yes, ICE issued a memo implementing general arrest
    authority for the ICE Office of Investigations and Detention and
    Removal in November 2003.
        Question. Representatives of the Department of Homeland Security
    Council (union of legacy INS employees) reported at a press conference
    on March 3 that no more than 5 percent of Immigration and Customs
    enforcement personnel have received cross-training. When does DHS
    expect to complete cross-training of all existing personnel? What
    percentage of all needed cross-training is funded in the President's
    budget proposal?
        Answer. OI conducted a manual survey the last week of March 2004.
    At that time 830 Special Agents had completed the cross-training. This
    accounts for 19 percent of the OI workforce of 4,463 which is targeted
    for cross-training in this fiscal year. The Automated Class Management
    System is expected to be on-line by the end of April, 2004. At that
    time, training statistics will be more readily available.
        OI has established a target to complete the cross-training for all
    non-supervisory Special Agents GS-05 through GS-13 by the end of fiscal
    year 2004. This cross-training will be accomplished using a train-the-
    trainer format with initial training being conducted at the Federal Law
    Enforcement Training Center.
        Cross-training beyond this priority group and into fiscal year 2005
    will be funded out of base appropriations.
        Question. A pay disparity of a full grade exists between
    Immigration Special Agents (GS-12) and Customs Special Agents (GS-13).
    It appears that the new regulations proposed by the Administration
    would hide this disparity within a pay scale, rather than addressing it
    directly. Is this correct and, if so, what impact is this disparity
    having on morale within ICE
        Answer. On April 13, 2004, Mr. Garcia announced that new Criminal
    Investigator (CI) position descriptions had been classified and all ICE
    GS-1811 series employees would be assigned to them by May 2004. The new
    journey-level position, which is established at the GS-13 level, will
    be applied at that time to all qualifying criminal investigators. As a
    result, the approximately 1,200 former Immigration and Naturalization
    Service (INS) personnel affected by this pay gap will be eligible for
    immediate promotion to GS-1811-13 on May 2, 2004.

                                  OTHER ISSUES

        Question. Does the fiscal year 2005 budget assume the
    reauthorization of COBRA which is set to expire on March 31, 2005?
        Answer. Public Law 108-121 reauthorized COBRA through March 1,
    2005. The fiscal year 2005 budget assumes that COBRA will be
    reauthorized beyond the March 1st expiration date.
        Question. What is the net increase in discretionary funding
    (excluding supplemental appropriations) for the Department of Homeland
    Security Bureau of Customs and Border Protection Salaries & Expenses
    between fiscal year 2004 and fiscal year 2005? Looking at the fiscal
    year 2005 budget it appears that the increase is just over 4 percent
    barely enough to cover for inflation.
        Answer. There is a $210 million net increase in discretionary
    funding for CBP's Salaries and Expenses between fiscal year 2004 and
    fiscal year 2005. This net increase includes $185 million in program
    increases and $350 in increases for annualizations of prior year pay
    raises and other inflation related costs. These increases are offset by
    a $23.7 million decrease for a DHS-wide savings initiative, termination
    of one-time costs associated with fiscal year 2004 program increases
    and the fiscal year 2004 rescission.
        Question. What is the Department doing to correct the problem of
    the Department not paying legacy Customs Inspectors and new CBP
    officers for their required work on the 60 day of basic training at the
    Federal Law Enforcement Training Center (FLETC)?
        Answer. We do pay employees covered by the Fair Labor Standards Act
    (FLSA) overtime while engaged in training at FLETC for 6-day weeks. The
    Government Employee and Training Act (GETA) prohibits us from paying
    non- FLSA employees under FLSA provision. Our COPRA covered front-line
    personnel are not subject to FLSA. COPRA was specifically designed for
    Customs Officers and is the exclusive pay act for our Customs legacy
    personnel. Our agency position on this matter was recently sustained in
    an arbitration decision.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye

        Question. Recently, a week-long convention of Asian life insurance
    providers and sales representatives scheduled to convene in Honolulu
    this August was cancelled. The convention was expected to produce more
    than $17 million in visitor spending, $1.41 million in State taxes, and
    rent 6,500 hotel room nights. The cancellation was not due to lack of
    interest by prospective attendees, but instead was due to the problems
    caused by the extended visa issuance process. Your Department has been
    working with the State Department to enhance security and the integrity
    of the visa process. Your budget requests an increase of $10 million to
    support a new visa security unit. How will this unit help to ensure
    that visas are processed quickly to ensure that Hawaii will be able to
    host similar conventions in the future?
        Answer. BTS is working with the State Department to assure that the
    provisions of the law known as Section 428 are implemented. The ICE VSU
    will be deploying Visa Security Officers to selected foreign posts;
    will be working to enhance State Department Consular officer training;
    will be working to improve the Visa Security Advisory Opinion (SAO)
    process; and develop with the State Department the appropriate employee
    performance plan oversight of Consular Officers by DHS. All of these
    efforts will improve the integrity of the visa issuance process and
    assure that visa applicants receive the appropriate level of review.
        The Department of Homeland Security's (DHS) visa security
    operations are located exclusively in Saudi Arabia at this time. Since
    beginning our operations in Saudi Arabia, thousands of visas
    applications have been reviewed by DHS officers. From over 3,500
    applications, approximately 27 have been delayed for reasons of
    security. Most visa applications in Saudi Arabia are acted upon within
    48 hours. This is in compliance with congressional language as to 100
    percent review of visa applications in Saudi Arabia.
        It is anticipated, DHS will dedicate staff to the SAO process,
    which in turn will further aid to expedite requests and ensure timely
    security screening on behalf of our officers in the field.
        Question. The budget justifications for the US VISIT program
    discuss the deployment plan for the full program. In furtherance of
    complete implementation, a Request for Proposals was published last
    November with bids due this January. How many proposals were received?
    In light of the proposals you received, is the budget request
    sufficient for full implementation of the program, including the
    meeting of your statutory deadlines for deployment to the 165
    identified points of entry?
        Answer. We received three bids for the Prime integrator contract.
        With the resources in the fiscal year 2004 appropriation, and
    provided approval of the fiscal year 2005 President's request, US VISIT
    will have the resources necessary to the meet the statutory deadline
    (US VISIT functionality in secondary) for the 50 largest land border
    ports by December 31, 2004 and the 115 remaining land sites by December
    31, 2005.
        Question. The budget request includes an increase of $23 million
    for Immigration and Customs Enforcement. This increase is intended to
    more than double the number of investigators and facilitate the
    implementation of the President's proposal for a temporary worker
    program. According to your testimony, in furtherance of the President's
    proposal, you would establish a traditional worksite enforcement
    program to deter the hiring of unauthorized workers. What efforts are
    currently being undertaken to detect, deter, and punish employers who
    hire undocumented workers?
        Answer. Enforcement efforts targeting companies that break the law
    and hire illegal workers will need to increase in order to ensure the
    integrity of the temporary worker system. The President's Immigration
    proposal provides for an enhanced worksite enforcement program, and the
    $23 million requested for fiscal year 2005 will allow ICE to enhance
    its worksite enforcement efforts and provide credible deterrence to the
    hiring of unauthorized workers. ICE worksite enforcement investigations
    generally involve a review of company employment records to verify the
    immigration status of workers and to determine if the employer has
    committed any violations. ICE agents also conduct extensive outreach
    initiatives to educate employers about their legal responsibilities.
        Additionally, the Basic Pilot Program, an automated system
    administered by USCIS, enables employers to verify the immigration
    status of newly hired workers. It is currently available in six states,
    but is planned for availability to employers in all 50 states by the
    end of this year. This is a voluntary program and is provided at no
    cost to employers. Information on the Basic Pilot Program is available
    to the public on the USCIS website.
        Question. The Visa Waiver Program is a critical element of the
    Hawaii tourism industry as it allows citizens of 27 countries to enter
    for non-immigrant purposes without a visa. However, by October 26, all
    Visa Waiver countries must certify that the new passports they are
    issuing contain biometric identifiers. How many of the 27 countries are
    currently expected to meet this deadline? Would you support extending
    the biometric passport deadline in order to avoid major disruptions in
    travel to the United States from key tourism markets in Europe and
    Asia? What is the Directorate doing to work with the foreign
    governments in the visa waiver program to encourage compliance?
        Answer. Due to a variety of factors, the Departments of Homeland
    Security and State have requested a 2-year extension for the October
    26, 2004 deadline for machine readable, biometric passports. The
    problem is not lack of will or commitment, but challenging scientific
    and technical issues. Due to technical challenges that include the
    durability of chip technology and the feasibility of facial recognition
    technology in an operational environment, few, if any, of the 27
    countries participating in the Visa Waiver Program (VWP) will be able
    to meet the October 26, 2004 deadline. In fact, the standards have not
    yet been set. Therefore, a 2-year extension is being requested to make
    it possible for countries to comply with this mandate.
        The Department of Homeland Security has been working very closely
    with foreign governments to develop the optimum solution that enhances
    security for all without impeding legitimate travel and tourism. All
    citizens traveling under the Visa Waiver Program will be enrolled in US
    VISIT upon entry through an air or sea port after/on September 30,
    2004.
                                     ______

               Questions Submitted by Senator Ernest F. Hollings

                     SEAPORT SECURITY IMPLEMENTATION COSTS

        Question. Commissioner Bonner announced with much fanfare, that we
    would sign agreements with major foreign ports, under the ``Container
    Security Initiative'', so that we could inspect containers in foreign
    seaports. It is my understanding, that while this sounds quite smart,
    there are a lot of practical problems. For instance, foreign nations
    use their own security equipment for security to protect their own
    ports, and they have not been all that forthcoming in providing their
    security equipment for our use.
        Can you tell me, how many marine containers underwent physical
    inspection, in foreign ports as a result of the ``Container Security
    Initiative''? What does this represent as a portion of the total that
    was physically inspected?
        What is the budget for the implementation of non-intrusive
    inspection equipment at U.S. ports, and how does it compare with the
    budget for the ``Container Security Initiative''?
        Answer. All cargo moving through a CSI port is screened by CBP
    using our multilayered targeting and risk analysis systems. All high-
    risk cargo is inspected for weapons of mass destruction before being
    laden on a vessel bound for the United States in a CSI port. Physical
    inspection statistics for containers will be provided by the General
    Accounting Office in the forthcoming review of the CSI program.
        As of April 23, 2004, U.S. Customs and Border Protection has
    deployed approximately $73.9 million worth of large-scale, non-
    intrusive inspection systems and radiation portal monitors to U.S.
    seaports. The Container Security Initiative (CSI) was appropriated
    $61.7 million in the President's 04 budget, of which approximately $12
    million has been allocated for non-intrusive inspection equipment for
    the CSI overseas ports.
        Question. The budget for FTE's for full time positions was set at
    220 for the Transportation Security Administration's Maritime and Land
    Division, yet it is my understanding that to date, this Division is
    only operating with 160.
        You have a number of responsibilities, such as conducting criminal
    background investigations, that are languishing. What is taking so long
    in hiring the remaining 60 Full Time Employee positions that, I
    understand are budgeted for the Transportation Security
    Administration's Maritime and Land Division but not yet hired?
        Answer. The Office of Maritime and Land Security (MLS) within the
    Transportation Security Administration currently has 169 full-time
    employees on board. We do not anticipate at this time hiring additional
    FTE.
        With reference to criminal background check responsibility, since
    security threat assessments of certain individuals within the
    transportation system are a critical component of our mission, TSA
    created a Credentialing Program Office (CPO) to consolidate TSA
    background check activity across all modes of transportation. The CPO
    has established processes for conducting background checks,
    adjudicating results and for follow-on coordination with the law
    enforcement and intelligence communities. TSA is already required to
    conduct criminal history records checks on airport security screening
    personnel, individuals with unescorted access to secure areas of
    airports, and other security personnel--pursuant to Section 114(f)(12)
    of the Aviation and Transportation Security Act, Public Law No. 107-71,
    115 Stat. 587 and 49 USC  44936 (a)(1)(A). In addition to the
    extensive background checks that TSA currently undertakes in aviation
    security, TSA has been delegated responsibility for conducting security
    threat assessments on commercial drivers seeking hazardous material
    endorsements for transporting hazardous materials in commerce pursuant
    Section 1012 of the Uniting and Strengthening America by Providing
    Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
    PATRIOT) Act, Public Law 107-56, October 25, 2001, 115 Stat. 272.
    Implementing the Alien Flight Student Program will be consistent with
    work already underway by TSA through the CPO.

                                 ARMING PILOTS

        Questions. Last week, Denver news stations were reporting that
    commercial airline pilots that have been armed with semi-automatic
    pistols through the Federal Flight Deck Officer (FFDO) program were
    misplacing or losing weapons at an alarming rate. According to Channel
    9 News, the Transportation Security Administration (TSA) and Airline
    Pilots Security Alliance were the source of information indicating that
    in the last 60 days approximately 300 weapons had been misplaced by
    FFDOs.
        My understanding is that a Southwest Airline Pilot lost his weapon
    while it was being transported in the lockbox system that is designed
    to protect it while traveling, and that most of the guns reported as
    ``misplaced'' came under similar circumstances.
        Are the reports of misplaced and lost weapons by FFDOs accurate? Do
    you believe the current procedures for FFDO firearm transport are
    proper? How many FFDOs have actually lost or misplaced their weapons
    since the program began? What steps need to be taken to responsibly
    ensure that armed pilots do not lose or misplace their guns?
        Answer. TSA takes seriously its obligation to ensure that FFDO
    firearms and lockboxes do not fall into the hands of individuals not
    authorized to handle such items. The FFDO program office works closely
    with carriers to ensure that training is provided to crewmembers and
    baggage handlers to ensure proper handling and storage of lockboxes. In
    some instances, lockboxes have been identified as not placed in the
    precise location expected, but with the exception of the one reported
    incident, the lockbox has always been quickly retrieved without
    endangering the traveling public.
        There has only been one incident involving an FFDO firearm that was
    lost and not recovered. TSA takes this incident very seriously and is
    pursuing an investigation. It must be considered in light of the
    thousands of FFDO missions flown every week and the number of incidents
    where weapons are lost or stolen in law enforcement activities.

                                 COCKPIT DOORS

        Questions. For 2 years, I was repeatedly told that it was not
    possible to devise an affordable system that would properly allow a
    pilot to leave the flight deck without also potentially allowing a
    terrorist to have access to the cockpit. Now, United Airlines has come
    forward and announced a ``Secondary Barrier Project'' that they have
    committed to install fleet-wide.
        United Airlines has committed to install--fleet-wide--barriers that
    have already been certified to help prevent a potential terrorist
    access to the cockpit. They will be cheap (under $10,000) and quick to
    install (overnight). I believe they will provide a much greater degree
    of security, and apparently it was shown to the TSA with great
    enthusiasm.
        Are you aware of United's effort? Do you believe the installation
    of second doors or barriers improve the security on commercial
    airliners? Has TSA considered requiring all commercial airlines to
    install similar devices? Would their installation allow TSA to change
    other security directives and perhaps lower the cost of aviation
    security?
        Answer. TSA is aware of and applauds United's initiative in this
    effort. TSA will work closely with the air carriers to better
    understand the security effectiveness, structural feasibility, and
    costs associated with installing similar devices throughout the
    commercial aviation fleet. Once a thorough examination in these areas
    has been completed, TSA will assess the appropriateness of requiring
    installation of secondary cockpit doors relative to existing security
    measures and determine what, if any, alterations should be made to the
    overall aviation security program.

                                 RAIL SECURITY

        Question. Border and Transportation Security Directorate is charged
    with, ``securing our Nation's transportation systems.'' How much
    funding is planned in your Directorate's fiscal year 2005 budget for
    rail security?
        Answer. The responsibility of securing our Nation's rail and mass
    transit systems is a shared one. DHS, DOT, and other Federal agencies
    are working together to enhance rail and transit security in
    partnership with the public and private entities that own and operate
    the Nation's rail and transit systems. The DHS Urban Area Security
    Grant program has awarded or allocated over $115 million to improve
    security for mass transit and rail systems since May 2003.
    Additionally, the Administration has requested $24 million for TSA to
    advance security efforts in the maritime and surface transportation
    arenas, and has requested that $37 million of the Federal Transit
    Administrations Urban Security Bus grants be available for security
    related projects. In addition, DHS will conduct the following
    activities and initiatives to strengthen security in surface modes:
      --Implement a pilot program to test the new technologies and
            screening concepts to evaluate the feasibility of screening
            luggage and carry-on bags for explosives at rail stations and
            aboard trains;
      --Develop and implement a mass transit vulnerability self-assessment
            tool;
      --Continue the distribution of public security awareness material
            (i.e., tip cards, pamphlets, and posters) for motorcoach,
            school bus, passenger rail, and commuter rail employees;
      --Increase passenger, rail employee, and local law enforcement
            awareness through public awareness campaigns and security
            personnel training;
      --Ensure compliance with safety and security standards for commuter
            and rail lines and better help identify gaps in the security
            system in coordination with DOT, with additional technical
            assistance and training provided by TSA;
      --Continue to work with industry and State and local authorities to
            establish baseline security measures based on current industry
            best practices and with modal administrations within the DOT as
            well as governmental and industry stakeholders, to establish
            best practices, develop security plans, assess security
            vulnerabilities, and identify needed security enhancements; and
      --Study hazardous materials (HAZMAT) security threats and identify
            best practices for transport of HAZMAT.

                    FEDERAL LAW ENFORCEMENT TRAINING CENTER

        Question. The Federal Law Enforcement Training Center (FLETC)
    established a temporary overflow training facility for basic training
    of Border Patrol recruits in 1996 at the old Navy Base. Border Patrol
    training needs drastically increased due to legislation passed by
    Congress to significantly increase the number of agents deployed.
        The facility was due to close in 2004, however Congress included a
    provision in the fiscal year 2003 Commerce, Justice and State
    Appropriations Bill which officially designated Charleston as a
    permanent Federal training center absolving the end date of the
    Charleston site as a temporary facility. Congress also secured $14
    million in the fiscal year 2003 Commerce, Justice and State
    Appropriations Bill for the Charleston Border Patrol Academy to improve
    the infrastructure for the training center.
        Since the Federal Law Enforcement Training Center (FLETC) has taken
    administrative control of the site in Charleston, how much of the $14
    million has being transferred from Customs and Border Protection to
    FLETC for use in Charleston?
        Answer. A Reimbursable Agreement (RA) between the FLETC and
    Immigration and Custom Enforcement (ICE) has been prepared in the
    amount of $13,896,000. The FLETC has signed the agreement with a
    statement of work attached and forwarded to ICE for approval. The Core
    of Engineers spent approximately $104,000 for design prior to the
    administrative transfer of Charleston to the FLETC. A summary of the
    Charleston projects are:
      --Construction of Tactical Training Mat Rooms for defensive tactics
            training;
      --Renovation of new wing in Building 654 for administrative space for
            the USCG Marine Law Enforcement Academy;
      --Renovation of four classrooms in building 61 for classroom space
            for the USCG Marine Law Enforcement Academy;
      --Renovation of old wing in Building 654 for administrative,
            conferencing and training space for the FLETC and Partner
            Organizations' training management and operations staffs;
      --Construction of Indoor Firing Range to provide training and re-
            qualifying students in firearms proficiency; and
      --Construction of Security/Communications system that will allow
            FLETC Charleston to provide efficient and cost effective
            training while utilizing the latest state of the art
            technologies.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

                                      TSA

        Question. I am very concerned about numerous reports of
    mismanagement I have heard with TSA Human Resources and its
    contractors, currently Accenture. I am aware of one Burlington,
    Vermont, Screener Manager and as many as 80 Screener Managers at Dulles
    who were promoted to their positions on February 9, 2003, yet they have
    still not received the full back pay for their promotions.
        I have been waiting since November 6, 2003, for a written
    explanation as to why the Burlington, Vermont, employee has not
    received any back pay. Apparently, the Office of Chief Counsel is still
    reviewing the matter.
        The best explanation I have heard so far--just informal, nothing in
    writing--was that the airports were not authorized to make all of the
    promotions on February 9, 2003, but went ahead and made them anyway. At
    best, this sounds to me like a big communications problem between TSA,
    its HR contractor, and the airports. At worst, this sounds like the
    employees were misled. Unfortunately, it is the people who have been
    performing the work who are getting the raw end of the deal.
        Could you please update me on this situation and explain what is
    being done to remedy the back pay issue?
        Answer. A reply to your letter regarding the constituent in
    Burlington was sent to you in March 2004. A copy of the letter, dated
    March 19, 2004, was faxed to your office on April 21, 2004. To
    summarize what TSA stated in the letter, we could not backdate your
    constituent's promotion because TSA policy stipulates that promotions
    do not become effective until they receive final approval by the
    necessary TSA officials. This policy is based in part on a U.S.
    Comptroller General precedent.
        Taking care of our employees is a very high priority for TSA. It is
    very important to TSA that its employees receive the compensation for
    the jobs that they are performing and that those who were promoted to
    the Lead and Supervisory Screener positions were promoted
    appropriately. At Dulles, all appropriate promotions were made, and all
    one-time awards were paid. TSA believes that all of these issues at
    Dulles have now been fully resolved.
        The issues involving lead and supervisory positions at Dulles
    resulted when screeners were offered promotions inappropriately. At the
    time this situation occurred, TSA was transitioning from its initial
    human resources service contractor to the current contractors and was
    building a fully functioning human resources organization, including
    program management of the contractors. Dulles posted job announcements
    internally for the positions of Lead Screeners and Supervisory
    Screeners with a closing date of December 20, 2002. Unfortunately, at
    that time, the FSD organization at airports did not have delegated
    authority to conduct recruitment and assessment processes, which
    includes the authority to promote existing employees at the airport.
        TSA's Office of Human Resources did not become aware of the issue
    until May, 2003. TSA worked expeditiously to develop a solution whereby
    all individuals who were inappropriately promoted at Dulles were
    provided compensation with a one-time monetary award, consisting of the
    difference between their screener salary and the salary that they would
    have received for the period they were ``promoted.'' Additionally, TSA
    ``re-announced'' the supervisory screener positions, and screeners who
    were inappropriately promoted were afforded full and fair opportunity
    to compete for the positions. TSA provided affected screeners the one-
    time award regardless of whether they succeeded or not in being
    promoted under the valid procedure.

                                     HAITI

        Question. I am concerned by the Department's response to those who
    have fled Haiti in recent weeks. Haitians intercepted at sea have
    received entirely inadequate screening for asylum. For example, while
    all interdicted Cubans are individually interviewed regarding their
    fear of persecution, only those Haitians who loudly protest their
    return--the so-called ``shout test''--receive such an interview. I
    joined with Senators Kennedy and Durbin in writing to the President
    last week to protest and seek changes in this and other policies. (A)
    Will you provide individual interviews to all Haitians interdicted at
    sea? (B) Will you suspend deportations against Haitians currently in
    the United States until the political situation in Haiti improves?
        Answer. Haitians manifesting a fear of return are and will continue
    to be interviewed by a USCIS Asylum Pre-Screening Officer (APSO). In
    accordance with Department of State direction, DHS will continue to
    conduct non-criminal Haitian removals.

                              DATABASE INTEGRATION

        Question. The Washington Post yesterday editorialized about a
    report Inspector General Fine issued last week on the slow pace of the
    integration of IDENT and IAFIS, the fingerprint identification
    databases of the former INS and the FBI. The report examined the case
    of Victor Manual Batres, a Mexican national with a criminal history who
    was twice simply returned to Mexico by Border Patrol agents whose
    database did not identify him as a wanted man. Batres eventually
    entered the country illegally, and then raped two nuns in Oregon,
    killing one. The Inspector General reported that the integration that
    would give Border Patrol agents access to the FBI database was 2 years
    behind schedule, and was not expected to be completed until 2008. Last
    week's report is the third OIG report in the last 4 years to highlight
    various aspects of this problem. (A) Why has progress on this issue
    been so slow? (B) When can we expect that Border Patrol agents will
    have access to the immigration and criminal histories in one database?
    (C) When will DHS enter into an MOU with DOJ about how this integration
    will happen?
        Answer. The Department of Homeland Security is committed to
    accelerating implementation of IDENT/IAFIS 10 fingerprint capability
    for enforcement processing at ports of entry, Border Patrol locations,
    and Immigration and Customs Enforcement offices.
        While we begin planning our implementation plan, we plan on using
    $4 million of the remaining funds provided in Public Law 107-117
    (fiscal year 2002 counter-terrorism funding) for potential use for
    IDENT/IAFIS implementation. The $4 million, when combined with fiscal
    year 2003 funds already provided ($3.5 million obligated for IDENT/),
    will allow BTS to implement IDENT with 10 print capabilities in
    secondary processing areas at 115 airports, 14 seaports and 50 of the
    largest land border ports. In addition, this funding will support
    implementation of the IAFIS/IDENT 10 print capability at 70 percent of
    the Border Patrol stations. The remaining land ports of entry, 30
    percent of the Border Patrol stations and major ICE locations (to be
    determined) will receive this capability early in calendar year 2005.
    Funding for fielding these capabilities is estimated to be
    approximately $3 million, but a clearer estimate will be provided as
    the planning and implementations proceed. Completing the implementation
    of IDENT/IAFIS at Border Patrol stations will provide the capability to
    biometrically identify and/or perform status verifications on
    individuals suspected of illegally crossing the border. Implementation
    at ICE offices will support investigation of individuals apprehended
    for overstays and/or watch list hits.
        The Department of Homeland Security will work with the Department
    of Justice to accelerate our integration into the FBI's IAFIS (10
    print, criminal history) and the legacy INS IDENT (2-print,
    immigration) systems. An integrated workstation has already been
    developed. It has been deployed to a limited number of sites. DHS
    intends to complete deployment of this capability in 2005.
                                     ______

                   Question Submitted by Senator Patty Murray

        Question. Thank you Mr. Chairman.
        I'm pleased to join you, Senator Byrd, and the rest of our
    colleagues in welcoming Mr. Hutchinson today.
        He has been handed a tough task in a very difficult time. I know he
    is committed to keeping our country safe, and I thank him for his
    leadership.
        Mr. Hutchinson, the Federal Government--and specifically your
    Department--has done an admirable job of providing resources and
    training to help secure the threats to our Northern Border. As a result
    of increased activity on the border, more individuals are being
    apprehended for crimes at or near the border but handed over to local
    law enforcement.
        However, the prosecution, defense, court and detention costs are
    very high. And, our local governments have been left with the
    responsibility for providing law enforcement services to most areas at
    and near the international border.
        One example from Washington State is Whatcom County and the City of
    Blaine--the areas that rests on the Northern Border of Washington State
    on Interstate 5. This community is responsible for 112 miles of border,
    including 89-miles of a shared land border with Canada and a 23-mile
    coastal border.
        As you know, the Department of Homeland Security operates five land
    points-of-entry within the county. Additionally, there are three
    international airports and several marine ports of entry within Whatcom
    County's jurisdiction.
        Mr. Hutchinson, terrorists, armed drug and weapons smugglers, and
    wanted fugitives regularly traverse residential neighborhoods at or
    near the border, creating huge threats to public safety and demands on
    local law enforcement.
        In Whatcom County, more than 85 percent of all criminal
    apprehensions made by Federal law enforcement agents at or near our
    border are turned over to the county. In fact, last year Whatcom County
    spent approximately $3 million on Federal deferred cases, and this year
    they estimate their costs will rise to $4 million.
        In these difficult fiscal times for local communities these extra
    burdens are having serious impacts on their budgets. But unlike the
    communities of Buffalo and Detroit, my small, rural county is
    staggering under the increased pressure on its budget.
        Mr. Hutchinson, the Southwest Border Initiative provides financial
    support to communities along the southern border who are experiencing
    this very problem. However, Whatcom County, which is the least
    populated northern border county with a major crossing has seen no such
    relief.
        I can't stress to you enough the impact $4 million has on a
    community of this size.
        I believe a similar program should be established for Northern
    Border States, particularly those State that have high traffic volumes,
    such as Washington State.
        Mr. Hutchinson, are you aware of this inequity between southern and
    northern border communities, and how is your Department prepared to
    help?
        Answer. Senator Murray, thank you for bringing this important issue
    to my attention. As you know, some of the initiatives undertaken to
    improve homeland security have produced unintended consequences.
    Tighter border security should lead to more interdictions and arrests.
    But, while the National Strategy for Homeland Security specifies that
    costs and performance are to be a shared responsibility, we certainly
    are not advocating that local jurisdictions take on a disproportionate
    share of the burden in that regard. Therefore we welcome your reports
    that outline these potential inequities. I understand that the U.S.
    Attorney and our ICE officers have met with your county officials to
    find a more balanced approach to performing this important workload,
    including the prospects that the arrestee's initial appearance occur in
    the Bellingham Magistrate's Court. While those potential solutions may
    not lead to the full relief sought, they are a step in the right
    direction while the Federal budget addresses this increased workload.

                              SUBCOMMITTEE RECESS

        Senator Cochran. Our next hearing of the subcommittee on
    the budget request for the Department of Homeland Security will
    be held on Tuesday, March 23 in this same room. At that time
    the Commandant of the United States Coast Guard, Admiral Thomas
    Collins, and the Acting Administrator of the Transportation
    Security Administration, Mr. David Stone, will be here to
    discuss the budget request for the programs under their
    jurisdictions.
        Until then this subcommittee will stand in recess.
        [Whereupon, at 11:47 a.m., Tuesday, March 9, the
    subcommittee was recessed, to reconvene at 10 a.m., Tuesday,
    March 23.]

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            TUESDAY, MARCH 23, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Thad Cochran (chairman) presiding.
        Present: Senators Cochran, Stevens, Domenici, Byrd, Inouye,
    and Murray.
        Also present: Senator Reid.

                        DEPARTMENT OF HOMELAND SECURITY

    STATEMENTS OF:
            HON. ADMIRAL THOMAS H. COLLINS, COMMANDANT, UNITED STATES COAST
                GUARD
            ADMIRAL DAVID M. STONE, ACTING ADMINISTRATOR, TRANSPORTATION
                SECURITY ADMINISTRATION

                   OPENING STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. The committee hearing will please come to
    order.
        Today, we continue our review of the President's fiscal
    year 2005 budget request for the Department of Homeland
    Security, specifically, the programs and activities of the
    United States Coast Guard and the Transportation Security
    Administration. I am pleased to welcome to the hearing the
    Commandant of the United States Coast Guard, Admiral Thomas
    Collins, and the Acting Administrator of the Transportation
    Security Administration, Admiral David Stone.
        We appreciate you submitting copies of your statements in
    advance of the hearing. They will be made a part of the record,
    and we invite you to make any comments you think would be
    helpful to the Committee's understanding of the budget request.
        I am happy to yield to Senator Inouye and other Senators
    who may wish to make any opening statements.

                     STATEMENT OF SENATOR DANIEL K. INOUYE

        Senator Inouye. Thank you very much, Mr. Chairman.
        I look forward to the hearing today. I represent a state
    that relies more than any other state on the two agencies
    represented this morning. As an island state, we have a unique
    relationship with the Coast Guard. We enjoy the ocean year-
    round for recreation and commercial fishing, and rely on it for
    transportation of more than 90 percent of our goods. And in
    Hawaii, we have a great appreciation for the search and rescue,
    navigation, fisheries management, and the environmental
    protection mission of the Coast Guard.
        Aviation is also a lifeline for my state. Our tourism-based
    economy is dependent on reliable and safe transportation of
    passengers to and from our shores. So I am so committed to
    working with both of these agencies to ensure that there are
    resources necessary to improve upon their performance, and help
    keep our traveling public and our transportation system safe,
    so I welcome the testimony of these two gentlemen.
        Senator Cochran. Admiral Collins, you may proceed.

                     STATEMENT OF ADMIRAL THOMAS H. COLLINS

        Admiral Collins. Good morning, Mr. Chairman, Senator
    Inouye. It is a privilege to be with you. Thank you for the
    opportunity to discuss the fiscal year 2005 budget request and
    the impact on the essential services we provide to the American
    public.
        The 2005 budget proposes a budget authority of $7.46
    billion, a 9 percent increase over fiscal year 2004. I am
    pleased to note that from fiscal years 2003 to 2005, our
    operating expense budget has grown over 51 percent. This growth
    supports the President's National Security Strategy for
    Homeland Security, and it supports the full range of Coast
    Guard missions.

            HIGHLIGHTS OF SERVICE TO THE NATION OVER THE PAST MONTH

        From my perspective, this budget growth is more than
    justified. We continue to apply our budget both effectively and
    efficiently, and often achieve extraordinary operational
    outcomes for the American people. I have been a part of the
    Coast Guard for 40 years now, and I continue to be amazed at
    the performance of our men and women every day. In fact, our
    operations just over the past month paint a clear and vivid
    picture of the scope and the national importance of the
    services we provide to the American public.
        We responded to the distress calls from the burning and
    sinking ship/tanker, Bow Mariner, just this month, 50 miles off
    shore. Our rescue swimmer deployed in 44-degree, oil-covered
    water to save six crewmen.
        Our search and rescue response capability was sustained,
    even though eighteen cutters, eight aircraft, and almost
    fourteen-hundred personnel deployed between the coast of Haiti
    and South Florida this month. And as conditions deteriorated in
    Haiti, Coast Guard cutters intercepted over a thousand
    Haitians, and safely repatriated them, thus fulfilling our
    President's mandate to repatriate Haitian migrants and present
    a deterrent to mass migration.
        This week, the Coast Guard cutter, Midget, on patrol in the
    Eastern Pacific, returning home to Puget Sound after this month
    seizing over 27,000 pounds of cocaine in three boardings,
    setting a record for the most cocaine seized by a cutter on a
    single patrol.
        Today, four 1410-foot cutters, two port security units, and
    477 people are currently providing critical support to
    operations in Iraq. And today, we have two polar ice breakers
    returning home after the most successful resupply of McMurdo
    Station in recent years. We were successful in implementing the
    requirements for the Maritime Transportation Security Act of
    2002 and will be ready to commence aggressive compliance
    oversight on July 1.
        These are just the highlights of our service to the Nation
    over this past month. The 2005 budget request provides the
    resources necessary for the Coast Guard to continue this high
    level of service to the American public. We have four
    priorities embedded in this budget.

                 FOUR PRIORITIES EMBEDDED IN THE BUDGET REQUEST

        First, is to recapitalize our operational assets. Our
    greatest threat to mission performance continues to be that our
    aircraft, our boats, and cutters are aging, technologically
    obsolete, and require replacement and modernization. The
    integrated Deepwater system, or Deepwater, is the answer to
    these concerns.
        My second priority is to ensure consistent performance
    across all missions by ensuring the right force structure and
    the right set of capabilities. The 2005 budget adds capability
    and capacity to enable across-the-board mission performance,
    including operational funding for additional eleven patrol
    boats, these 87-foot patrol boats, and the transfer of five
    179-foot PC patrol boats from the Navy, and overall, adding
    over 1,300 people to our workforce in 2005.
        My third priority is to aggressively implement the
    comprehensive requirements of the Maritime Transportation
    Security Act of 2002. Over $100 million and 791 new personnel
    support this critical security initiative.
        My fourth priority reflected in the 2005 budget is to
    expand what we have been calling Maritime Domain Awareness.
    Expanding awareness of activities occurring in the maritime
    domain is critical to enhancing our performance across all
    mission areas. And we must identify and understand threats,
    disseminate timely information to our operational commanders
    and our homeland security partners in order to respond to
    terrorist attacks, drug smuggling, illegal migration, and so
    forth.
        Of course, the Coast Guard people make our operational
    excellence possible, and the successful operational tempo
    demonstrated over the last month is testimony to the skill and
    commitment of our personnel. They routinely put service to our
    Nation above all else, and they are my highest priority. And
    this budget request improves the quality of life of Coast Guard
    men and women, by providing a pay raise, and improving basic
    allowance for housing.
        Most importantly, through Deepwater, through Rescue 21, and
    other modernization efforts, our Coast Guard people will be
    provided with the quality equipment they deserve to do their
    job.

                               prepared statement

        Mr. Chairman, thank you for the opportunity to testify
    today, and I will be pleased to answer any questions that you
    may have.
        Senator Cochran. Thank you very much, Admiral Collins.
        [The statement follows:]

                Prepared Statement of Admiral Thomas H. Collins

        Introduction Good morning, Mr. Chairman and distinguished members
    of the Subcommittee. It is a pleasure to appear before you today to
    discuss the Coast Guard's fiscal year 2005 budget request, and its
    critical importance in your Coast Guard being able to deliver essential
    daily services to the American public.
        The Coast Guard's fiscal year 2005 budget proposes budget authority
    of $7.46 billion, a 9 percent increase over fiscal year 2004, and
    continues our effort to enhance capability and competencies to perform
    both safety and security missions. It supports the goals of the
    President's National Strategy for Homeland Security to prevent
    terrorist attacks, reduce our vulnerabilities, and minimize damage from
    attacks that do occur.
        Before I discuss our fiscal year 2005 budget, I would like to take
    a few moments to discuss some of our accomplishments during the past
    year. You deserve a quick report on how we have used the resources this
    Subcommittee has provided us in the past and I am proud of the results
    that Coast Guard men and women continue to deliver for the country.
    During fiscal year 2003, the Coast Guard:
      --Interdicted over 6,000 undocumented migrants attempting to
            illegally enter the country by sea.
      --Prevented more than 136,800 pounds of cocaine, over 14,000 pounds
            of marijuana and more than 800 pounds of hashish from reaching
            U.S. shores.
      --Aggressively conducted more than 36,000 port security patrols,
            including 3,600 air patrols, 8,000 security boardings and over
            7,000 vessel escorts.
      --Deployed the largest contingent of Coast Guard personnel overseas
            since the Vietnam War to support Operation Iraqi Freedom,
            including 11 cutters, two shoreside support units, and over
            1,200 personnel.
      --Saved the lives of nearly 5,100 mariners in distress and responded
            to more than 31,500 calls for assistance.
      --Boarded more than 3,400 fishing vessels to enforce safety,
            environmental and economic laws.
      --Mobilized 64 percent of our reserve force to enhance protection of
            our ports, waterways and critical infrastructure during
            heightened states of alert, and to support the Combatant
            Commanders.
      --Kept critical shipping channels clear of ice in the Great Lakes and
            New England ensuring the availability of critical energy
            products.
      --Maintained more than 50,000 Federal aids to navigation along 25,000
            miles of maritime transportation highways.
      --Responded to over 19,000 reports of water pollution or hazardous
            material releases.
      --Completed the most difficult re-supply of McMurdo Station
            (Antarctica) during Operation Deep Freeze in 40 years. USCGC
            Polar Sea and USCGC Healy smashed through 50 miles of ice more
            than 13-feet thick to enable U.S. scientists to continue their
            studies of the Earth's climate.
        In addition, we have become a proud member of the Department of
    Homeland Security that consolidated 22 agencies and nearly 180,000
    employees. We are committed to working with our partner agencies as one
    team engaged in one fight, and I truly believe having one Department
    responsible for homeland security has made America more secure today.
    An example of this one team-one fight motto is very evident in the
    developing events in Haiti. Under the direction of the Secretary of
    Homeland Security, the Homeland Security Task Force--Southeast was
    stood-up as part of OPERATION ABLE SENTRY. Led by Coast Guard Rear
    Admiral Harvey Johnson, the task force is comprised of many agencies
    chartered to plan, prepare, and conduct migrant interdiction operations
    in the vicinity of Haiti due to the escalation of violence in that
    country and the threat of a mass exodus of undocumented migrants. In
    the first days of interdiction operations, the task force demonstrated
    impressive agility and synergy:
      --Coast Guard cutters, with Citizenship and Immigration Service (CIS)
            asylum pre screening officers and interpreters aboard,
            interdicted seven Haitian vessels with 1,076 undocumented
            migrants,
      --Coast Guard and Immigration and Customs Enforcement (ICE) aircraft
            patrolled the skies throughout the operating area,
      --Coast Guard, ICE, and Customs and Border Protection (CBP) boats
            conducted coordinated patrols off the Florida coast,
      --Coast Guard and ICE conducted a coordinated boarding of a boat
            suspected of being highjacked off the coast of Miami,
      --Coast Guard, CBP, ICE, and the Transportation Security
            Administration command center, public affairs, and intelligence
            staffs fully engaged,
      --Federal Emergency Management Agency (FEMA) deployed three
            Information and Planning Specialists to the task force in
            support of contingency planning.
        In addition, we have begun aggressively implementing the Maritime
    Transportation Security Act thanks in large part to a herculean inter-
    agency effort. Final Rules were published in October 2003 and security
    plans from approximately 9,000 vessels and 3,200 facilities were due on
    December 31, 2003. To date, approximately 97 percent have been
    received. We will continue to aggressively pursue 100 percent
    compliance, and have instituted a phased implementation of penalties to
    ensure that all regulated facilities have implemented approved security
    plans by the 1 July 2004 deadline. We completed eleven port security
    assessments, and have established 43 Area Maritime Security Committees
    to provide enhanced planning, communication and response for our
    nation's ports. We have met with nearly sixty countries representing
    the vast majority of all shippers to the United States., reinforcing a
    commitment to the International Ship and Port Facilities Security
    (ISPS) code. We have commissioned additional Maritime Safety and
    Security Teams (MSSTs) and plan to have 13 teams by the end of CY 2004.
    We are installing an Automatic Identification System (AIS) network in
    nine coastal locations that have Vessel Traffic Services improving our
    awareness of the maritime domain, and are simultaneously designing a
    nationwide system.
    The Need to Sustain Growth in fiscal year 2005
        Despite these accomplishments, there is still much to do. The last
    few weeks paint a clear and vivid picture of the breadth, scope and
    national importance of all Coast Guard missions. Rescue personnel from
    our mid-Atlantic units responded to the distress call from the burning
    and sinking Singaporean tanker Bow Mariner, and six crewmen were saved
    from 44-degree water. A Coast Guard cutter seized the entire catch from
    a fishing vessel off the New England coast for having twice the legal
    limit of lobster on board and more importantly having female egg
    bearing lobsters that a biologist indicated had been scrubbed of eggs.
    Our search and rescue and living marine resource response capability
    was sustained even as 15 cutters, 6 aircraft, and approximately 1,550
    personnel deployed south positioning from the coast of Haiti to the
    approaches to South Florida as part of Homeland Security Task Force-
    Southeast, and interdicted 1,075 Haitian migrants. Simultaneously, we
    have four Patrol Boats, two Port Security Units, and 377 personnel
    deployed in support of operations in Iraq. As you can see, demand for
    Coast Guard resources continue to expand, while our ships and aircraft
    continue to age. The Coast Guard is the nation's lead Federal agency
    for maritime homeland security and marine safety. Critical new
    resources are required to establish a new level of maritime security
    while continuing to perform the full range of Coast Guard missions.
        The budget requests resources that are necessary for the Coast
    Guard to fulfill its responsibilities to the American public. For
    fiscal year 2005, my priorities are:
      --Recapitalize operational assets;
      --Enhance performance across all missions by leveraging Coast Guard
            authorities, capabilities, competencies and partnerships;
      --Aggressively implement the comprehensive requirements of MTSA; and
      --Expand awareness of activities occurring in the maritime domain.
    Recapitalize Operational Assets
        The Coast Guard's greatest threat to mission performance continues
    to be that our aircraft, boats and cutters are aging, technologically
    obsolete, and require replacement and modernization. The majority of
    these assets will reach the end of their service life by 2008, and have
    increasing operating and maintenance costs, which results in lost
    mission performance, mission effectiveness, unnecessary risks, and wear
    and tear on people. These assets are failing at an alarming rate.
    Recent asset failures and their subsequent impact on operational
    readiness exemplify the downward readiness spiral created by
    increasingly aging capital assets coupled with a more demanding
    operational tempo. Frankly, the existing system is failing in numerous
    areas and I am concerned that we are reaching a ``declining readiness
    spiral'' phenomenon. Deferred modernization results in reduced patrols
    and readiness, corresponding increased maintenance needs and higher
    total ownership costs. Recapitalization funds are then needed to keep
    old assets operating, which only defers modernization starting this
    declining cycle over again. The Coast Guard is faced with trading asset
    modernization funding toward legacy asset maintenance and capability to
    address immediate safety and reliability concerns. Some examples of why
    I am so concerned:
      --HH-65 Helicopter engine system casualties.--In-flight engine
            partial power losses occurred at a rate of 63 per 100,000
            flight hours in fiscal year 2003, and is significantly higher
            so far in fiscal year 2004. This rate far exceeds the FAA
            standard of one per 100,000 hours and the U.S. Navy Safety
            Center guidelines of no more than 10 mishaps per 100,000 flight
            hours. HH-65 helicopters are critical to Coast Guard operations
            including ongoing efforts off the coast of Haiti.
      --110-foot Patrol Boats.--To date, 20 hull breaches requiring
            emergency dry docks. One cutter required emergency dry dock for
            hull breach only 14 weeks after a 10-month hull renewal project
            that had cost $2 million. The 110-foot fleet is the high-speed
            workhorse during migrant interdiction operations such as the
            ongoing events in the vicinity of Haiti, and has repatriated
            927 Haitian migrants thus far.
      --378-foot High Endurance Cutter.--3 out of total class of 12 ships
            have recently missed operations due to unscheduled maintenance
            to failing sub-systems. A 378-foot cutter is currently serving
            as the on-scene command ship for Haitian operations.
        All three of these asset classes (HH-65, 110, 378) are currently
    supporting the Coast Guard missions such as migrant and drug
    interdiction operations, ports waterways and coastal security,
    fisheries enforcement, and search and rescue, and the Coast Guard
    continues to be successful in spite of casualties and readiness levels.
    This success comes through the extraordinary efforts of Coast Guard
    personnel, and I'm concerned about our ability to continue this
    performance in the future. Cocaine seizures to date in fiscal year 2004
    total 38.9 metric tons, nearly double last year's pace which yielded
    the second highest seizure total ever (62.1 metric tons). The threat of
    a mass migration from Haiti, coupled with the flow of illegal drugs and
    undocumented migrants from other countries towards the United States,
    highlights the value that the U.S. Coast Guard provides our nation.
        The Integrated Deepwater System (IDS) is the answer to these
    concerns and entails far more than the progressive replacement of our
    aging inventory. IDS is an integrated systems approach to upgrading
    existing legacy assets through a completely integrated and
    interoperable system. All of Deepwater's highly capable assets will be
    linked with modern command, control, communications, computers,
    intelligence, surveillance, and reconnaissance (C4ISR) architecture.
    The ability to link and network disparate platforms seamlessly over
    vast distances is an essential aspect to providing the Coast Guard the
    capability to detect and interdict potential threats prior to reaching
    our shores and ports. Deepwater assets are America's first line of
    defense to counter threats in the maritime domain, and thwart
    catastrophes to vulnerable infrastructure (oil rigs, deepwater
    channels, shipping). Funding for the Deepwater program is a critical
    investment in homeland safety and security and means a more secure
    United States of America.
        The Coast Guard's deepwater assets are not the only capital assets
    that desperately need replacement. The fiscal year 2005 budget also
    requests resources for:
      --Rescue 21 project, which will be the primary command and control
            system to perform the functional tasks of detection,
            classification, and command and control in the inland and
            coastal zones for Search and Rescue. The existing National
            Distress System is inadequate to meet the safety requirements
            of growing marine traffic, and is not capable of meeting the
            requirements of the International Convention for the Safety of
            Life at Sea (SOLAS) treaty. Rescue 21 will expand existing
            capability through greater area coverage, and improved
            direction finding capability to enhance Coast Guard emergency
            response;
      --Great Lakes Icebreaker, which is scheduled to replace USCGC
            MACKINAW in 2006 after 57 years of continuous service;
      --Response Boat--Medium, which will replace the aging 41-foot Utility
            Boat, and will meet mission requirements for search and rescue,
            and emerging homeland security missions.
    Enhance Mission Performance
        To enhance mission performance the Coast Guard must optimize its
    unique authorities, capability, competency, and partnerships; while
    gaining the capacity in each to complete our full range of missions.
    Due to the Coast Guard's multi-mission nature, resources provided will
    assist in the performance of all missions. New assets will be used to
    conduct fishery patrols and search and rescue cases as well as protect
    the Nation against terrorist attacks.
        Fiscal year 2005 budget initiatives that add capacity to enable
    mission performance include:
      --Operational funding for eleven 87-foot Coastal Patrol boats built
            in 2004;
      --Operational funding for five 179-foot Patrol Coastals being
            transferred to the Coast Guard from the Navy;
      --Safety configuration changes to the 47-foot Motor Life Boat, which
            will allow crews to safely conduct missions in deteriorating
            weather conditions.
    Aggressively Implement the Maritime Transportation Security Act of 2002
        During the past year, the Coast Guard led the international
    maritime community in adopting a new international security regime
    requiring vessels and port facilities to develop security plans. This
    effort paralleled the requirements this committee helped establish
    through enactment of the Maritime Transportation Security Act (MTSA) of
    2002. These regulations require that United States ports, vessels, and
    facilities each have a plan to protect against terrorist attacks.
    Aggressive implementation of MTSA is essential if we are to maintain
    the security of our ports and waterways at acceptable levels. To
    implement and enforce these regulations, the Coast Guard has a
    recurring requirement to develop, review, approve, and ensure vessels
    and facilities are sustaining their own security responsibilities for
    all aspects of maritime security. Approximately 97 percent of required
    vessel and facilities have turned in security plans to date. We are
    issuing notices of violation to the 10 percent that missed the
    deadline, are starting the process of approving security plans, and
    have commenced training of Coast Guard personnel to complete on-site
    verification. Providing the Coast Guard with the resources necessary to
    undertake this implementation and enforcement effort is a key step
    toward enhanced port, vessel and facility security.
    Maritime Domain Awareness
        Expanding awareness of activities occurring in the maritime domain
    is critical to enhancing Coast Guard performance in all mission areas.
    The U.S maritime jurisdiction is enormous, covering some 3.5 million
    square miles of ocean and 95,000 miles of coastline. In addition, the
    Coast Guard projects a defense-in-depth presence in other areas such as
    the Caribbean and eastern Pacific to deter, detect, and interdict drug
    and migrant smugglers. The Coast Guard operates at times and in places
    no United States forces operate. The ongoing events off the coast of
    Haiti highlight the need for a robust maritime domain awareness
    capability. The Coast Guard has minimal capability to monitor the
    activities occurring within this maritime zone without the presence of
    a cutter or aircraft. We must identify and understand threats, and
    disseminate timely information to our operational commanders and our
    homeland security partners in order to respond to emerging threats such
    as terrorist attacks, drug smuggling, illegal migration, location of
    distressed boaters, or illegal fishing before they reach our borders.
    An intelligence and warning system that detects indicators of potential
    terrorist activity before an attack occurs is necessary to take
    preemptive and protective action. We are currently installing Automatic
    Identification System (AIS) in our Vessel Traffic Service (VTS) ports,
    and are formalizing the operational requirements to award a contract
    for installation of a nationwide AIS network. $4 million is requested
    in fiscal year 2005 to continue this important project. This budget
    submission also includes 35 people to integrate all of our projects
    that provide maritime domain awareness (MDA), including AIS, Deepwater
    and Rescue 21, and these people will partner with the other Department
    of Homeland Security agencies, the Navy, and other entities to unite
    our joint efforts.
    Conclusion
        Thank you for your support in the fiscal year 2004 Emergency
    Supplemental. Funding is ensuring Coast Guard forces remaining in Iraq
    are properly resourced for the rest of fiscal year 2004.
        None of what the Coast Guard has accomplished or is striving to
    achieve is possible without our people--the bedrock of our service.
    They routinely put their service above all else and I am convinced of
    their unwavering dedication to the security of this Nation and the
    safety of its citizens. They are our highest priority and most valuable
    resource.
        The Coast Guard's fiscal year 2005 budget request improves the
    quality of life for Coast Guard men and women and their families by
    providing a pay raise, and continuing improvements in Basic Allowance
    for Housing (BAH) reducing out-of-pocket expenses from 3.5 percent to
    zero, and gives them the equipment and assets that will allow them to
    best contribute their time and talents to the safety and security of
    our nation.
        I have asked every member of the Coast Guard to continue to focus
    intently and act boldly on the three elements of my direction: improve
    Readiness; practice good Stewardship; and enhance the growth,
    development and well being of our People. With this diligence we will
    fulfill our operational commitment to America and maintain our high
    standards of excellence.
        I look forward to working with you to that end.
        Thank you for the opportunity to testify before you today. I will
    be happy to answer any questions you may have.

        Senator Cochran. Admiral Stone, you may proceed with your
    opening statement.

                      STATEMENT OF ADMIRAL DAVID M. STONE

        Admiral Stone. Thank you, sir.
        Good morning, Mr. Chairman, Senator Byrd, and members of
    the Subcommittee. I am honored to appear before you this
    morning to discuss the President's fiscal year 2005 budget
    request for the Transportation Security Administration.
        First, I would like to take a moment to comment on the
    tragic bombings in Madrid and Moscow. We are closely examining
    these events so we may deter and prevent similar attacks in the
    United States. Over the last 2 years, the Department of
    Homeland Security has worked with Federal and State
    counterparts to bolster the security of rail and mass transit
    systems, conducting criticality assessments, coordinating
    information sharing, and improving training.
        Building on this foundation, yesterday, Secretary Ridge
    announced additional measures to further strengthen our rail
    and transit systems. We will develop a rapid-deployment mass
    transit canine program and continue to partner with local
    authorities to provide additional training and assistance for
    local canine teams.
        TSA will implement a pilot program to test the feasibility
    of screening luggage and carry-on bags to detect explosives at
    rail stations and aboard trains. Working with the Department,
    we will engage industry, and State and local partners to
    establish baseline security measures based on best practices,
    and we will expand security education and awareness programs.
    Security technologies will be examined for their potential
    application in the intermodal environment.

                        FISCAL YEAR 2005 BUDGET REQUEST

        Turning to the President's budget proposal for fiscal year
    2005, the $5.3 billion that is requested for TSA is $892
    million more than the fiscal year 2004 level. The significant
    portion of this funding would support and improve passenger and
    baggage screening operations at the Nation's airports,
    including $145 million to fully implement screening and
    training programs, and $86 million to provide technological
    support at passenger checkpoints.
        TSA is right sizing and stabilizing screening operations,
    investing more hiring authority with our Federal Security
    Directors to provide more flexibility in addressing staffing
    needs. Local hiring, local testing, and local training will be
    the keys to our future.
        We are assessing the expansion of contract screening; and
    to help us make these decisions, a thorough evaluation of the
    five private pilot programs is currently under way, with the
    results expected in April of this year.
        TSA's Federal Flight Deck Officer Program adds another
    important layer to our rings of aviation security. We are
    seeking $25 million to support and expand training for pilots
    who are volunteering to carry firearms to defend aircraft
    flight decks. In January, TSA began doubling the number of FFDO
    classes, and we plan to provide initial training and
    qualifications for thousands of FFDOs by the end of this fiscal
    year. We expect to conduct our first cargo FFDO prototype
    program next month.
        A total of $60 million is requested for the second-
    generation Computer-Assisted Passenger Pre-Screening System,
    CAPPS II, in fiscal year 2005. Developed with the utmost
    concern for individual privacy rights, there is a pressing need
    to move forward with testing of CAPPS II. The current passenger
    pre-screening system operated by air carriers is clearly not
    adequate to address the asymmetric threats that confront us on
    a daily basis.
        To deny targets the opportunity to exploit our thriving air
    cargo system, TSA has developed an air cargo strategic plan
    within the $85 million requested for air cargo screening in
    fiscal year 2005. TSA is requesting $55 million for an
    aggressive R&D program to investigate technologies that will
    improve our ability to screen high-risk air cargo.

                               prepared statement

        In closing, I would like to thank you, Mr. Chairman, for
    your support, and that of the Subcommittee members. I look
    forward to answering your questions today.
        Senator Cochran. Thank you very much, Admiral Stone.
        [The statement follows:]

                      Prepared Statement of David M. Stone

        I am pleased to testify before the Subcommittee on the President's
    fiscal year 2005 budget request for the Transportation Security
    Administration (TSA). TSA's mission, to protect the Nation's
    transportation systems to ensure the freedom of movement for people and
    commerce, is completely aligned with the mission of the Department of
    Homeland Security (DHS), and our objectives fully support the
    Department's strategic goals.
        The tragic bombings of March 11 in Madrid, Spain, are a great
    concern to us all. Before I discuss the President's fiscal year 2005
    budget request for TSA, I want to assure the Subcommittee that DHS is
    supporting the investigation into the attacks with our international
    partners and monitoring the investigation to learn more about how these
    terrible attacks transpired. Although we have no specific indicators
    that terrorist groups are planning such attacks in the United States,
    DHS has reached out to state and local security, law enforcement, and
    transit and rail officials to ensure vigilance in light of these
    incidents.
        I want to assure you that DHS is devoting significant attention and
    resources on rail security across the Federal Government. Between
    fiscal year 2003 and this year, DHS will have provided $115 million to
    high-risk transit systems through the Urban Area Security Initiative
    (UASI) in the Office for Domestic Preparedness. The Budget proposes to
    double our total commitment to UASI, to $1.4 billion in fiscal year
    2005. Our partners in the Department of Transportation (DOT) stepped up
    inspection of rail lines and security requirements, and DOT is also
    assisting Amtrak implement improved security measures. Under the
    Budget, the Federal Transit Administration (FTA) will award nearly $4
    billion in grants to transit agencies, resources that can be used for
    security improvements.
        TSA is providing strong leadership in this effort and has the
    resources it needs under the request to do its part. Over the last 2
    years, DHS and DOT have worked with transit and rail operators to
    significantly improve security. TSA has worked with the Information
    Analysis and Infrastructure Protection Directorate and DOT's Federal
    Railroad Administration and FTA to conduct criticality assessments of
    rail and transit networks operating in high-density urban areas. As a
    result, we have better information to focus current and future security
    resources and transit systems are producing robust security and
    emergency preparedness plans. In addition, DHS is coordinating
    information and threat sharing through the Surface Transportation
    Information Sharing and Analysis Center (ISAC) managed by the
    Association of American Railroads, including deploying TSA personnel to
    the ISAC and hosting ISAC representatives at TSA's Transportation
    Security Coordination Center (TSCC) in Virginia. We have held numerous
    security exercises to bring together rail carriers, Federal and local
    first responders, and security experts, and have addressed potential
    gaps in antiterrorism training among rail personnel.
        I hope to work with the Subcommittee to continue to determine how
    best to strengthen rail and transit security within the resources
    levels of our request.
    The President's fiscal year 2005 Budget Request for TSA
        The President's fiscal year 2005 budget request will support key
    initiatives to improve the effectiveness and efficiency of TSA's
    efforts to secure our Nation's transportation system. TSA's top
    priorities in fiscal year 2005 include:
      --Strengthening aviation security.--We will stabilize and enhance our
            system-ofsystems approach to aviation security, measure and
            improve screening performance, develop advanced screening
            technology, and expand the Federal Flight Deck Officer program.
      --Upgrading access and inspection security.--TSA will continue to
            develop and implement credentialing and background check
            programs, continue to support local law enforcement at
            airports, strengthen inspection, and enforce agency security
            regulations.
      --Improving air cargo security.--In partnership with air carriers and
            other stakeholders, TSA will continue to implement the range of
            initiatives encompassed in its Air Cargo Strategic Plan.
      --Enhancing surface transportation security through intelligence,
            stakeholder outreach, and integration.--TSA will work with our
            colleagues in DHS and in the Department of Transportation to
            assess the risk of terrorist attacks to all surface modes of
            transportation and develop and implement security strategies to
            thwart attacks while minimizing the impact on the flow of cargo
            and mobility of passengers.
        The President's fiscal year 2005 Budget Request of $5.296 billion
    for TSA is dedicated to stabilizing and strengthening TSA's essential
    mission. This request is $892 million more than the adjusted enacted
    level for fiscal year 2004.
    Strengthening Aviation Security
        The majority of TSA funding in fiscal year 2005 is requested to
    support and improve passenger and baggage screening operations at the
    Nation's airports, an essential layer in TSA's rings of aviation
    security. Today TSA is right-sizing and stabilizing screening
    operations based on security requirements and opportunities for
    increasing efficiencies in business processes so that at the end of
    fiscal year 2004 an appropriate mix of full-time and part-time
    personnel will represent no more than 45,000 full-time equivalents.
    Supporting and enhancing the effectiveness of screening operations
    requires a broad range of services and activities, from training and
    supplies to performance management systems, from management and
    headquarters support to human resources services and equipment
    maintenance. As part of our long-term plan for stabilizing our
    workforce, we are evolving to a business model that vests more hiring
    authority at the local level with our Federal Security Directors
    (FSDs). The original methods we used in centralizing recruitment,
    assessment, hiring, and training of screeners were necessary in the
    fastpaced environment to meet the original statutory deadlines. This
    centralized model is not the right fit for sustaining an existing
    workforce. This is a high priority item for TSA.
        Information and data on TSA performance are critical to our ability
    to make strategic decisions. TSA is implementing measures to assess
    performance, including TSA's Passenger Screening Effectiveness Index,
    Cost Per Passenger, Cost Per Bag, and Customer Service Index elements
    of the Screening Performance Indices. This information will be used to
    assess the impact of higher passenger volume on the effectiveness of
    our security operations and the public's level of satisfaction. TSA's
    Customer Satisfaction Index is based on feedback from passenger surveys
    at airports, polls, and traveler comments. TSA's score for all airports
    is 80 percent, indicating that overall, passengers are ``more than
    satisfied'' with their experience at passenger security checkpoints.
    Over 1.7 million passengers and 2 million bags are processed through
    airport checkpoints on a daily basis, yet average wait times are still
    low.
        For fiscal year 2005, the President's budget requests $2.424
    billion for 45,000 screener FTE and 1,210 terminal screening managers.
    At the requested level, funding will support screener salaries and
    management at all commercial airports. The screener workforce will be
    cross-trained to perform duties both as passenger and baggage
    screeners. Included in the requested level is $130 million for contract
    screening airports. This funding is based on an estimate of resources
    necessary to maintain the current five pilot project airports. However,
    actual funding needs for contract screening operations may vary
    depending on the current evaluation of contract screening, the
    program's future deployment and management structure, and other
    contract screening transitions at airports.
        A total of $145 million is requested in fiscal year 2005 to fully
    implement the passenger and baggage screening training programs
    critical to maintaining high skill levels in our screener workforce.
    This will support training for replacement screeners as well as support
    recurrent and advanced training to the entire screener workforce to
    meet and maintain proficiency and qualification standards. All
    passenger screeners must meet annual recertification standards, passing
    a Standard Operating Procedures Job Knowledge Test, an Image
    Certification Test, and a Practical Skills Demonstration, and achieve a
    fully successful performance rating. Recertification for 2003-2004
    began on October 1, 2003, and will be completed this month.
        As reported to this Subcommittee last fall, TSA recognizes that we
    must continually work to maintain and sharpen screener capabilities.
    TSA has made significant progress in implementing the Short-Term
    Screening Improvement Plan, a series of integrated interventions that
    include enhanced training and technology deployment, policy and process
    reengineering, increased support to the field, and increased covert
    testing.
        TSA uses its Special Operations Program to provide ongoing and
    immediate feedback to screeners, their supervisors, and TSA leadership
    on screener performance. The Special Operations Program's overall
    objectives are to test the security systems at the airports and to
    introduce difficult, real-life threat items to the screener workforce.
    Once covert testing is completed at a checkpoint, Special Operations
    teams conduct post-test reviews with available screeners to reenact the
    test and provide training.
        As part of the Short-Term Screening Improvement Plan, Special
    Operations teams have tested 68 airports between October 1, 2003, and
    February 1, 2004. Testing between October 1 and December 31, 2003,
    focused on increasing the number of airports tested for the first time,
    to establish a performance baseline. In January 2004, Special
    Operations teams began retesting airports to determine whether
    performance improved once the screening performance initiatives had
    been deployed. In January 2004, Special Operations teams retested 15
    airports, with 11 airports improving overall checkpoint performance an
    average of 21 percent.
        These overall covert checkpoint tests are also showing improvement
    in individual screener performance. Between September 2002 and February
    1, 2004, TSA conducted 1,227 checkpoint tests at 171 airports.
    Checkpoint test results have improved nearly 14 percent. During January
    2004 testing, the pass rate for two of the checkpoint tests was nearly
    90 percent or better.
        To maintain high levels of screener proficiency, TSA's screener
    improvement plan places a strong emphasis on recurrent screener
    training and supervisory training. Over 700 inert Modular Bomb Set (MBS
    II) and weapons training kits have been deployed to every airport in
    the country as an integral part of TSA's recurrent training for
    screeners, enabling them to see and touch the components of improvised
    explosive devices and weapons. TSA is also developing protocols to help
    FSDs conduct their own airport level screening testing. To blend
    nationally and locally developed training, TSA has established the
    ``Excellence in Screener Performance'' video training series. The first
    two videos, ``Hand Held Metal Detector/Pat Down Search'' and ``X-ray
    Operator'' have been delivered to the field. Training videos on
    physical bag search and screening persons with disabilities are now in
    production. The third part of our recurrent training program is a
    series of web-based and computer-based screener training. Eight
    training products are in production, with the first due to the field in
    March 2004. From the standpoint of training delivery, our most
    significant accomplishment is the launching of our learning management
    system, the TSA Online Learning Center (OLC). The OLC makes available
    over 350 general training and development courses in addition to TSA
    specific training.
        Recognizing the need to provide our front line supervisors with the
    tools they need to manage effectively the screener workforce, we have
    sent more than 2,500 supervisors to introductory leadership training at
    the Graduate School, United States Department of Agriculture. We will
    continue to offer 10 sessions each week until all screening supervisors
    have received this training. We are currently adding a customized
    module to this training that includes airport-specific examples of
    leadership issues they might encounter.
        TSA also has begun training some of its senior screeners to
    recognize patterns of unusual or suspicious behavior. This additional
    skill set will further enhance aviation security.
        TSA promptly investigates significant security incidents as they
    are disclosed. Using teams of security specialists and investigators
    who recreate the security breach, vulnerabilities in the system are
    revealed, and TSA can immediately take corrective action. TSA has also
    forged a working relationship with other Federal law enforcement
    agencies and task forces when incidents require coordinated
    investigative activities.
        TSA's 158 FSDs form the backbone of security management and
    leadership at the Nation's airports. Our budget requests $284 million
    in fiscal year 2005 to support our FSDs and other airport security
    management and staff positions nationwide. In order to streamline the
    administrative operations at airports, larger airports have been
    designated as hubs, providing security direction, administrative
    support, and staff resources to smaller airports.
        In fiscal year 2005, TSA will continue the deployment of electronic
    explosive detection equipment at the Nation's airports and look for
    efficiencies to improve passenger and baggage screening. The total
    fiscal year 2005 discretionary funding request for explosives detection
    systems (EDS) and explosives trace detection (ETD) equipment purchase
    and installation is $150 million, with $250 million through the
    Aviation Security Capital Fund, for a total resource level of $400
    million. Vision 100--Century of Aviation Reauthorization Act (Vision
    100), Public Law 108-176, established the Aviation Security Capital
    Fund. The first $250 million of passenger fees authorized by the
    Aviation and Transportation Security Act, Public Law 107-71, will be
    deposited into this fund. Fund resources can be spent on projects to
    replace baggage conveyer systems related to aviation security, to
    reconfigure terminal baggage areas as needed to install EDS, to deploy
    EDS in airport terminals, and for other airport security capital
    improvement projects.
        TSA's EDS/ETD equipment purchase and installation program is the
    key to compliance with statutory requirements for full electronic
    screening of checked baggage. TSA purchases and installs this equipment
    through a variety of mechanisms, including congressionally authorized
    Letters of Intent (LOIs), which provide a partial reimbursement to
    airports for facility modifications required to install in-line EDS
    solutions. TSA has issued eight airport LOIs, covering 9 airports. TSA
    is also using resources to purchase and install EDS and ETD machines at
    airports outside the LOI process.
        The fiscal year 2005 budget request includes proposed language to
    maintain policies which guide the current program cost share and
    distribution of funding for LOIs, keeping the cost share at 75 percent
    for large airports and 90 percent for all other airports and overriding
    allocation formulas. TSA believes the current cost share is fair and
    equitable and that revised allocation formulas could potentially
    disrupt current LOI commitments and be detrimental to long-term
    security effectiveness.
        TSA is also requesting approximately $86 million to provide
    technological support at passenger checkpoints. This funding would
    support reconfiguration at a portion of the 34 remaining airports that
    would benefit from reconfiguration and provide $30 million for purchase
    of advanced checkpoint equipment. This funding also supports TSA's
    continuing implementation of the Threat Image Projection (TIP) program,
    an essential element of TSA's screening improvement program. TIP
    superimposes threat images on X-ray screens during actual operations
    and records whether or not screeners identify the threat object.
    Through a tremendous example of private-public partnership, a
    significantly enhanced 2,400-image Threat Image Projection (TIP)
    library was uploaded to every TIP Ready X-Ray (TRX) in the country
    during the height of winter holiday travel season without interrupting
    service. This new TIP image library replaces the much smaller 200-image
    library developed by the Federal Aviation Administration (FAA) with
    images that will continuously provide screeners exposure to the most
    current threats, including improvised explosive devices (IEDs). Now 100
    percent of checkpoint security lanes are equipped with TRXs with the
    2,400-image TIP library, providing real-time data on screener
    performance. Data is available quickly at the local level and reported
    to headquarters for aggregated analysis and monitoring. Through this
    combination of increased deployment of TRX machines and activation of
    the expanded TIP image library, we are able to collect and analyze
    significant amounts of performance data that has not been previously
    available. TIP is an excellent tool for evaluating the skills of each
    individual screener so that we can focus directly on areas needing
    skill improvement. By regularly exposing screeners to a variety of
    threat object images, TIP provides continuous on-the-job training and
    immediate feedback and remediation.
        TSA uses a wide range of interconnected information technology
    solutions to maximize its security efforts. In the past, collecting TIP
    data for analysis and reporting was a cumbersome task. Network
    connectivity to checkpoints will be the ultimate answer to efficient
    collection, analysis, and reporting of TIP data. This effort will
    provide the capability for continuous training, including real-time
    training on current threats; greater capacity for monitoring TIP
    performance; connectivity with checked baggage areas; and a foundation
    for planned implementations of additional administrative, surveillance,
    CAPPS II, and other security enhancements. TSA is requesting
    approximately $294 million in fiscal year 2005 to support its
    Information Technology Core, which will provide the telecommunications
    infrastructure support and services necessary for TSA to fully utilize
    TIP capabilities.
        The President's fiscal year 2005 budget includes a request for $49
    million for TSA applied Research and development (R&D) and $50 million
    for Next Generation EDS. Working closely with the DHS Science and
    Technology (S&T) Directorate, we have established an ambitious program
    to develop and deploy new security technologies and use technology to
    enhance human performance. Technology can help us make our screening
    operations more effective, more efficient, less time-consuming, and
    less costly. TSA operates a state-of-the-art research laboratory, the
    Transportation Security Laboratory (TSL), in Atlantic City, New Jersey.
    Several screening and other security technologies are under development
    at the TSL, including an explosives detection portal to determine if
    explosives are being carried on a passenger's person, document scanners
    to detect trace amounts of explosive materials on items such as
    boarding passes, and scanners for better screening of casts and
    prosthetic devices. We are also developing EDS for carry-on baggage and
    improving explosives detection technology for screening liquids.
        We are continuing work on the Next Generation of EDS for checked
    baggage screening to increase throughput capacity, improve detection
    capabilities, and lower false positive alarm rates. Simultaneously, we
    are collaborating with new and existing vendors to develop technologies
    that will enable us to detect explosives in smaller amounts than are
    currently established in our certification standard and that will
    occupy a smaller footprint at airports. We have piloted an on-screen
    alarm resolution protocol and will soon start the training that will
    enable our screeners to more closely examine an image without opening a
    traveler's luggage, resulting in clearing more false positive alarm
    images without a drop in detection proficiency. Within the Next
    Generation program, we are also looking at new applications of X-ray,
    electro-magnetic, and nuclear technologies to probe sealed containers
    for materials that pose a threat to aviation security.
        We are planning fiscal year 2005 R&D efforts to combine expanded
    technological capabilities in conjunction with sensor fusion
    development. Unfortunately, the restricted space at airports and other
    transportation facilities will not support continuing additions to the
    footprints of our screening areas. Therefore, we must design systems
    that will address multiple threats within very confined spaces. The
    challenge of moving new technology from the laboratory to the real
    world is significant.
        TSA's R&D program also focuses on developing standards for
    biometric systems through ongoing pilot programs and laboratory
    efforts. TSA's efforts in this arena are being coordinated with the US
    VISIT program office. Research in biometrics technologies continues to
    be applicable and useful in supporting several TSA initiatives such as
    the Transportation Workers Identification Credential (TWIC) program,
    the Registered Traveler program, infrastructure access control
    programs, and employee screening.
        TSA's Federal Flight Deck Officer (FFDO) program has now been in
    place for more than 1 year, adding another important layer to our rings
    of aviation security. The fiscal year 2005 budget proposes $25 million
    to support and continue expansion of FFDO training for pilots at the
    Federal Law Enforcement Training Center in Artesia, New Mexico. TSA
    developed and implemented this program in close cooperation with
    organizations representing airline pilots, such as the Air Line Pilots
    Association and the Coalition of Airline Pilots Associations. Pilots
    provided valuable insights to TSA during the formation of the FFDO
    program and many of their suggestions are reflected today in the
    initial qualifications, training, and standard operating procedures for
    FFDOs; and training location and support facilities. In January 2004,
    TSA began doubling the number of FFDO classes, and we plan to provide
    initial training and qualification for thousands of FFDOs by the end of
    this fiscal year. TSA has streamlined the process for pilots to become
    FFDOs. The selection process consists of an on-line application, an
    hour-long computerized assessment, an interview, and a background
    check. FFDO assessments are administered at over 200 locations
    throughout the United States, and more are being added. Classes are
    available continuously except during certain holidays.
        Pilots also must attend re-qualification sessions twice a year to
    ensure that they maintain a high level of proficiency and familiarity
    with program requirements. Ten private, state, and local government
    sites are available for self-scheduling of re-qualification training.
    Sites were selected in geographically diverse locations that would be
    convenient to pilots. As the numbers of FFDOs grows, TSA will expand
    the number of recurrent training sites to meet their needs.
        With the enactment of Vision 100, the FFDO program has been
    expanded to include cargo pilots and other flight deck crewmembers. TSA
    is examining modifications to the current FFDO curriculum and operating
    procedures to reflect the different environment in which cargo pilots
    operate. TSA initiated the on-line application process for cargo and
    other flight deck crewmembers in February 2004 and expects to conduct
    its first cargo FFDO prototype program this April.
        A total of $60 million is requested for fiscal year 2005 for the
    second generation Computer Assisted Passenger Pre-Screening System
    (CAPPS II). CAPPS II is a limited, automated prescreening system
    authorized by Congress that will become a critical element in TSA's
    system-of-systems approach to security. Developed with the utmost
    concern for individual privacy rights, CAPPS II will modernize the
    prescreening system currently implemented by the airlines. It will seek
    to authenticate travelers' identities and perform risk assessments to
    detect individuals who may pose a terrorist-related threat or who have
    outstanding Federal or state warrants for crimes of violence.
        Under CAPPS II, airlines will ask passengers for a slightly
    expanded amount of reservation information, including full name, date
    of birth, home address, and home telephone number. With this expanded
    information, the system will quickly verify the identity of the
    passenger using commercially available data and conduct a risk
    assessment leveraging current intelligence information. The overall
    process will result in a recommended screening level, categorized as no
    risk, unknown or elevated risk, or high risk. The commercially
    available data will not be viewed by government employees, and
    intelligence information will remain behind the government firewall.
    The entire prescreening process is expected to take as little as five
    seconds to complete.
        TSA is carefully reviewing the recent report on CAPPS II issued by
    the General Accounting Office (GAO) and working diligently to resolve
    all concerns. GAO generally concluded that in most areas that Congress
    asked them to review, our work on CAPPS II is not yet complete. DHS has
    generally concurred in GAO's findings, which in our view validates the
    fact that CAPPS II is a program still under development. As we resolve
    issues of access to data needed for testing CAPPS II, and the testing
    phase moves forward and results in a more mature system, we are
    confident of our ability to satisfy all of the questions that Congress
    posed.
        Vision 100 transferred the Alien Pilot Security Assessment Program
    from the Department of Justice to the Department of Homeland Security.
    The law requires that DHS conduct background checks on aliens seeking
    flight training at U.S. flight schools, stipulating that checks must be
    completed within 30 days. TSA is currently working with the Federal
    Bureau of Investigation to implement this program, and we estimate that
    as many as 70,000 background checks will be required each year. TSA is
    requesting funding for fiscal year 2005 at a level of $4.6 million,
    which we estimate could be recovered in fees.
    Upgrading Access and Inspection Security
        The President's fiscal year 2005 budget requests $91.6 million in
    overall funding to strengthen security credential programs, with an
    estimated recovery of costs of $71.6 million in credential fees. This
    requested funding would support activities to develop the Registered
    Traveler program at a level of $15 million. TSA is analyzing whether a
    Registered Traveler program can effectively reduce the ``hassle
    factor'' in passenger and baggage screening without compromising
    aviation security. TSA envisions that a fully implemented Registered
    Traveler program would be voluntary in nature and could offer qualified
    participants an expedited travel experience. A comprehensive risk
    assessment would be conducted on Registered Traveler program applicants
    to determine their eligibility. TSA is working on a proposed strategy
    for implementing small-scale Registered Traveler pilot programs in
    fiscal year 2004, and requests $15 million to expand contract support
    and technology resources for the Registered Traveler program in fiscal
    year 2005. TSA will analyze the results of the pilot programs to
    determine the program's effects on security and customer service. TSA
    is also exploring technology solutions associated with non-intrusive
    positive identity verification at the passenger security checkpoint,
    such as biometrics, that would further expedite security clearance for
    registered travelers.
        In addition to the Registered Traveler program, requested funding
    for credential programs would support the Alien Pilot Security
    Assessment Program discussed above, the TWIC at a level of $50 million,
    the HAZMAT Driver License Endorsement Program at a level of $17
    million, and Credentialing Enterprise Start-up at $5 million. Because
    all Credentialing Enterprise programs involve the use of specific law
    enforcement and antiterrorist databases, TSA is developing a common
    platform of technology and contractor support to conduct appropriate
    background checks. Although each credentialing program may involve
    special requirements and adjudication, this common platform will
    realize economies of scale through shared resources such as systems
    equipment, database connectivity, contractor support space, and other
    start-up costs that will not be recovered through fees.
        We are developing a TWIC prototype and supporting measures to
    mitigate the threat of insider attacks to transportation
    infrastructure. During prototype, this credential will test the
    feasibility of bringing uniformity and consistency to the process of
    granting access to transportation workers entrusted to work in the most
    sensitive and secure areas of our national transportation system. The
    President's fiscal year 2005 request includes spending authority to
    begin implementing the TWIC concept within parameters that will be
    defined by the Administration after completion of the prototype
    assessment.
        TSA is requesting $120 million to support its contingent of
    regulatory compliance inspectors in fiscal year 2005. These inspectors
    ensure that airports, air carriers, and other regulated entities within
    the airport property are in compliance with all Federal security
    regulations. An additional $90 million will support reimbursements to
    state and local agencies providing law enforcement support for airport
    security checkpoints. An estimated 300 reimbursable agreements with
    state and local law enforcement agencies are necessary to provide the
    law enforcement support at levels deemed appropriate by TSA FSDs.
        The President's budget requests $17 million in fiscal year 2005 to
    support 354 K-9 units under the National Explosives Detection Canine
    Team program. TSA-certified canine teams perform a critical role in
    aviation security, performing multiple tasks throughout the entire
    airport environment, such as screening checked baggage, searching
    unattended bags, searching vehicles approaching terminals during
    increased threat levels, screening cargo on a limited basis, screening
    mail at certain pilot project locations, and responding to bomb
    threats. TSA helps local law enforcement agencies by procuring and
    training selected canines, training selected law enforcement officers,
    and by partially reimbursing agencies for costs.
    Improving Air Cargo Security
        Each year, U.S. air carriers transport approximately 12.5 million
    tons of cargo. To deny terrorists the opportunity to exploit our
    thriving air cargo system, TSA has developed an Air Cargo Strategic
    Plan that calls for the focused deployment of tools, resources, and
    infrastructure that are available today, as well as creating a
    foundation for future improvements as technology and resources become
    available. For fiscal year 2005, a total of $85 million is requested
    for TSA's aviation cargo screening program.
        TSA has prohibited all ``unknown shipper'' cargo from flying aboard
    passenger carriers since September 11, 2001, thereby limiting cargo to
    packages from identifiable shippers under the TSA Known Shipper
    program. TSA is rolling out an automated Known Shipper database that
    will allow air carriers and indirect air carriers to verify immediately
    the status of a specific shipper.
        Under the Air Cargo Strategic Plan, TSA will establish a Cargo Pre-
    Screening system that identifies which cargo should be considered
    ``high-risk,'' and work with industry and other Federal agencies to
    ensure that 100 percent of high-risk cargo is inspected. We are also
    partnering with stakeholders to implement enhanced background checks on
    persons with access to cargo and new procedures for securing aircraft
    while they are on the ground. A Notice of Proposed Rulemaking is in
    development for enhanced screening of cargo on passenger aircraft,
    along with stronger security measures for Indirect Air Carriers and the
    establishment of a mandatory security program for all-cargo carriers.
    TSA and U.S. Customs and Border Protection are working together on air
    cargo initiatives through four established work groups, making plans
    for future collaboration, leveraging of existing programs, and sharing
    resources and technologies.
        Within the $85 million requested for air cargo screening in fiscal
    year 2005, TSA is requesting $55 million for an aggressive R&D program
    to investigate technologies that will improve our ability to screen
    physically high-risk air cargo. TSA will look at new technologies for
    screening large cargo, including pallets and containerized cargo. In
    January 2004, TSA issued a market survey requesting submissions and
    participation of vendors of commercial off-the-shelf explosives
    detection technology to support cargo inspection. A number of vendors
    have been tentatively selected for laboratory evaluation of their
    products against the current EDS certification criteria. We have issued
    a request for proposals (RFP) for potential inventors of explosives
    detection technology for the screening of containerized cargo and U.S.
    Mail to be transported on passenger aircraft. This RFP will lead to the
    award of R&D grants to assist in the development of promising
    technologies. At TSL, we are conducting a cargo characterization study
    to determine the feasibility of using currently deployed explosives
    detection technology (EDS and ETD) to screen cargo while new systems
    are under development.
    Enhancing Surface Transportation Security Through Intelligence,
            Stakeholder Outreach, and Integration
        For modes of transportation other than aviation, TSA is developing
    policies and programs to ensure proper coordination, integration, and
    information exchange among our Federal, state, and local partners in
    non-aviation modes of transportation and to unite disparate
    transportation systems under a single security strategy. Our goal in
    this regard is to ensure that efforts to provide security in non-
    aviation modes are consistent, coordinated, and effective. As part of
    this effort, DHS will issue a National Transportation System Security
    Plan as part of its overall Critical Infrastructure Protection Plan,
    which is currently under development. We are providing Departmental
    leadership and guidance in this area, particularly with respect to
    modal security plans, to ensure that they are integrated into an
    effective concept of operations for management of the transportation
    sector's security. TSA's fiscal year 2005 request includes $24 million
    for personnel and operational resources dedicated to security in non-
    aviation transportation modes and $17 million to support TSA's around-
    the-clock TSCC, the same funding level as this year. The complex,
    interdependent land transportation environment is especially
    challenging. TSA will continue to assess the risk of terrorist attacks
    on non-aviation transportation modes, assess the need for standards and
    procedures to address those risks, and ensure compliance with
    established regulations and policies.
        This completes our highlights of key programs and initiatives for
    fiscal year 2005.
        TSA has achieved an unqualified audit opinion for fiscal year 2003,
    its third consecutive clean audit. In fiscal year 2004, TSA is striving
    to maintain its clean audit record and correct any internal control
    weaknesses noted in audit reports. With passenger and baggage screening
    rollouts complete and the transition to DHS behind us, TSA is well
    poised to continue implementing more efficient and effective financial
    management processes across the organization.
        In closing, I want to convey how proud I am of TSA's security
    screening workforce. They have carried out their responsibilities with
    diligence and professionalism in a dynamic environment. The reality of
    TSA's mission is that we must constantly be prepared to provide the
    best level of security we can within the resources we have been
    provided. The increased variety and sophistication of weapons and
    communication tools available to modern terrorists presents a
    significant challenge. We have seen all too vividly that successful
    terrorist attacks can disrupt the United States and global economies.
    With security strengthened and economic recovery underway, it is
    imperative that TSA accommodate expected growth in air travel in the
    years ahead. With preventive measures in place, the risk of terrorism
    is reduced, not eliminated. TSA will continue to identify and
    reevaluate threats and vulnerabilities and make decisions that both
    facilitate transportation and improve its security.
        I will be pleased to answer your questions.

        Senator Cochran. Before proceeding to questions, I am happy
    to yield to other Senators for any other opening statements
    they may have.
        Senator Byrd. Senator Murray.

                      STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you very much, Mr. Chairman. I join in
    welcoming our two witnesses today. Two weeks ago, when
    Undersecretary Hutchinson testified before this Subcommittee, I
    stressed my concern that too many of the Department's efforts
    to secure the homeland rely on paper exercises, such as studies
    and certifications, rather than on the layered defense that the
    President and the Secretary often describe in their homeland
    security speeches.
        Both the Coast Guard and the Transportation Security
    Administration are on the front line of homeland defense, and I
    commend both of your organizations for your dedication to your
    missions. Regrettably, the President does not seek sufficient
    resources for either the Coast Guard or the Transportation
    Security Administration.
        According to your own testimony, Admiral Collins, Coast
    Guard assets, the ships, the planes, the helicopters that you
    rely on to protect Americans are failing at an alarming rate.
    In fact, you indicate that the Coast Guard assets are in a
    ``declining readiness spiral'', and yet, according to the
    President's budget, the Coast Guard Deepwater program for
    upgrading and replacing those assets will take 22 years to
    complete. Twenty-two years. This is 2 years slower than the
    capital improvement program envisioned when Deepwater was
    conceived prior to the tragic events of September 11.
        I am also concerned that while you have increased mission
    hours for homeland security by 113 percent since 9/11, an
    increase that I fully support, your non-homeland security
    efforts, such as search and rescue, and fisheries enforcement
    have fallen by 26 percent.
        Admiral Stone, when Undersecretary Hutchinson testified
    before this Subcommittee, I said to him that I was concerned
    with the level of funding dedicated to non-aviation modes of
    transportation, such as rail security, bus security, port
    security. I questioned why the President was seeking no funding
    for securing our mass transit systems and was proposing a 62
    percent cut in port security grants.
        I stressed my objections to the Department's plan to shift
    responsibility for these programs out of TSA. I questioned why
    it was that the President's budget for the Transportation
    Security Administration was 97.3 percent for aviation security
    and 2.7 percent for security for other modes of transportation,
    such as rail security.
        I questioned the wisdom of putting too much of a focus on
    responding to the last terrorist attack and not preparing for a
    different kind of attack in the future, a future that may not
    be far away.
        Since that hearing, terrorists have struck again. This
    time, the terrorists killed over 200 innocent passengers on a
    commuter train in Madrid, Spain. Following the attack in
    Madrid, according to The Washington Post, the Department
    released a law enforcement advisory warning about the terrorist
    threat to our rail system here in America. It is saddening that
    it took another terrorist attack for the Administration to wake
    up to this threat.
        In January of 2003, I offered an amendment to provide $300
    million to State and local governments for securing mass
    transit systems. The White House opposed the amendment, and it
    was defeated. In April of 2003, I offered an amendment to add
    $50 million for this purpose. Once again, it was defeated.
        Being a persistent kind of fellow who comes from the mud
    hills and the clay hills of southern West Virginia, I offered
    another amendment for $57 million last July. Once again, the
    White House called the amendment wasteful spending, and the
    amendment was defeated.
        Over 14 million people travel by rail every day in this
    country, many more than travel by air. This is a glaring
    vulnerability. While I am not suggesting that we should
    establish a rail passenger screening system like the system we
    have at our airports, we clearly can do more to help our rail
    systems install chemical sensors, increase law enforcement
    presence, and improve public awareness.
        Frankly, Admiral Stone, Secretary Ridge's statement
    yesterday that we will use existing resources to do more long-
    term research on technological solutions, share information,
    and distribute information on best practices just does not make
    the grade with me.
        The President is proposing to cut law enforcement grant
    programs by $732 million, including elimination of the COP's
    hiring program, and is also proposing to cut first responder
    funding by $733 million. He is proposing to cut Amtrak by $318
    million. Where, where, oh, where are State and local
    governments and Amtrak supposed to get the money to actually
    increase law enforcement at our train stations and on our
    trains?
        By any definition, the threat to U.S. citizens using our
    rail systems is imminent. Imminent. Not 10 years away. Not 25
    years away, but now. We need a clear plan that takes immediate
    steps to make our people safer. The approach announced by
    Secretary Ridge yesterday might make rail passengers safer in
    2024, just about the time that the Coast Guard finishes buying
    their ships and planes. Our citizens have a right to expect
    their government to respond when they are threatened. We should
    do more. We should do more. We should do more, and we should do
    it now. Thank you.
        Senator Cochran. Senator Murray.

                       STATEMENT OF SENATOR PATTY MURRAY

        Senator Murray. Thank you, Mr. Chairman.
        Admiral Collins and Admiral Stone, I want to join my
    colleagues in welcoming you. Today, you have a tremendous task
    before you, and I really want to thank you for your service.
    Both of your organizations have done a tremendous job, with
    limited resources, and what I believe is a lack of support from
    the White House in terms of securing our Nation's ports and
    cargo terminals. You should both be applauded for your efforts
    in addressing the security issues facing our country today.
        However, I remain concerned that the President's budget
    request does not go far enough to provide you with the funding
    and the tools necessary to get the job done. I often question
    whether we are giving you the resources to help you work
    smarter, or simply asking you to work harder. We need a
    coordinated plan for a nationwide port security regime, but it
    seems that despite your best efforts, securing our Nation's
    ports and cargo terminals is a back burner issue, something
    that, according to Secretary Ridge, the private sector should
    figure out.
        I am really concerned that the President's budget request,
    which would place 90 percent of the Administration's so-called
    Port Security Program under the Coast Guard, will take even
    more attention away from the Coast Guard's other missions.
        Admiral Collins, I am interested to hear how the Deepwater
    and the response boat programs, the programs that provide our
    men and women of the Coast Guard with the platforms they need,
    would progress within the President's budget numbers. And I am
    particularly interested in the status of the response boat
    small contract, which has already been awarded, as well as the
    status of the response boat medium contract, which is supposed
    to be awarded this year.
        We need to make sure that the Coast Guard has the ability
    to modernize its vessel and aircraft fleet, and I look forward
    to working with Admiral Collins and the rest of my colleagues
    to ensure that we fund these priorities responsibly.
        Admiral Stone, I'm interested in your perspective on the
    relationship between TSA, Customs, and the Coast Guard, more
    specifically, how this budget would help provide you with the
    tools to achieve a truly coordinated approach to protect our
    port facilities.
        I am concerned with reports about the lack of coordination
    within the Department of Homeland Security. It seems that TSA
    and Customs are merely coexisting within the cargo security
    area. Last week, I participated in an event celebrating the
    arrival of the first operations safe commerce container into
    the United States, and that is a TSA program. Unfortunately,
    instead of actively participating in this program, designed to
    test technologies, and prove best practices for private sector
    supply chain security, Customs is moving forward with RFPs for
    container security devices, without regard for the work already
    in progress in the TSA.
        So as I said earlier, we need to help you work smarter, not
    just harder. We need a coordinated port security regime to
    ensure the safe, efficient transport of cargo into the United
    States, as well as protecting people who live and work near our
    ports. It has to be a priority for this government.
        So Mr. Chairman, I will have more specific questions for
    our witnesses during the question and answer period. I thank
    both of you for being here today.
        Senator Reid. Mr. Chairman.
        Senator Cochran. The Senator from Nevada, Mr. Reid.
        Senator Reid. I am not a member of the Subcommittee, but I
    am, of course--I have a very short statement, and I would ask
    permission of the Chair to be allowed to----
        Senator Cochran. You may proceed, Senator.

                        STATEMENT OF SENATOR HARRY REID

        Senator Reid. Thank you very much, Mr. Chairman. Mr.
    Chairman, and especially members of the Subcommittee, Admiral,
    I have appreciated very much working with you. As you are
    aware, McCarran International Airport is the second, only to
    the Los Angeles International Airport, in the number of
    passengers that come through its security checkpoints. Only LA
    International has more people coming. You can go to Atlanta,
    and there are more people in the airport, but they are not
    leaving the airport, while in Las Vegas, they get out and then
    come back.
        This arises, of course, as I have indicated, because
    McCarran is a destination airport, unlike other large airports
    that serve as hubs, where passengers simply connect to another
    flight. I have been concerned, as you know, about the delays in
    TSA's screening of passengers at McCarran, which may cause harm
    to the economy in the Las Vegas region. But also we are
    concerned for what it does to not only Las Vegas, but points
    north, west, south, and east of there.
        This frustrates passengers, makes Las Vegas, by some, a
    less attractive choice for discretionary travel. These delays
    arise because of the lack of an adequate number of screening
    lanes at McCarran, as well as TSA security rules and procedures
    that were not optimized for McCarran Airport.
        To address these delays, there are more screening lanes
    being built into McCarran, and I think we can count on TSA to
    adequately staff them. In addition, and I appreciate this very
    much, TSA instituted a pilot program at McCarran to optimize
    screening rules and regulations during periods of heavy
    passenger flow, while maintaining the highest levels of
    passenger security and safety.
        It is my understanding that delays at McCarran have been
    reduced to 30 minutes, on average, in recent weeks, and that is
    good, because it was up to 3 hours on some occasions. Credit
    does go to TSA and your able Federal security director in Las
    Vegas, Jim Blair, who is always available to answer questions
    and be most helpful in many regards.
        So I want to thank you personally for your efforts. And I
    would like to ask how you think this pilot program is working
    from a TSA perspective and whether you have plans to expand its
    application to other airports. You do not need to answer that
    now. You can do that in writing to me, if you would, please.

                         AVIATION SECURITY CAPITAL FUND

        There is another issue that I would like to touch on. The
    FAA bill passed by Congress last year mandates that 90 percent
    of the cost of in-line screening systems at large airports were
    to be paid by the Federal Government through the Aviation
    Security Capital Fund. The language was definitely retroactive
    to large airports that had already received letters of intent
    for in-line screening systems. This was an increase from 75
    percent to 90 percent, and for McCarran, represents almost $19
    million. I note in TSA's fiscal year 2005 budget request for a
    Federal share of only 75 percent of these projects. This
    clearly was not the intent of Congress.
        So, again, I would ask, with the permission of the
    Chairman, that you respond to this in writing to all the
    committee at your earliest possible date. Is the Federal share
    cost 75 percent or 90 percent? By law, it is 90 percent. We
    want to make sure that you live by that.
        I would also ask, Chairman Cochran, if you would allow me
    to submit a question in writing and ask the panelists to
    respond to this at their earliest possible date.
        Senator Cochran. The Senator has that right, and we will be
    glad to make that a part of the hearing record.
        Senator Reid. Thank you very much.
        Senator Cochran. We would request the witnesses to respond
    in a timely fashion.

      IMPACT OF DETERIORATING SHIPS, COAST GUARD CUTTERS, HELICOPTERS AND
         OTHER ASSETS ON COAST GUARD'S ABILITY TO CARRYOUT ITS MISSIONS

        Senator Cochran. Admiral Collins, I notice that you start
    off in your statement talking about the concerns you have about
    the deterioration of your ships, Coast Guard cutters,
    helicopters, and other assets that you need to carry out your
    missions and fulfill your responsibilities as part of the
    Department of Homeland Security, and also contributing to our
    Nation's defense. I know you have forces that have been
    deployed to the Persian Gulf region, and you also recently were
    called upon to deploy assets to Haiti, to the area, and to the
    approaches to South Florida, because of the activities in
    Haiti.
        Could you tell us to what extent this puts strain on the
    overall responsibility you have for other activities in
    maritime homeland security and marine safety? Were you able to
    maintain your vigilance here in the homeland area to carry out
    these missions as well?
        Admiral Collins. Mr. Chairman, I will be glad to answer
    that. I know that is clearly a concern of Senator Murray's as
    well, based on her opening comments and previous hearings, is
    how we balance across our missions when we have these surge
    operations.
        The good story is, we have the capacity to serve in the
    national interests for high-risk events on a temporary basis
    and surge back to normal lay-down of resources. I think that is
    a strength that we as a Service have because of our multi-
    mission character and our flexibility. So that is a good-news
    story.
        The question is: How do we continue to service all those
    other missions as we surge to an orange alert condition, or a
    Haiti, and so forth? I think there are a couple of answers to
    that. One is we seek growth of our asset base where warranted.
    And as I mentioned in my opening statement, we have realized a
    51 percent increase in our operating expense budget, and we
    have added additional capacity to our force structure.
        If you look a the total number of hours available for
    boats, cutters, and so forth, in 2003, they increased over 39
    percent; and through 2005, there will be a net 68 percent
    increase in the total number of boats, aircraft, and ship hours
    available. And that is because additional resources have been
    added. So that is the good story.
        We still have OPTEMPO challenges and shortfalls and gaps to
    meet everything, to be 100 percent everywhere at one time, and
    we are not there yet.
        But I would have to note that our performance goals
    continue to be met across our missions. Let me just give you a
    couple of data points. Despite some pressures in the past year,
    orange alert and other conditions, we still maintain our SAR
    readiness posture, and met all our search and rescue standards.
    We saved 87.7 percent of mariners in distress, and our
    performance goal is 85 percent.
        We achieved a 97.1 percent compliance rate with fisheries
    enforcement. Our goal is 97 percent. We have reduced the 5 year
    average of collisions and groundings to a little over 1,500.
    Our goal is a little over 2,100, and so forth. The point I am
    making is that we have ensured we are meeting the highest risk
    and attending to our performance goals, even despite these
    pressures.
        Senator Cochran. I want to commend you for the service you
    are providing, and I think the evidence that you gave us in
    your statement about the seizure of cocaine on the West Coast
    is an example of your capability to continue to function at a
    high level of readiness and competence to help protect us from
    the ravages of the drug trade.

     INTERDICTION AND SEIZURE OF ASSETS OF DRUG SMUGGLERS ON THE HIGH SEAS
                OFF THE COAST OF SOUTH AMERICA AND THE CARIBBEAN

        To what extent is the Coast Guard deploying assets in the
    region where the cocaine coming from? Are you able to interdict
    and seize assets of the drug smugglers on the high seas off the
    coast of South America or in the Caribbean?
        Admiral Collins. That is where most of our assets are
    provided to, or are deployed to Joint Interagency Task Force
    South, out of Key West, which is a DOD joint command capably
    lead by a Coast Guard flag officer, I might add. But a joint
    command that targets and deploys a multiplicity of assets,
    Coast Guard and others, puts metal on target, if you will,
    based on Intel.
        Most of the assets, all the CD assets almost exclusively,
    that we field, are allocated to Joint Interagency Task Force
    South for further deployment. And when we actually make the
    interdiction, then we take Operation Control back and do the
    boarding, do the arrest, and the seizure, and so forth. But we
    are primarily down in the deep Caribbean. That is where the
    greatest success is, off the West Coast of Colombia, off the
    north coast of Colombia, as far west and south as the Galupa
    Coast, and all the way up to the Gulf of Tijuanapeck, coming
    into the Mexico-Guatemalan border. And that is where we have
    had a lot of very, very good success, based on ever-increasing
    use of Intel, Intel-queued actions. And that is why the Midget
    was successful with 27,000 pounds of cocaine in three seizures
    coming back this week.
        So I think the interagency and the lay-down of forces has
    been getting better and better as we have learned more about
    this risk, about this threat.
        Senator Cochran. But it seems strong evidence of the
    success of interagency cooperation and another reason why the
    Department of Homeland Security was a step in the right
    direction to help protect the security and safety of the
    citizens of the United States from drugs, as well as from other
    acts of terror.

        SCHEDULE OF NEEDS FOR DEEPWATER AND REFURBISHING OF HELICOPTERS

        What can you tell us about the schedule that you would like
    to see us fund, as far as your Deepwater modernization effort
    and the refurbishing of helicopters that you say are now
    dangerous to operate and have caused safety problems out in the
    fleet?
        Admiral Collins. Clearly, the 2005 budget gives us a
    healthy funding profile, consistent with the plus-up that this
    subcommittee, and others in Congress provided last year, in
    2004. So we have a $678 million level, and that continues to
    pursue the larger components of the Deepwater. So I think in
    2005, the President's request will keep us on that momentum. It
    is about a 22-year time frame. My biggest concern is how we
    deal in the out-years, the total length of this project, as I
    am faced with deteriorating readiness, and that is the issue,
    Mr. Chairman.
        We are running our assets hard in the national interest.
    They are failing. They are failing at a sharper rate than we
    first projected when the project was shaped and designed. And
    so over the next several years, I am forced to make a tradeoff
    between fixing the existing system versus putting that same
    money into the replacement of those systems, and to keep
    current readiness, today's readiness live and well. I have no
    choice. I have to invest in those legacy systems to keep them
    going; and as we push out the modernization, it complicates
    that equation.
        So that is that downward spiral phenomena; and as you
    mentioned, it is particularly problematic, for the engine
    system and the HH-65 are key assets for us. And we have had to
    aggressively make decisions about re-engineering that platform
    and invest in the legacy systems to keep that readiness where
    it should be.
        Senator Cochran. Well, I am confident this committee is
    going to respond and provide the funds you need to move
    aggressively to restore the capability of these assets and
    build new systems for the future. We are just going to have to
    do it. I do not think we have any choice.

                     EFFECTIVENESS OF THE SCREENING PROCESS

        Admiral Stone, I know we are all concerned about the
    effectiveness of the screening processes we have in trying to
    help ensure the protection of the traveling public here in our
    homeland. The airports and airlines have received the greatest
    amount of attention. To what extent are you confident that the
    procedures you have in place and the systems that you have
    developed and are using now to protect the flying public, those
    using our airlines and airports, are succeeding?
        Admiral Stone. Senator, I am very confident that the layers
    of security that we have in place today are continuously
    improving, whether it is the growing size of our flight deck
    officer cadre of personnel that we have that we train each
    week, and graduate out of Artesia. In addition, our screening
    covert testing results indicate continuous improvement. And in
    a classified forum, we are keen to share that data, because we
    see progress being made as a result of our investment in
    training.
        We also have online now what is called TIP, the Threat
    Image Projection system, which is a file of about 2,400 images.
    And we can now go and see each individual screener, how they
    are doing. They have to punch in their pass code when they go
    up to the X-ray machine, and so we can pull up now, San
    Francisco-LAX, see what images in that file that are missed the
    most.
        So it also gives us an idea of where to refocus the
    training. It gives us a percentage of hits that the screener
    got on the image that came up. So this Threat Image Projection
    really allows us to now measure the individual screener
    performance, which is a very significant capability for us, and
    when combined with the covert testing results, allows us to
    better get our arms around the performance of our screener and
    gives us metrics in which to judge not only the screener but
    then the airport, and then trends throughout the country.
        So we are very excited about now having TIP online, about
    the improved scores on covert testing, and about the additional
    FFDOs going out each week out into the field. And so across the
    board on these layers, we see continuous improvement.

       LEVEL OF ATTENTION TO THE LIKELIHOOD OF THREATS TO OTHER MODES OF
                                 TRANSPORTATION

        Senator Cochran. There are, of course, other threats that
    we are aware. To the extent to which your intelligence shows
    the likelihood of threats to other modes of transportation, how
    would you assess that in terms of threat level? Are there other
    modes of transportation that you consider likely targets of
    terrorists that have your acute attention?
        Admiral Stone. Yes, sir. In December, we started intermodal
    operations Intel briefings. So each day now for an hour and a
    half, we spend our time, the senior leadership is, on
    intelligence and operations. I will just note that I have been
    tracking to find where we are spending our time at the TSA
    headquarters, in terms of meetings.
        And over half of our time is spent on operations,
    intermodal operations and intelligence, which is very pleasing
    to me, because I want the focus of our headquarter's effort to
    be on operations and Intel and connecting the dots in an
    intermodal setting, so at that morning operations intelligence
    briefing, we look at a whole range of threats, whether they be
    the input that we get from the Coast Guard, from the maritime
    perspective; or whether it be from our stakeholders in the land
    area.
        I will note that in December, one of the first people that
    I was introduced to and a briefing was set up with, was Mr. Ed
    Hamburger, the President of the American Association of
    Railroads; followed by Bill Milar, for public transit
    authorities; and Richard White, from the Washington Metro.
    These individuals I was able to meet in December, because of
    the importance, that right off the bat, I have an opportunity
    to understand from their perspective what their challenges
    were.
        So this operations Intel assessment that we have each day
    in which we review the intelligence for all intermodal
    operations, I think is reflective of our focus and a sense of
    urgency that we understand and are communicating with the field
    in all of these areas.
        I would say after the aviation threat, which our
    intelligence indicates the Al Qaeda interest in being able to
    use an aircraft as a weapon remains very high, that we are well
    aware that whether it be at our ports or at various land
    targets, that we have an intermodal responsibility at TSA to
    monitor those threats and then take appropriate action in
    coordination with other agencies.
        Senator Cochran. Before recognizing other senators for
    questions, I have noticed the presence of the distinguished
    Chairman of the full committee, Senator Stevens. Do you have
    any opening statement, Senator? We would be happy to have you
    do that.

                        STATEMENT OF SENATOR TED STEVENS

        Senator Stevens. As a matter of fact, Senator, I wish you
    would just enter my questions for the record and let me make
    one short comment.
        Admiral Collins, Admiral Stone, I do want to thank you for
    your recognition of the problems of Alaska. I note that we have
    an increase in the budget for $102 million for the Maritime
    Transportation Security Act of 2002. Of that amount, with half
    the coastline of the United States, $152,000 is going to be
    spent in Alaska to implement the Maritime Transportation
    Security Act of 2002.
        I am conscious of what you are doing, and I want to thank
    you for what you are doing, testing the Predator A at King
    Salmon and Predator B at Shimya. If those are capable
    technologies, they could probably be substituted for vessels
    and save the taxpayers of the United States a great deal of
    money, but at the same time have knowledge of what is going on
    along that enormous ocean border of ours.
        You have agreed to work with our people on maritime safety
    education. I thank you for that, because we are still losing a
    considerable number of our vessels, despite everything we have
    tried. And the cold water immersion education and the outreach
    to the people who are out there without any chance of rescue
    really is very important.
        I thank you also for transferring the cutter, Long Island,
    to Valdez, for its homeland security missions. We have come a
    long way, and I know you have a tremendous job. I am pleased to
    see that there is an increase for the Coast Guard's budget, a
    total of $7.5 billion, an increase of $490 million this year.
    And I want to join all of you gentlemen in supporting that. I
    wish it was more. Thank you very much.
        Senator Cochran. Thank you, Senator.
        Senator Byrd.

                 PROPOSED MOVEMENT OF GRANT MONEY FROM TSAT-ODP

        Senator Byrd. On January 26th, Secretary Ridge announced
    his intention to consolidate a number of grant programs within
    the Offices of State and Local Government, Coordination and
    Preparedness. On February 25, Representative Sabo and I wrote,
    detailing our objections to moving TSA grants, such as port,
    rail, and bus security from TSA, as well as the emergency
    management grants from FEMA. House Homeland Security
    Appropriations Subcommittee Chairman Rogers sent a similar
    letter expressing his concern about moving the TSA grants.
        I reiterated my objections during our hearings with
    Secretary Ridge and Undersecretary Hutchinson, and I remain
    strongly concerned that moving the funds from TSA will result
    in a reduction of focus from your agency and the Department on
    non-aviation modes of transportation.
        That would be in direct contravention of the intent of
    Congress when it passed the Aviation and Transportation
    Security Act in November of 2001. That Act gives TSA the
    responsibility for security over all modes of transportation.
    Clearly, the Madrid train bombing should be a wake-up call to
    the need for TSA to focus on non-aviation security risks.
        Just 10 days ago, The Washington Post quoted from the
    Homeland Security Advisory, saying, ``Trains and rail stations
    remain potential targets for terrorist groups due to their
    reduced security in comparison to airports.'' That is a very
    significant statement. Let me read it again, this excerpt from
    The Washington Post, just 10 days ago, ``Trains and rail
    stations,'' that would include Amtrak, that would include MARC,
    ``Trains and rail stations remain potential targets for
    terrorist groups due to their reduced security in comparison to
    airports.''
        America is clearly at risk of a terrorist attack to our
    rail and mass transit systems, our seaports, and other non-
    aviation modes of transportation.
        Now, given the existing threat and the strong concerns that
    have been raised by members of Congress, are you reconsidering
    the proposed movement of these grants from TSA?
        Admiral Stone. Senator Byrd, I fully share and understand
    the sobering impact of Madrid and Moscow and what that means in
    terms of us being required to have a true sense of urgency
    about how we address these issues. The decision to move those
    responsibilities, in terms of the funding being consolidated at
    ODP, has been made very clear to us by the Department that the
    subject matter experts, of which TSA relies heavily on to
    ensure how the assessments are done and where that money goes,
    and our ability, therefore, to impact those decisions, will be
    maintained and that the subject matter experts will be part of
    the TSA workforce and that we will then be able to interface
    with ODP to ensure the proper decisions are made.
        Senator Byrd. I am trying to understand as to whether or
    not my question was answered. Are you saying you are
    reconsidering, or you are not?
        Admiral Stone. No, sir, we have received information from
    the Department that the subject matter experts that make those
    decisions on those monies will remain at the TSA; however,
    those monies will go to ODP, along with some staff that will
    administer those accounts. But that the decision to ensure that
    the people that are transferred to the ODP do not impact on our
    critical ability to be able to manage and assess those areas
    that those grants apply to.

                           UNOBLIGATED GRANTS FUNDING

        Senator Byrd. The fiscal year 2004 Homeland Security Act
    was signed into law on October 1, 2003; yet, in the intervening
    6 months, TSA has yet to obligate the $22 million that Congress
    appropriated for trucking industry grants, the $17 million
    Congress provided for Operation Safe Commerce, the $10 million
    Congress provided for bus security grants, the $7 million
    Congress provided for hazardous material grants, the $4 million
    Congress provided for nuclear detection and monitoring.
    Additionally, $50 million still remains unobligated from the
    funds Congress provided for port security grants.
        We are halfway through the fiscal year. Congress acted
    expeditiously to provide the Department with the funds and the
    flexibility to address real and pressing homeland security
    requirements. We have been at Code Orange 2 times since August.
        You work for the Department of Homeland Security. Explain
    why this business-as-usual and go-slow approach to your job is
    satisfactory.
        Admiral Stone. Senator, the approach of the Department with
    regard to the threat that we face has been, I believe, one that
    is reflective of a sense of understanding of the threat and an
    urgent need to ensure that operationally we are responding to
    that. The actual particulars on those individuals' monies and
    the time lines for how those are being distributed, I would
    like to get back to you, sir, for the record on that.
        Senator Byrd. Well now, what do you mean by what you just
    said, that you would like to get back for the record. What does
    that mean?
        Admiral Stone. I would like to make sure that I give you an
    answer on those each individual monies and what the time line
    is for them to be going out to the field.
        Senator Byrd. Very well. Now, you will do that for the
    record?
        Admiral Stone. Yes, sir.
        Senator Byrd. Mr. Chairman, what does that mean for us?
    Will we see the record on that before we mark up?
        Senator Cochran. Mr. Chairman, I am happy to join you in
    the request that the witness submit an answer to you directly,
    and we will also have a copy that will be printed in the record
    of the Committee's proceedings.

                                CAPPS II SYSTEM

        Senator Byrd. Very well. One of the concerns about the
    testing of the proposed CAPPS II system has been the lack of
    access to actual traveler data to test the system. Airlines
    have been reluctant to voluntarily provide data because of the
    very real concerns of privacy groups about how that data will
    be used. There is some speculation that the Department is
    planning to issue regulations to compel airlines to provide
    data for the purposes of testing.
        Can you confirm for the Subcommittee whether the Department
    is planning to compel airlines to provide data on travelers for
    the purposes of testing CAPPS II?
        Admiral Stone. Our plan right now, Senator, is to ensure
    that we meet all of the requirements that have been identified
    both by us and by other entities, such as the GAO, regarding
    privacy, oversight, and redress, and that currently is the
    focus of our effort. We have recently hired this past week a
    privacy officer for TSA. We have had a TSA nationwide privacy
    education week in order to ensure that the core beliefs of our
    agency are, indeed, shared throughout all of our employees.
        Our intent is to ensure that once the privacy redress and
    oversight measures are taken that we then work with the
    Department on ensuring that a notice of proposed rule-making is
    drafted and sent to the Department for review. And then
    following that would be our recommendation, our intent, once
    that notification goes out, so that the airlines and passengers
    know what would be forthcoming, then to move forward with a
    security directive for testing. So that would be the TSA
    intent, that sort of a process, through the Department.
        Senator Byrd. Of the funds requested for this program in
    the fiscal year 2005 budget request, what is requested solely
    for additional testing of the program, as opposed to
    implementation and operation of the system?
        Admiral Stone. For the funds that are proposed for fiscal
    year 2005 for the $60 million, the actual breakdown of what is
    for testing and what is for the actual operation of those
    airlines that have actually transitioned to the operational
    CAPPS II program, I would have to get that number exactly for
    you, sir, and I will do so.

                    REWARDING OF DEEPWATER PRIME CONTRACTOR

        Senator Byrd. Very well. Admiral Collins, the Coast Guard's
    Deepwater program is a multi-billion dollar effort to modernize
    and replace its aging ships, aircraft, and communications
    systems. According to a recent report by the GAO, the Coast
    Guard does not have the capability to assess the performance of
    the program, and yet the Coast Guard awarded the prime
    contractors with a $4 million bonus for work accomplished in
    the first year of the contract.
        I am concerned that the Coast Guard is rewarding the prime
    contractor without first knowing if they are doing a good job.
    For instance, the very first Deepwater asset to be delivered,
    the 123-foot cutter, was delayed by 4 months. GAO reports that
    the schedule for the maritime patrol aircraft has slipped as
    well. Should we be rewarding this kind of performance with
    bonuses to the contractor?
        Admiral Collins. Currently, Senator, the GAO reviewed a lot
    of our management processes and procedures, and clearly, the
    focus on how we do award fees and how we deal with the systems
    integrated was part of that review, how we assess their
    performance and recognize their performance. We welcome those
    comments, obviously, from the GAO, and we are interested in
    continuing to refine our processes.
        We are addressing the processes for evaluating the
    contractor's performance. We did, in fact, evaluate five
    specific areas of performance during the first term. We
    followed very, very strict adherence to the Federal Acquisition
    Regulations. It was an overriding principle in this review.
        The contractor award fee score is, I would submit, much
    lower than typical industry and integrator's averages, if you
    look at averages for other type of contracts. We are confident
    that the award fee level was fair and represented an accurate
    assessment of the contractor's performance.
        Is there room for enhanced performance of both us and the
    contractor on this very, very complex project? Absolutely. We
    are working very, very hard to improve that performance, but I
    think in this particular case, it was done based upon a set of
    criteria. It was done fairly. It was done accurately. We had
    objective measures that were introduced into this awards fee
    process. We have a performance measurement plan. We have a
    balanced scorecard and all the other mechanisms that you use in
    this kind of thing. And we will continue to refine it, review
    it, assess it, and make it better as we go forward.
        Senator Byrd. Well, that is all well and good, but I think
    we--as you said, you can do better, and we should do better. I
    think we ought to take the GAO report seriously. This is an arm
    of the Congress. We are going to believe our agency, and we are
    going to expect better from you. So please be aware of this,
    and let us do better than this. This is the people's money.
    Your money. My money.
        Admiral Collins. Yes, sir.
        Senator Byrd. Their money. So try to do better. I have
    further questions. I will await my turn in the next round.
        Senator Cochran. Thank you, Senator.
        Senator Inouye.
        Senator Inouye. Thank you, Mr. Chairman.

             INCREASED REQUIREMENT FOR AIRLIFT CAPACITY SINCE 9/11

        The mission of the Coast Guard has expanded immensely since
    9/11. And since that time, thirteen maritime safety and
    security teams and eight port security units have been
    deployed. With these changes, has there been an increased
    requirement for airlift capacity?
        Admiral Collins. Yes, Senator, there is, and as you know,
    the Deepwater solution that was initially designed. And, of
    course, that is a 1998 requirement that the contractor's design
    to and bid on, in post-9/11. I think there is a re-evaluation
    needed to the strategic lift aspect that is embedded in our
    Deepwater solution.
        And we currently have a team looking at a revised baseline,
    performance baseline, for our fixed-wing fleet mix to service
    the lift requirement, because what is different in post-9/11 is
    that we have these maritime safety and security teams that you
    noted that require a strategic lift capability. We also need a
    move our use-of-force helicopters when we need to. We moved one
    up, incidentally, into Valdez in the last orange condition,
    from Jacksonville. We are moving our strike teams as well, so
    we see strategic lift as a very, very important part of the
    overall aviation and functionality embedded in the Coast Guard
    and for the Department, I might add.
        So we are going to be reviewing that operational baseline,
    Senator, and my expectations are that the C-130 aircraft, in
    particular, will figure materially in the ultimate re-
    baselining of the requirement.

                       HC-130JS COMPARED TO THE HC-130HS

        Senator Inouye. Speaking of the HC-130J, pursuant to the
    fiscal year 2001 allotment, you received six HC-130Js. Now, how
    do they compare with the 130Hs?
        Admiral Collins. They are a wonderful piece of technology,
    Senator. They fly faster. They fly higher. They climb higher.
    They have digitized cockpits. It is the latest technology,
    versus the older technology. We have accepted all six, and we
    had some funding appropriated last year, $60 million, to do the
    engineering development and the missionization of those
    aircraft. By that I mean putting Coast Guard-peculiar sensor
    packages in so that they become true maritime patrol aircraft.
        Right now, they are strategic lift and not maritime patrol
    aircraft. So we are starting that process to put that
    capability in those C-130Js, utilizing that $60 million
    increment as a start.

                         MAKING PACIFIC FLEET ALL 130JS

        Senator Inouye. Would it make sense to make your Pacific
    Fleet all 130Js?
        Admiral Collins. That clearly is in consideration, sir.
    Hopefully, we will have greater clarity on that within a matter
    of a couple of months. Later in the early summer, we will have
    a redefined Fleet mix baseline for Deepwater. And it is going
    to have to look at strategic lift. You know the Pacific better
    than anyone, and you know the long sortie times that are
    required to do our business all through the Western Pacific and
    into the Bering Sea, and in the Southern Pacific, and in all of
    those places.
        So we have to take a very, very hard look at this Fleet mix
    and clearly how we deal with the C-130 Fleet, whether
    modernizing the H models or recommending additional J models
    will be part of that decision process, Senator.
        Senator Inouye. Thank you very much. I have several other
    questions, Mr. Chairman, I would like to submit to the Coast
    Guard, if I may.
        Senator Cochran. Thank you, Senator Inouye.

       BUDGET REQUEST FOR THE PURCHASE AND INSTALLATION OF AN EXPLOSIVE
                                DETECTION SYSTEM

        Senator Inouye. If I may now ask Admiral Stone: The budget
    includes $400 million for the purchase and installation of an
    explosive detection system, the EDS machines. Letters of intent
    have been signed with eight airports, but it is my
    understanding that the $250 million requested for installation
    would only cover continued payment of existing LOIs. How many
    airports are on the list for installation, and under the
    current approach, how long would it take to install in-line EDS
    machines in the remaining airports on your list?
        Admiral Stone. Currently, sir, we have eight LOIs issued to
    cover nine airports, and for fiscal year 2004 and fiscal year
    2005, that is $800 million that has been apportioned for those
    nine airports in support of those eight LOIs. We have another
    list that we have gathered of airports that have requested
    Letters of Intent to cover their capacity and growth needs.
    That list is approximately 30 airports long.
        We are currently meeting with the AAAE and the ACI to find
    out if in fact that list is reflective of indeed those with the
    greatest need. So that list is being refined of outstanding
    airports that require LOIs to ensure it really encompasses the
    airports around the Nation that have the requirement, rather
    than have just those that have submitted the request.
        For instance, Chicago O'Hare is not on the list of airports
    that have an LOI pending. They have not submitted one, so we
    are reaching out with the AAAE and ACI to get that list
    corrected so that it reflects really the needs of the Nation,
    rather than just those who have submitted the LOI request.
        The $1.2 billion that we have in fiscal year 2004 and
    fiscal year 2005, of which $800 million covers the LOI process,
    leaves us about the $400 million to cover those airports that
    need EDSs installed in order to just remain 100 percent
    electronically capable. Thus, the 75/25 split allows us to keep
    those airports at 100 percent electronic. If in fact it was a
    90/10 split, then we have an issue that we will need to address
    regarding retaining compliance in fiscal year 2005.
        [The information follows:]

        We are currently assessing the structure and criteria of a long
    term program, and therefore do not have a cost estimate. Implementing
    EDS in-line systems at all airports is extremely costly and must be
    considered in light of all the other transportation security needs.
    While this multi-year effort progresses, TSA continues to use its LOI
    criteria, based on achieving and maintaining compliance with the 100
    percent electronic screening requirement at all airports, to determine
    where resources will be allocated. TSA is working with airports that
    will not be able to maintain compliance with the 100 percent electronic
    screening requirement because of increased passenger loads, increased
    and/or additional air carrier service, and/or airport terminal
    modifications and expansions. TSA also continues to evaluate situations
    where an in-line solution makes sense from the standpoint of security,
    efficiency, and reduced staffing needs.

        Senator Inouye. If you have to accelerate your program in
    the next 4 years, how much would it cost to cover all the
    airports on your list?
        Admiral Stone. I will have to get you a more concise
    number, but I would say it has been estimated to be somewhere
    in the area of $4 billion to $6 billion to meet the needs of
    those other airports across the Nation that have the LOI
    requirements.

              LIMIT ON FULL-TIME EQUIPMENT, BAGGAGE AND PERSONNEL

        Senator Inouye. At the present time, your agency operates
    on a limit of 45,000 full-time equipment, baggage, and
    personnel, but is this limitation a realistic one?
        Admiral Stone. Currently, we are once again partnering with
    the airports themselves on the issue of capacity, their
    projected capacity for next year and the year after. We have
    reached an agreement with the airports, as well as with the
    ATA, under the United States Civil Aviation Partnership, in
    which we will use a Boeing model. And the ATA, AAAE, ACI, and
    TSA have all agreed to use this model to look at our Nation's
    airports and come up with a figure that we think reflects the
    screening total requirements.
        Under the 45,000 cap that we are currently operating at
    right now, we do not have a clear picture of what that means at
    our Nation's airports because we still have not shaped
    ourselves properly. We still have some airports that are
    smaller airports with too many screeners there, and larger ones
    that have too few. So we need, internally at TSA, to make that
    adjustment here in the coming months to get a real view for
    what 45,000 FTE looks like.
        We are currently hiring screeners at those airports in
    particular that need screeners in order to meet compliance for
    100 percent electronic. We are currently at 43,600 FTE at TSA
    for our screening force. We are hiring up to 45,000, with the
    priority being those airports that need screeners to ensure
    compliance with congressional mandates.
        Senator Inouye. You have been hiring part-time employees
    and screeners. How are they working out?
        Admiral Stone. Currently, approximately 90 percent of our
    screening force is full time, and 10 percent are part-time
    screeners. However, because of our imbalance currently between
    small airports and larger airports, and the fact that we have
    not internally shaped ourselves correctly, what we have found
    out that those part-time screeners are having to work more
    hours than they signed up for. So we are pursuing this as a
    high-priority item to ensure that we get the right numbers at
    the right airports so we can have that efficiency and
    effectiveness that the airports, the airlines, and TSA all
    want.
        Senator Inouye. As you know, I travel quite a bit, going
    back and forth to Hawaii, and I must commend you and your team
    for a good job.
        Admiral Stone. Thank you, Senator.
        Senator Inouye. Thank you very much.
        Mr. Chairman, I have other questions I would like to----
        Senator Cochran. Thank you, Senator. We expect you to be
    able to be able to respond to those in a timely fashion
    directly to the Senator----
        Admiral Stone. Yes, sir.
        Senator Cochran [continuing]. And to this committee.
        Senator Murray.

                      IMBALANCE IN COAST GUARD SINCE 9/11

        Senator Murray. Thank you, Mr. Chairman.
        Admiral Collins, I understand that given the circumstances
    you believe the Coast Guard's mission is balanced responsibly.
    But according to the recent analysis, the Coast Guard mission
    hour analysis, it appears that since September 11th, the Coast
    Guard is spending about 50 percent less time on drug
    interdiction, environmental protection, and marine safety. And
    there have also been drastic reductions in the hours spent on
    search and rescue, aid to navigation, and enforcement of
    fisheries laws and treaties. At the same time, I see on our
    analysis that hours for homeland security has more than
    doubled. I think it is at 1,130 percent.
        I am really concerned that this additional budget pressure
    on you to focus on homeland security just asks the men and
    women under your charge to work harder in other areas. When do
    you see this trend subsiding?
        Admiral Collins. Obviously, if we go to an orange alert and
    there is additional pressure on. If there is an expeditionary
    war effort that is underway and we have additional pressures on
    our ports as we did in Liberty Shield last spring, then that is
    the priority of the Nation, to deal with that high-profile
    risk.
        So those are the kind of surges we have to deal with, and
    we are prepared to deal with them as an organization and still
    maintain an adequate profile to service the key issues, and
    meet the minimum standards across the board.
        I am very pleased that we have met all our search and
    rescue standards. We have met all our search and rescue
    performance goals.
        Senator Murray. I have. I realize that we did well last
    year, but I am really concerned--I want to ask you
    specifically, does this budget request allow you to return to
    your previous emphasis on the non-homeland security missions
    and at the same time do homeland security?
        Admiral Collins. By the end of 2005, compared to pre-9/11
    levels, we will have increased our total aircraft, cutter, and
    boat hours cumulatively by 68 percent from those previous
    levels. That is a growth in those resource hours----
        Senator Murray. That is our homeland security, correct?
        Admiral Collins. That is across--that is the total for
    all----
        Senator Murray. Does that include fisheries, search and
    rescue----
        Admiral Collins. That is everything. The total available,
    the total boat hours, the total aircraft hours, the total ship
    hours available, as compared to pre-9/11 averages, will go up
    by 68 percent. That is a very positive growth. That is
    reflective, as I mentioned earlier, in that our operation
    expense base went up 51 percent. That gives us greater capacity
    to deal with these surges.
        I do not know what is the normal any more, in terms of what
    is the fixed level. I would rather look at whether we are
    attaining performance, meeting the highest risks, meeting all
    our service responsibilities, and search and rescue standards,
    in particular.
        Here is a case in point: Counter-drugs. Counter-drugs, we
    were, last year, just a little bit, a scotch away, it is a
    technical term a scotch away from setting a record on the
    cocaine seized in the maritime, with fewer assets. Although we
    had a surge, the Liberty Shield, orange, and whatever, the
    seizure rate is up. Why? We are getting better about using
    Intel.
        We are partnering with coalition partners. We are using
    technology better, and we are coordinating interagency better.
    And all of those mean enhanced productivity. So there are ways
    to try to accommodate a particular operation tempo, pressures
    that we have, still get the performance the Nation needs.
        I would predict this year, I will go out on a limb, that we
    will seize over a hundred tons of cocaine this year, with less
    resources, because of the effectiveness of our partnering, and
    the use of Intel.
        Senator Murray. And I congratulate you on that, but I am
    particularly concerned about search and rescue, and marine
    safety, and some of the other areas that are out there. And we
    will be watching that very closely.

                             RESPONSE BOAT PROGRAM

        You have already been asked about some of the Deepwater
    programs and your ability to accelerate it. I am really
    concerned about the aging fleet of cutters and aircraft, as
    well as the status of the responsible program, and I appreciate
    your previous response. But could you provide the committee
    with an update regarding the response boat program and tell us
    whether we are on target to receive the 700 RBS vessels that we
    have previously contracted for and what the status of the RBS
    contract is?
        Admiral Collins. I will provide you with the response
    boats, small, if I could provide you a direct response, and I
    will give you a little matrix. It will show the flow of the
    acquisition, the dollars allocated, how many we are buying each
    year. But the short answer is, we are on schedule with it, and
    I will give you a complete breakdown year by year on it.
        Senator Murray. Okay. If you could submit that----
        Admiral Collins. It is a tremendous asset, by the way, and
    we are very, very pleased with that. Safe Boat is being a
    terrific contractor.
        The other issue, the response boat medium, as you know, we
    have three vessels that were designed and built and delivered
    to us. We are running them through their paces, through an
    evaluation process. And we will be prepared to make a down
    select and an award for a low-rate initial production, that is,
    the second quarter fiscal year 2005.
        Senator Murray. So a year from now.
        Admiral Collins. We will be ready to make an award and
    execute those funds that are in the 2005 request.
        Senator Murray. Okay.
        Admiral Collins. It will be six low-rate, initial
    production, boats that we will fund. We are very pleased, by
    the way, with all three candidates that we have. The good story
    is that all three have provided us with high-quality boats, so
    we will have great competition, as a good thing----
        Senator Murray. Good. We will look forward to that.
        Admiral Collins [continuing]. And we will have some good
    products to choose from.

                                 PORT SECURITY

        Senator Murray. Okay. Good. Admiral Stone, as I mentioned
    in my opening statement, port security is really important. For
    me, it is a top priority, and it appears that we still have a
    lot of work to do when it comes to coordinating the Federal
    Government's efforts in this area. Can you help us understand
    how the various port security programs within the Department of
    Homeland Security interact and complement each other, and how
    this budget will help in that effort?
        Admiral Stone. Certainly. The Border and Transportation
    Security, under Under Secretary Hutchinson, both Commissioner
    Bonner and myself, and Admiral Collins' team worked very
    closely with BTS to ensure that we have a coordinated and
    integrated effort.
        For instance, the best practices that will be gleaned from
    Operation Safe Commerce with regard to locks, sensors, GPS
    systems, when they are gathered up, will be coordinated very
    closely with CBP, Commissioner Bonner's team, and also with the
    Coast Guard, to ensure that that sort of integrated approach,
    rather than a stove-piped one, in which those items are just
    taken and then put out as new policies. I think is critical to
    emphasize that we fully intend to take those best practices and
    have that sort of a process.
        Additionally, TSA, in partnership with the Coast Guard and
    CBP, with regard to port security, regularly coordinates the
    results of what the port captain has assessed down at the port
    as being those areas of vulnerabilities and risk to ensure that
    the port grant process reflects those needs. And then those
    monies are then apportioned as a result, in large part due to
    that coordinated effort of what the port captain on the scene
    has evaluated are his needs.
        [The information follows:]

                             Response Boat Program

        The RB-S represents a significant improvement in the Coast
    Guard's operational capability. Multi-Mission Stations, Marine
    Safety Offices, and Maritime Safety and Security Teams use the
    RB-S for a variety of missions. The boat is capable of 45 knots
    and can be armed with two machine guns, making it an ideal port
    security asset. However, its enclosed cabin and excellent sea-
    keeping and maneuverability also lend it to being used on a
    full-range of Coast Guard missions.
        The first RB-S was delivered by Safe Boats International of
    Port Orchard, Washington in May 2002, specifically intended for
    homeland security use. By the end of fiscal year 2004, a total
    of 285 boats will be ordered to enhance the Coast Guard's
    homeland security capability and to recapitalize the Utility
    Boat-Light fleet. To date, 155 boats have been delivered. The
    Coast Guard is also analyzing how many of the 700 boats
    authorized under contract are operationally required for future
    purchases. The following table provides the number of boats
    ordered by fiscal year and the associated funding:

                              [Million of dollars]
    ------------------------------------------------------------------------
                                                Funding for      Number of
                   Fiscal year                     boats       boats ordered
    ------------------------------------------------------------------------
    2005 \1\................................            $8.2              40
    2004....................................            27.0             139
    2003....................................            15.2              84
    2002....................................            10.9              62
    ------------------------------------------------------------------------
    \1\ Based on fiscal year 2005 Budget Request.

        Admiral Stone. The TSA approach on the integrated
    intermodal information system, which is a system that we
    believe from point of shipment to point of destination provides
    visibility on an intermodal level for us to, therefore,
    coordinate with every partner that has to do with the security
    of cargo. And how, wherever that originates in the world and
    wherever it ends up in the United States, is another reflection
    of our intent to ensure that from a transportation sector point
    of view, all of our activities and how we monitor that are an
    integrated effort, fully partnered with the CBP, Coast Guard,
    and other organizations that are involved in monitoring those
    shipments as they enter the United States.
        So across the board, from an intermodal perspective, TSA,
    and I know that it is BPS's view, that that has to be the way
    to head if we are going to really be efficient and effective.
        Senator Murray. Well, as you know, Operation Safe Commerce
    is going to have a report by the end of this fiscal year that
    will detail some of the private sector methodology, best
    practices, and technology solutions. And I will be following
    that closely to make sure that the agencies use that
    information, because I think they have done a really good job
    of putting that together. So I will be working with you on
    that.

    CONTINGENCY PLAN FOR THE FLOW OR COMMERCE DURING AN INCIDENT AT ONE OF
                                   OUR PORTS

        Let me ask you one other question, Admiral Stone, because
    after September 11th, everyone knows we grounded all of our
    aircraft for a number of days and saw devastating impacts on
    the air transportation industry. My state was impacted,
    obviously, with Boeing. All states were. But the shutdown of
    the West Coast ports last summer during the strike offered us
    kind of a glimpse of what would happen if we saw a similar
    shutdown at any of our seaports. That could cost our economy as
    much as a billion dollars a week.
        I would like to know from you what kind of contingency
    planning is happening within the Administration, and
    specifically, who is in charge of an incident and who is in
    charge of making sure the flow of commerce is not impeded
    should we have some kind of incident at one of our ports.
        Admiral Stone. TSA is charged with developing sector-
    specific plans. And then in the area of maritime, for a port
    scenario that you mentioned, the Coast Guard would be lead in
    coordinating that effort from a maritime port point of view.
    But it is TSA's responsibility for the transportation sector to
    develop those plans. That is an ongoing effort with TSA and an
    item of priority as well as the daily coordination with the
    Coast Guard and other----
        Senator Murray. Are those contingency plans developed now,
    should something occur in one of our ports?
        Admiral Stone. The sector-specific plans are still a work
    in progress, and so the real-world events would be coordinated
    by TSA, much like we did during the last threat level orange
    when we had flights of interest, our coordination with the
    Department of Transportation on that was daily and immediate,
    via real-time communications on flights of interest. It would
    be our intent to do similarly in a real-world operation with
    the Coast Guard.
        Senator Murray. Admiral Collins.
        Admiral Collins. As you know, Senator, there is a family of
    planes that is required to be built as part of the MTSA.
        Senator Murray. Right.
        Admiral Collins. We are reviewing thousands, literally
    thousands of those for vessels and facilities, and those
    vessels and facilities. And there are overarching port security
    plans for each port, so over 40 of these. They are done
    collaboratively with the Area Maritime Security Committee.
        We are all major stakeholders in the port to provide an
    overarching plan to respond to contingencies and deal with
    security issues, not unlike the Oil Pollution Act of 1990
    requirement for area contingency plans for oil pollution
    response. The same thing is going to be done on the security
    basis.
        Those will be vetted in the other feeder, the government
    document is the port security assessment that has been done for
    each port. That is really the customer, that is, these
    committees and the captain of the port, so they can take those
    vulnerability assessments, along with threat assessments, and
    develop the appropriate plans and the contingency plans. And
    they will be embedded in each one of these captain of the port
    area plans, all to be completed, by the way, by the end of
    April, reviewed and approved, and in place by July 1 of this
    year.
        Senator Murray. That is all well and good, and I think you
    have done a marvelous job. The ports have done a really good
    job in responding to this. Mr. Chairman, what I am concerned
    about is the budget request. Admiral Collins testified, when
    was it, in the House last year that we would need $1.3 billion
    this year, and we have a $100 million budget request. So we are
    asking our ports to have these plans to be ready to go, and we
    are not funding them. I will have more conversations about
    this, Mr. Chairman, but I am deeply concerned about that.
        Senator Cochran. Thank you, Senator Murray. Senator
    Domenici.

                        FUNDING REAL NEEDS AND NOT WANTS

        Senator Domenici. Thank you very much, Mr. Chairman. First,
    I apologize for being late. I apologize to the witnesses.
        I would like to make a couple of observations and ask you
    to respond. It is not necessarily totally your problem, but I
    am unimpressed with the notion that everybody and every
    community of any size that makes noise will get help from the
    Department of Homeland Security.
        I would like to suggest to you that I do not believe we
    could ever afford to fund everybody that thinks they need a
    fire engine, everybody that thinks they need some
    transportation protection. But rather we have to conclude in
    some reasonable way, what is at risk and then help secure what
    is at risk.
        I do not know if you know. I am not sure that the committee
    members know, that well before this incident, Senators Lugar,
    Nunn, and Domenici put an amendment on the floor of the Senate,
    which passed overwhelmingly. It cost a lot of money, but it
    picked 120 cities, from experts, that needed first responder
    training. It did not pick 6,000. It picked 120.
        Now, might I ask first, Admiral Stone, because it is more
    relevant to you, and then with each hearing, I will ask all the
    way to the top, ``What do you do to evaluate people's concerns,
    versus the reality that we cannot do everything?'' There ought
    to be some way to cover real risks--strike that word--the most
    significant risks, rather than things that people think they
    need.
        Admiral Stone. Sir, I believe strongly, and we have this
    discussion almost every morning when an issue comes up at our
    operations and intelligence briefings, to look at an issue from
    a risk-based decision point of view, looking at three things:
    What is the threat? What is the criticality? And what is the
    vulnerability?
        Senator Domenici. What does ``criticality'' mean?
        Admiral Stone. The criticality? For instance, when the
    issue has come up about general aviation at Reagan Airport.
        Senator Domenici. Okay.
        Admiral Stone. What are the criticality of the assets
    involved in that particular decision? What is the
    vulnerability? There is a reduced reaction time. And then what
    is the threat? Do we believe that Al Qaeda has an interest, and
    terrorist organizations, in that particular modus operandi, to
    do us harm. So whether it has to do with general aviation at
    Reagan, that threat criticality and vulnerability, and then
    making a risk-based decision, I think, is key.
        Senator Domenici. So even though you are not the head of
    the whole department, you are telling me and this committee
    that you know enough to say to us, we are evaluating requests
    versus risk----
        Admiral Stone. Yes, sir.
        Senator Domenici [continuing]. All the time.
        Admiral Stone. Yes, sir.
        Senator Domenici. I might just say, fellow Senators, I have
    been observing and then trying to inquire when I see it, how
    groups rally and seek to impose, through political force, the
    needs of their organizations on the government. I do not think
    you ought to yield to that. I note the other day, and I love
    them, but the fire fighters had a big meeting. They wanted more
    things. I asked them the kinds of things they wanted, it became
    more obvious to me that there was a lot of the demand and the
    requests that just had to do with the fact that they wanted new
    equipment, not that they were at risk and needed new equipment.
    I see a difference. I do not see how we can fund the first, but
    we can the latter.
        If we are going to fund the first, we need a new program to
    say we are going to pay for the needs of the police and firemen
    of America. But that would not be related to this, it would
    seem to me. I could be wrong, and the Senate could say, yes, it
    does, because we do not know what is at risk, so we will cover
    everybody. But as of now, it is risk-oriented in terms of
    granting and assessing needs, and then funding them.
        Admiral Stone. Yes, sir, risk-based decision making is at
    the core of that decision process.

                     FLETC FACILITY AT ARTESIA, NEW MEXICO

        Senator Domenici. Okay. I thank you for that. I just have
    one parochial question, Mr. Chairman. I do not know if you
    know, Mr. Stone, some senators know, because I have been
    somewhat of an open advocate for a secondary FLETC facility
    that is now 12 years old in Artesia, New Mexico. You trained
    your air marshals there until 18 months ago, and then you got
    into an argument and you went to New Jersey.
        See, I do not win them all, Mr. Chairman, but I did not
    think it was a very good idea, and I still do not. I have
    talked to a lot of marshals, and it is interesting enough,
    though, the idea not to put it there, it was just too far away.
    The marshals that went there loved it. So I think it is a
    pretty good training facility.
        But now you have a new program, FFDO.
        Admiral Stone. Yes, sir.
        Senator Domenici. That is, Senator, if pilots want to carry
    arms, they ask, and they become volunteers to become trained so
    they can carry arms. Surprisingly, there are a lot of them,
    well, you might say a lot of them do not want to, but
    surprisingly, a lot of them do. We do not let them carry
    firearms just because they used to be deputy sheriff and know
    how to shoot a gun. They have to go through some pretty good
    training.
        Now, as I understand it, for the FFDO program the trainees
    are being trained at FLETC, Artesia----
        Admiral Stone. Yes, sir.
        Senator Domenici [continuing]. Is that correct?
        Admiral Stone. Yes, sir. The Federal Flight Deck Officer
    Program is the trainees at Artesia.
        Senator Domenici. Now, let me ask you, is the program
    effective and efficient, and what do you think about it?
        Admiral Stone. Extremely so. We are really proud of that
    program. The pilots themselves give us tremendously good
    feedback on the quality of the training in Artesia. Every week,
    we are graduating. We have a queue of folks that are in line to
    fill out all the quotas through the rest of this fiscal year.
    So we could not be more pleased with the quality of the
    training we see, the feedback from the pilots, and the extra
    level of security that that gives us today.
        Senator Domenici. From the standpoint of the Department, is
    this seen as something good, to go ahead and grant these pilots
    this permission and train them if that is what they want?
        Admiral Stone. It is my understanding, yes, sir. When I
    briefed this program up the chain into the Department, it is
    very well received as an additional layer that we are quite
    proud of.
        Senator Domenici. Could I ask, if you know this, what kind
    of feedback are you getting from the pilots with reference to
    this program in the event they have volunteered?
        Admiral Stone. The feedback on the critique sheets has all
    been superb training in Artesia, much better than I had
    thought, based on historical data for what they thought the
    course would be, now to come here and find out that it is top-
    shelf training. So all of those critiques that we get back from
    the FFDO pilots have been very complimentary of the process.

                          FEDERAL AIR MARSHALS PROGRAM

        Senator Domenici. Let me shift gears now. A sister
    function, which is bigger in numbers and better known, is the
    marshal program, air marshals. Could you tell me, is that
    program working? Do you know what the morale is of those who
    are in that program? Are you having a significant and sustained
    mainstream or stream of applicants who want to do this?
        Admiral Stone. Sir, I am partnered with ICE, Mike Garcia,
    and his team, that now own the FAMs. However, since December,
    ICE and the Federal Air Marshal Program have sent one of their
    top people to sit in on every ops Intel brief, which we hold
    every day at TSA, so that connectivity and teamwork and
    partnership is reflected in everything that we do in aviation
    now. I think that is a real success story for us.
        From all the indications that I see, that program is being
    run very well. And it is very flexible when we get threat
    indications or we see things that come up, that we immediately
    want to reprogram a FAM to a particular flight. That happens
    instantaneously as a result of that operational focus that we
    have with the FAM, so I would give it high scores as well.
        Senator Domenici. Well, I understand they are paid well.
    There is no question that they make very good money, and they
    can thus afford the flexibility of sometimes working different
    hours and being shipped around when they were not expecting to.
    From talking to them, they understand that, but I have also
    been told that there are more quitting than one would expect
    for such a highly paid program. Is that true, and if so, do you
    know why?
        Admiral Stone. Sir, I do not have any visibility on that
    particular issue.
        Senator Domenici. Could you check that in some reasonable
    way and relate it to some comparable program with high pay like
    that, in terms of the staying power of the program and filling
    the vacancies. And also, are you at full capacity, and if not,
    why?
        Admiral Stone. Yes, sir, I will be happy to look into that.
        Senator Domenici. Thank you, Mr. Chairman.
        Senator Cochran. Thank you, Senator Domenici. Admiral
    Collins, I noticed in the statement you submitted, in the part
    where you are talking about the need to recapitalize our
    operational assets, you point out that in your 110-foot patrol
    boats there have been 20 hull bridges requiring emergency dry
    docks.

      AVAILABLE NEW TECHNOLOGIES THAT COULD BE USED FOR REPLACEMENT COAST
                                 GUARD VESSELS

        I am wondering to what extent are new technologies
    available that could be used for replacement Coast Guard
    vessels that offer greater efficiencies or other benefits?
        Admiral Collins. Sir, first, let me give you a graphic
    example of one of those bridges. This is an out-plating from
    one of our recent 110s. You can see the corrosion, internal
    corrosion, and a fairly substantial hole. This is typical of a
    number of 110-foot cutters where failures were experienced.
    That, obviously, gives a sense of urgency about getting on with
    this patrol boat program.
        Of the technologies that we are attracted to, one is the
    composite technology. We are working with the Deepwater
    contractor on the surface side of the program. Northrup Grumman
    is exploring the use of a composite technology hull in
    particular for this fast-response cutter, which is this 110-
    foot cutter replacement.
        It is attractive from two or three dimensions. Number one,
    lower life-cycle costs. The maintenance and the haul-out cycle
    are much more reduced. The life of the hull is much longer than
    a comparable steel or aluminum hull. So we are looking at it
    very, very eagerly and discussing with Northrup Grumman way
    ahead if, in fact, we do choose to pursue composite technology.
        Senator Cochran. Are there any existing ships that you know
    of that have this technology now and have demonstrated its
    capability?
        Admiral Collins. Yes, sir. One of the leading shipyards in
    the world in this technology is Kockums Shipyards, Karlskrona,
    Sweden. Northrup Grumman is partnering with Kockums Shipyards
    as their technical advisor, if you will, on moving ahead with
    this composite technology. They have built a number of
    minesweepers very successfully, and current frigate, the Visby
    class, which I had the opportunity to go aboard 6 or 7 months
    ago, to sort of kick the tires on this technology, if you will,
    very, very impressive technology. And because of Northrup
    Grumman partnering with one of the world's specialists and the
    use of this technology, it appears to be a very potent team,
    Senator.

                        AUTOMATIC IDENTIFICATION SYSTEM

        Senator Cochran. There is also an indication in your
    statement, in the section dealing with maritime domain
    awareness, where you say, ``An intelligence and warning system
    that detects indicators of potential terrorist activity before
    an attack occurs is necessary to take preemptive and protective
    action.'' You then go on to say you are currently installing an
    automatic identification system in your vessel traffic service
    ports and formalizing requirements to award a contract of a
    nationwide AIS network, the Automatic Identification System.
        Exactly how is that going to work? Is this a new technology
    that is envisioned, or is it something that you feel
    comfortable about moving forward? I notice you are requesting
    $4 million to continue this project. How is that money going to
    be spent?
        Admiral Collins. One approach is to embed AIS technology
    and all our nine VTSs around the country so there will be AID,
    or Automatic Identification System-based vessel traffic
    systems. That will all be completed by the end of this calendar
    year for all those systems. So we will have AIS-based.
        Also, another requirement for AIS is as a result of our
    initiatives with the International Maritime Organization,
    where, as you know, we pushed through an international standard
    for shipping successfully, the international ship and port
    security code, and also SOLAS, Safety of Life At Sea
    amendments, that require AIS on all in-bound commercial ships
    over 300 gross tons no later than 1 December 2004. These are
    transponders that identify position and location and other
    information. These AIS-equipped VTSs can take that signal.
        We also need to be able to receive those VHFM-communicated
    signals in other places beyond those ports. And we are looking
    at all kinds of different options to put AIS equipment on off-
    shore platforms. As you well know, in the Mississippi, there
    are over 3,000 off-shore platforms. They could be a great
    location for those systems, so we have the coverage. It is a
    coverage issue. There is also the Rescue-21, which is the VHF
    high-sites that we are putting around the country, is to hang
    AIS systems off of those as well.
        So we are looking at all that infrastructure, trying to
    minimize the infrastructure burden by using existing locations
    and infrastructure in order to get the coverage we want. So we
    think it is a great way to go. We are optimistic about it.
        The other dimension of AIS is long-range tracking, the idea
    of how do you get long-range tracking, because this one is a
    short range. How do you get like over 2,000 miles type of range
    and reporting requirements? This is another program and
    initiative that we are running through IMO to establish it as a
    worldwide standard. We are looking at various options for long
    range.
        It gets complicated real quickly, Mr. Chairman, because it
    has a lot of moving parts, but we are taking a very
    comprehensive look at all of the pieces.

                                   RESCUE 21

        Senator Cochran. One other modernization effort, I
    understand, is having some kind of identification system that
    shows the location so that you will not have to guess where the
    ship is.
        Admiral Collins. That is our Rescue 21 project, Senator,
    that is a fairly substantial feature of our capital request in
    2005. It has been in previous years. We are focused to build
    that system out by the 2006 time frame. That is the one that
    establishes high towers around the country and monitors VHF,
    FM, and other distress calls from emergencies at sea. It has
    digital recording capability, and direction-finding capability
    so we can hone in on the signal, fix the position, and take the
    search out of search and rescue. It is a very, very, very, I
    think, positive addition to our capability.

                      CAPPS II DEVELOPMENT AND DEPLOYMENT

        Senator Cochran. Thank you. Admiral Stone, we noticed that
    your request is $892 million more than the adjusted and enacted
    level for fiscal year 2004. And one of the additional requests
    this year that you are making is for a second-generation,
    computer-assisted passenger pre-screening system, the so-called
    CAPPS II.
        I know you envision this as a modern--more modern pre-
    screening system than the one that is currently in use by the
    airlines. How soon do you think the TSA will be able to develop
    and deploy this system?
        Admiral Stone. We are confident that we will be able to get
    in place the privacy, redress, and oversight measures that we
    know are key to ensuring that we have the trust and confidence
    of the American people to put forth such a system that we think
    significantly enhances security. The time line for that is we
    hope to have in the spring, the NPRM, the Notice of Proposed
    Rule-making out, and approved within the Department, as well as
    the security directive that we need. So we are looking at being
    able to have the oversight, redress, and privacy pieces, and
    then forwarded to the Department this spring, the NPRM and the
    SD. At that point, the Department will review it and make the
    decision concerning forwarding for testing purposes.
        Once we have the approval to conduct testing, we envision
    that that process will be one in which we are going to want to
    test historical data. So we are going to want to give the
    airlines a couple of months to review the NPRM and the SD, and
    then we will go back and look at a historical month. This is
    our testing approach. So we are hopeful this summer that we
    would be able at some point to be able to conduct that sort of
    a test.

                      EXPEDITED REGISTERED TRAVEL PROGRAM

        Senator Cochran. I was encouraged to know that you are
    concerned about reducing the hassle factor in airports for
    passengers and baggage screening, and that you are considering
    a registered travel program to help accomplish this. Can you
    tell us when you think you might have an expedited program in
    place?
        Admiral Stone. We are very excited about getting a pilot
    going. That first step of actually doing a pilot and having a
    voluntary program where we are looking at groups of individuals
    that have volunteered, and then pairing that up with a
    biometric so that we can then verify that individual and be
    able to have a tailored process, either a dedicated lane,
    depending on the airport, so that we can facilitate the
    registered travelers through the checkpoint in a quicker
    manner. Our goal is in June, to be able to start that pilot and
    run it for about 90 days, and then glean the lessons from it
    with an eye towards continuing into 2005 with a more advanced
    program so that we can get on with the issue of registered
    traveler.

                           UNQUALIFIED AUDIT OPINION

        Senator Cochran. Finally, I think I should congratulate you
    for achieving an unqualified audit opinion for the last fiscal
    year. This is your third consecutive clean audit, I am advised,
    and you are maintaining a clean audit record and correcting
    control weaknesses that were noted in the audit reports. So I
    congratulate you for that.
        Admiral Stone. Thank you, Senator.
        Senator Cochran. Senator Byrd.

              NON-INTRUSIVE SCREENING OF PASSENGERS FOR EXPLOSIVES

        Senator Byrd. Admiral Stone, in December 2001, Richard Reed
    was prevented from exploding his improvised shoe bomb due to
    quick action on the part of the passengers and crew of an
    American Airline flight from Paris to Miami. In the intervening
    2 years, we appear to have increased the screening of checked
    baggage for explosives, but there appears to be little effort
    being made to enhance the screening of passengers themselves
    for hidden explosives.
        The technology and equipment exists to non-intrusively
    screen passengers for explosives. What is TSA doing to address
    this potential threat?
        Admiral Stone. Senator, I just stopped at our Atlantic City
    laboratory to review the explosive trace portal that is
    undergoing testing and certification. We firmly believe at TSA
    that we need to transform our checkpoints. The checkpoints that
    we have today, in the wake of 9/11, got the job done for us.
        The EDS systems that we have today, as well, were out there
    to ensure that we had an extra measure of protection. But now,
    in partnership with the Department of Homeland Security S&T
    Division, we started to review the entire aviation security
    role of TSA. Does the equipment match the threat, whether it be
    sheet explosives or any other potential threat? We are keen to
    ensure that we are investing and transforming our checkpoints
    to reflect the threats that we see coming down the road and
    experiencing today, rather than the box cutters that caused and
    the scenarios that caused 9/11.
        So our intent is to get that equipment certified, tested at
    Atlantic City, and then expedited out into our checkpoints to
    give us that explosive detection capability at our passenger
    checkpoints that you mentioned.
        Senator Byrd. How much of your fiscal year 2005 budget
    request is devoted to enhanced screening of passengers for
    explosives.
        Admiral Stone. We have, for our checkpoint modification, I
    think it is $44 million, or somewhere at $44 million or $46
    million for checkpoint enhancements, of which allows us to
    introduce to our checkpoints additional technologies.

     SECURITY PLANS REQUIRED UNDER THE MARITIME TRANSPORTATION SECURITY ACT

        Senator Byrd. To meet the requirements of the Maritime
    Transportation Security Act, vessel owners and port facility
    owners were required to submit security plans to the Coast
    Guard for review and approval by December 31, 2003. It was
    reported earlier this year that only one-half of all vessels
    and less than one-third of port facilities met the December 31
    deadline.
        According to your testimony, Admiral Collins, those numbers
    have improved dramatically. How many penalties have you levied
    against non-compliant companies?
        Admiral Collins. Senator, we have had about 97 percent of
    all the plans in, so we have really made some progress here
    over the past several months. Total number of notices of
    violations that were issued for the facility side of the plans
    were 63 notices of violation, and for the vessels, were 89 that
    have notices of violations for not meeting submittal
    requirements, Senator.
        But again, we have over 97 percent submitted this date. So
    we are confident that we are going to get all of them in and
    all of them reviewed and all of them approved, as appropriate,
    or adjusted as we go back and work with the submitter to ensure
    that they meet all the requirements of the rule and the law.
        Senator Byrd. Have there been corresponding penalties
    levied against non-compliant companies?
        Admiral Collins. I do not have the exact figures on that,
    Senator, with me today, but I will be glad to give you a prompt
    response on exactly the adjudication of those notices of
    violation.
        Senator Byrd. Very well. If you will, please. How many
    plans have you sent back for revisions? Would you supply that
    information also?
        Admiral Collins. I will provide you with that as well, sir,
    yes.
        [The information follows:]
     Security Plans Required Under the Maritime Transportation Security Act
        As of April 7, 2004, we have issued Notices of Violations (NOVs) to
    95 vessels and 66 facilities. Each of those violations was for failing
    to submit a completed security assessment and has a $10,000 civil
    penalty associated with it. Subsequently, we have issued civil
    penalties in the amount of $25,000 to four of these facilities for
    failing to submit a completed security plan (for a total fine of
    $35,000). These penalties were based on violations of 33 CFR Section
    104.410 for vessels and 33 CFR Section 105.410 for facilities.
        The security plan review and approval process consists of several
    distinct stages.
        For vessels there are two stages. Stage I review determines if a
    plan contains all critical elements outlined in the regulations, and
    Stage II review ensures that security measures specified in the plan
    adequately address the vulnerabilities which are identified in the
    security assessment. Vessel security plans receive final approval
    (Stage 2) from the Coast Guard Marine Safety Center in Washington, DC.
        For facilities there are three stages. Stage I and II review is
    parallel with the vessel Stage I and II, which are completed at the
    National Facility Plan Review Center in Kansas City, KS. Stage III
    consists of a final review that is completed and approved by the local
    Captain of the Port.
        All vessel and facility security plans through Stage II and Stage
    III have been completed.
        The Coast Guard has also issued a total of 157 Notices of Violation
    and civil penalties for failure to submit required security plans.

        Senator Byrd. What are you learning about the security
    needs of vessels and port facilities based on the plans that
    have been submitted?
        Admiral Collins. What we are learning is from the port
    security assessments in terms of vulnerabilities. As required,
    we are doing port security assessments for 55 of our major
    ports around the country. We will complete them all by the end
    of this calendar year, a lot of which is classified, by the
    way.
        But there are a lot of things that are coming out in that
    in terms of vulnerabilities. Generally, I will state, for
    example, underwater threats and how we are vulnerable in our
    ports for underwater threats is just an example of some of the
    things that we are finding in some of these assessments.
        These port security assessments will provide a lot of the
    solid information that we will use to craft these port-wide
    security plans that are also to be completed this spring. But
    all these assessments are sort of source documents to get a
    hold of the vulnerability end of the risk equation that Admiral
    Stone talked about and then match them up with a threat
    assessment as well and to have a complete picture of what gaps
    we need to fill.
        The other interesting thing, Senator, the purpose these
    serve is that when we do evaluate grant applications, that come
    in for port. We are sort of one of the expert witnesses that
    review those applications at the local level. We use all the
    vulnerability assessment we have done as a yardstick against
    which to measure this application as to whether it addresses a
    number of the gaps that have been identified in these
    assessments.
        So I think it is a good system that we have, and a
    comprehensive approach. And we are going to distill down the
    results of these port security assessments into a geographic
    information system display that is available for each one of
    our port security committees around the country so a ready file
    of information, very practical information that can be used by
    the port security including all the stakeholders in the port to
    make the right decisions about which risks and which gap to
    address first, second, and third.

                             PORT SECURITY FUNDING

        Senator Byrd. The Coast Guard estimates that $1.125 billion
    is needed in the first year and $5.4 billion over the next 10
    years for ports to comply with the Federal regulations that
    have been mandated by the Maritime Transportation Security Act.
    Until fiscal year 2005, the president never requested funding
    to help ports implement security improvements, as outlined in
    the MTSA, and his budget request for fiscal year 2005 is 62
    percent lower than the amount Congress provided last year.
        When Secretary Ridge testified before this subcommittee in
    February, he said that he believes port facility owners should
    bear most of the financial burden to harden security at our
    seaports. What evidence do you have that these owners are
    stepping up to the plate and investing their own resources in
    port security?
        Admiral Collins. Many of them have. Many of them have
    security plans already in place. Some of them are exercising
    those. They are aggressively pursuing grants, and use of grants
    to meet the terms and conditions of the new standards. Over
    $500 million, thanks, obviously, to the support of Congress in
    making those funds available. But over $500 million has been
    distributed to ports and port facilities to undertake some of
    this hardening, as you put it. There is $46 million within the
    2005 budget for additional source of grants for ports, and
    ports have the ability to also apply through ODP.
        The applications are reviewed by TSA, the Coast Guard, and
    other expert witnesses to also apply for higher levels of
    funding. There is over $3 billion worth of grant money that is
    included in the overall Department of Homeland Security budget.
    So there is $46 million dedicated and another ability to apply
    for that larger pot, a general pot of grant money as well.
        Senator Byrd. But the Administration is proposing to cut
    those grants by 62 percent. Why?
        Admiral Collins. I do not know exactly the way that final
    pot was determined, Senator. It is about $3.4 billion, as it
    stands now, submitted in the President's budget. Again, we do
    not administer the overall money. But as I recall, $8 billion
    overall has been given out in grant money by the Department of
    Homeland Security. I might look at Admiral Stone to confirm
    that number, but I believe it is $8 billion overall in the past
    2 years. And this represents another $3.5 billion, so a
    substantial amount of money, by anyone's accounting, that has
    been distributed to first responders and other requirements
    throughout the Department, including those port facilities.
        Senator Byrd. I am advised that that $8 billion is for
    first responders, not for port security.
        Admiral Collins. Again, over $500 million was allocated for
    ports and port facilities.
        Admiral Stone. Yes, sir, and with regard--Senator, may----
        Senator Byrd. Admiral Stone.
        Admiral Stone [continuing]. I help on that, or----
        Senator Byrd. Yes.

                          PORT SECURITY GRANT FUNDING

        Admiral Stone. The comment on the $46 million for fiscal
    year 2005 for port security grants is indeed reflective of the
    Department's view that the private sector needs to step up to
    the plate with regard to the security at our Nation's ports.
        Senator Byrd. Mr. Chairman, I hope there is some way we can
    get our arms around this question as to whether or not port
    facility owners are stepping up to the plate and investing
    their own resources in port security, as the secretary
    continues to advise as being the best way to solve this
    problem.
        We cannot seem to come to grips with it. The secretary says
    port facility owners need to provide this security, rather than
    the Federal Government, and yet we cannot seem to find out what
    port facility owners are doing.
        I have one more question. Do I have time to ask it, Mr.
    Chairman?
        Senator Cochran. Yes, sir, as long as Senator Inouye is not
    inconvenienced.
        Senator Byrd. Why do not I turn to Senator Inouye and let
    him ask----
        Senator Inouye. I have no questions.
        Senator Byrd If I have time, I will ask another. Thank you.

                            DEEPWATER BUDGET REQUEST

        The budget includes $678 million for Deepwater, the Coast
    Guard's program to modernize and replace its aging ships,
    aircraft, and communication systems. While this is a slight
    increase over the $668 million provided in fiscal year 2004, we
    believe that a significantly larger amount is needed to keep
    pace with the Coast Guard's homeland security mission
    requirements. It was conceived as a 20-year program, but the
    President's request only keeps the program on a 22-year
    schedule.
        Deepwater was conceived prior to the 9/11 attacks. The
    intention was to ensure that the Coast Guard had the assets to
    maintain its overall capabilities. Following September 11th,
    the Coast Guard's role in protecting the homeland increased
    dramatically, but the Deepwater program has not been adjusted.
        You state in your testimony that the Coast Guard's greatest
    threat to mission performance continues to be aging assets that
    are technologically obsolete. Why then are you only requesting
    enough funding to keep the Coast Guard on pace to complete
    Deepwater in 22 years when the majority of these assets will
    reach the end of their service life by 2008? Admiral Collins,
    please.
        Admiral Collins. Clearly, we are pleased with the continued
    support that we are getting from the Administration and from
    Congress on Deepwater. Obviously, it is a major initiative for
    us. We feel very, very important. The 2005 budget does keep
    most of the major pieces on track for Deepwater, and I think
    how fast we do Deepwater at this point probably falls in the
    out-year category to continue to consider the flow of assets.
    One year, of course, of funding does not continue the total
    flow. It is how you program these assets over time to get on
    the right time line.
        Again, as the operational commander, I am confronted with
    the dilemma to try to balance this number and try to balance it
    between legacy systems, or those old systems that are wearing
    out, and the new systems that have to replace them. And it is a
    dynamic process that we are going to have to collectively deal
    with.
        My apprehension, Senator, is that it is going in the wrong
    direction, that the readiness part, that downward spiral
    phenomena is something that concerns me as an operational
    commander, and the ability to deliver the services. So this is
    a tough question that we have to continue to address.
        Senator Byrd. Admiral, you have been a good soldier. You
    have been a good soldier. You are sticking to the
    Administration's request, but the Coast Guard submitted a
    budget request for over $1 billion to OMB for fiscal year 2005.
    You support the President's request, but I understand that you
    requested $1.1 billion to OMB for approval. What would the
    program time line be if your fiscal year 2005 Deepwater budget
    were $1.1 billion?
        Admiral Collins. That glide slope, Senator, of course, it
    is more than 1 year a program makes, but that glide slope, if
    it was funded at that kind of rate, would be basically a 15-
    year program. And that is what that number, consistently
    applied, plus or minus a bit each year customized to the year
    over time, it would lead to a 15-year program.
        Homeland Security Act required the Department and the Coast
    Guard to submit a report to Congress on the feasibility of
    accelerating Deepwater. That report was sent last year. It was
    one of the first reports from the Department that identified
    the feasibility of accelerating.
        The requirement in the Act was to report on the feasibility
    and desirability of accelerating to a 10-year program and so
    forth.
        So that particular report is a matter of record. It has
    been sent to the House and the Senate, and it describes this
    particular course of action as well, Senator.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Byrd. Thank you, Senator Inouye, and thank you, Mr.
    Chairman. Thank you, Admiral Collins. Thank you, Admiral Stone.
    You are both good soldiers.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

              Questions Submitted to the United States Coast Guard

                  Questions Submitted by Senator Thad Cochran

                  integrated deepwater system (``deepwater'')
        Question. The fiscal year 2005 budget request includes an increase
    of approximately $10 million, for a total of $678 million, for the
    Integrated Deepwater System initiative. Will the requested level of
    funding for fiscal year 2005 put the Deepwater program back on track to
    be completed within the original 20 year time-frame? If not, what level
    of funding would be necessary to achieve this goal?
        Answer. The fiscal year 2005 budget request does not put the
    Deepwater Program on track to be completed within a 20-year time frame.
    To complete the acquisition in 20 years, the Coast Guard estimates the
    Deepwater Program would require $795 million for fiscal year 2005, and
    assumes continued funding at this level adjusted for inflation.
        Question. The Coast Guard is revising the Deepwater program's
    Mission Needs Statement (MNS) to coincide with a post September 11th
    environment. What is the time line for the Department of Homeland
    Security to approve the revised MNS and what impact will the revised
    MNS have on Deepwater program costs and acquisition schedule?
        Answer. The Deepwater MNS has been revised and is under final
    review by Coast Guard leadership. Once complete, the MNS will be
    forwarded to the Department of Homeland Security for review and
    validation. A formal briefing before the Department's Joint
    Requirements Council (JRC) is scheduled for May 25, 2004.
        As approved by DHS, the Coast Guard will engage our Deepwater
    system integrator to determine the most economical implementation plan
    for those new requirements identified in the updated MNS. Some new
    requirements, particularly those that emphasize DHS and DOD
    interoperability, will potentially lead the system's integrator to
    select alternate sub-systems or components in order to achieve any new
    requirements.
        The Integrated Deepwater Systems acquisition strategy and solution
    remain sound. However, increased mission demands, legacy asset
    capability obsolescence, and deterioration in legacy asset materiel
    condition since 1998 have created a performance gap in both capability
    and capacity. The updated MNS is projected to help close this gap. The
    cost and schedule implications have not yet been determined. When new
    requirements are approved, total owner cost estimates and the out-year
    acquisition schedule will be modified as required.
        Question. The fiscal year 2005 budget request for the Maritime
    Patrol Aircraft (MPA) is $5.3 million, a decrease of approximately
    $19.6 million from the fiscal year 2004 enacted level. Why is there
    such a decrease for a program that was significantly funded in fiscal
    year 2004, for which there is a contract to purchase at least four
    aircraft? What impact will this proposed decrease have on the MPA
    program? Will decreased funding for the MPA program delay the delivery
    of these aircraft? What impact does this have on the Deepwater program
    in general?
        Answer. The Coast Guard is currently acquiring the CASA CN235-300M
    as the Deepwater medium range Maritime Patrol Aircraft (MPA). The Coast
    Guard does not have a contract to purchase four aircraft. The Coast
    Guard funded the acquisition of two MPA in fiscal year 2003 and a third
    in fiscal year 2004. The Coast Guard's fiscal year 2005 budget request
    funds the missionization of the third CASA aircraft. This
    missionization includes the logistic complement required for Full
    Operating Capability and partial spare parts used for the logistics
    system start up. Delivery of the first two MPAs is scheduled for 2006,
    with full operational capability in late 2006 or early 2007.
        The Coast Guard is working to align the Deepwater Program with the
    strategic goals and objectives of the Department of Homeland Security
    (DHS). The DHS Joint Requirements Council (JRC) reviewed DHS Aviation
    Requirements in January 2004 at their first meeting. DHS decisions on
    future aviation requirements will determine the exact mix of aircraft
    in the Deepwater plan, at which time the funding and delivery schedule
    will be adjusted, if necessary.
        Question. The fiscal year 2005 funding request for the Vertical
    Unmanned Air Vehicle (VUAV) is $43 million, to continue work that was
    funded in fiscal year 2004 on two VUAV's; however, the requested
    funding level is not sufficient to bring either of the two VUAV's into
    full operational capability. What level of funding would be necessary
    to make one, or both, of these VUAV's fully operational? If funding is
    limited, would it not be better to provide the funds required to bring
    one VUAV into full operation rather than to partially fund two VUAV's,
    as proposed in the budget?
        Answer. The $50 million in fiscal year 2004 provides for detailed
    design of the VUAV and culminates in VUAV critical design review. The
    $43 million in fiscal year 2005 is for production of 2 VUAVs and
    associated ground control stations including developmental and
    operational testing. However, the fiscal year 2004 & fiscal year 2005
    funding of $93 million gets the Coast Guard VUAVs that are at Initial
    Operating Capability (IOC). These VUAVs will not have the necessary
    equipment for air space de-confliction and secure data link, which is
    required for Full Operating Capability (FOC). The funding necessary to
    bring both VUAVs to FOC (includes equipment for air space de-
    confliction and secure data link, associated Non-Recurring Engineering
    (NRE), and testing) is approximately $30 million. Bringing one VUAV to
    FOC is not cost efficient, as the cost drivers are the design work, NRE
    and testing, and not the production of the aircraft itself.
    Additionally, two aircraft are needed for IOC testing.
        Question. Re-engining of the HH-65 helicopter was initiated with
    funds appropriated in fiscal year 2004 for other aircraft programs
    within Deepwater. From which program lines have fiscal year 2004 funds
    been moved to address the re-engining of the HH-65? How much funding
    from each line has been reprogrammed? What impact does this shifting of
    funds have on those programs in fiscal year 2004? Are changes to the
    fiscal year 2005 budget request necessary to address the shortfalls in
    fiscal year 2004 funding for the programs from which funds were shifted
    for the HH-65 re-engining?
        Answer. The fiscal year 2004 Deepwater Appropriation has a $67.7
    million Program Planned Activities (PPA Line Item) for ``Air Other
    Contracts/Legacy Sustainment.'' The HH-65 re-engining is an aviation
    legacy asset sustainment project, so it was appropriately funded from
    the Air Other Contracts/Legacy Sustainment PPA and no reprogramming
    from other PPA line items occurred.
        Since the re-engining was not a planned sustainment project for
    fiscal year 2004, the following legacy asset sustainment projects
    previously planned for execution under the fiscal year 2004 Air Other
    Contracts/Legacy Sustainment PPA were deferred in order to fund the
    fiscal year 2004 portion of the HH-65 re-engining. These deferred
    projects include: HH-65 Landing Gear Replacement, HH-65 Integrated
    Radar/FLIR Upgrade, HH-65 Tail Rotor Recapitalization, HH-60 Integrated
    Radar/FLIR Upgrade, HH-60 Service Life Extension, C-130 APS-137 Search
    Radar Replacement, and C-130 Weather Radar Replacement. Additionally,
    HH-60 Avionics upgrade projects was funded at a level lower than
    planned due to the HH-65 re-engining.
        The aviation legacy sustainment projects deferred in fiscal year
    2004 will not require changes to the fiscal year 2005 budget to meet
    shortfalls. Because it is a safety and reliability concern, HH-65 re-
    engining remains the highest aviation legacy priority in the fiscal
    year 2005 President's Budget. The aviation legacy asset projects
    deferred in fiscal year 2004 and fiscal year 2005 are necessary and
    will need to be funded in the future to ensure the sustainment of those
    aviation legacy assets until replaced by new IDS assets but do not have
    the immediacy of HH-65 re-engining.
        Question. The fiscal year 2005 budget request for the HH-65 re-
    engining includes $75 million for approximately 25 aircraft. Will this
    complete the re-engining effort? If not, what level of funding is
    necessary to complete the re-engining of the Coast Guard's HH-65 fleet?
    What is the projected time-frame for completing this re-engining
    project?
        Answer. The $75 million in the fiscal year 2005 budget request will
    not complete the re-engining effort. Although the exact acquisition
    costs of the HH-65 re-engining will not be known until receipt of ICGS'
    proposal, the budgetary estimate is approximately $3 million per
    aircraft for a total estimated project cost of $288 million. The 25
    aircraft re-engined with fiscal year 2005 funds will bring the total
    number of re-engined aircraft to 41, with 52 remaining to be re-
    engined. The required funding for the remaining 52 aircraft is
    approximately $156 million.
        By June 2004, the Coast Guard plans to issue a Delivery Task Order
    (DTO) for the identified solution. The planned implementation schedule
    will be included as part of the final DTO. The Coast Guard estimates
    the re-engining of the HH-65 fleet to take approximately 24 months.
        Question. Once the Coast Guard has modified the HH-65 helicopters
    and added more power to them, will all the safety and reliability
    problems be resolved and will you be able to take the restrictions off?
    If not, why not?
        Answer. The HH-65 re-engining project was designed to address the
    safety and reliability crisis arising from accelerating frequency of
    power loss circumstances and restore the HH-65's operational
    capability. The selected solution, the TurboMeca Ariel 2C2 is expected
    to provide the safety and reliability required for the HH-65's multi-
    mission roles. Once the solution is fully implemented, the Coast Guard
    will be able to lift current operational restrictions.
        Question. What is the Coast Guard's logic in using the Integrated
    Coast Guard Systems for the replacement project? GAO reports that it
    might have been faster and cheaper had the Coast Guard conducted the
    acquisition. Could the Coast Guard have completed this project itself?
        Answer. The Coast Guard directed Integrated Coast Guard Systems
    (ICGS) to immediately re-engine the HH-65 after careful consideration
    of other procurement options for the following reasons:
      --The HH-65 is a Deepwater legacy asset. The Coast Guard hired ICGS
            for the Deepwater project.
      --Part of the re-engining requirement for safety and reliability of
            this Deepwater asset included maximizing operational
            effectiveness of Integrated Deepwater systems while minimizing
            total ownership cost impacts. ICGS was best suited to make that
            determination.
      --The ICGS proposal was evaluated based upon cost, schedule and
            performance.
      --The Coast Guard has the advantage of utilizing Deepwater's existing
            management and measurement systems to track cost, schedule and
            performance. The safety and reliability crisis dictated that
            the Coast Guard employ the best method to execute the re-
            engining project. ICGS' corporate approach brings many talents
            to the acquisition process (e.g. ability to negotiate volume
            purchase or offer premiums to more expeditiously acquire
            required stock of engines).
        While the Coast Guard is capable of completing the project, the
    risk associated with removing the HH-65 re-engining project from the
    existing contract with ICGS to effect the MCH conversion was deemed to
    be unacceptably high.
        Question. What is the relationship between the HH-65 replacement
    project and Deepwater? Can you provide us assurances that it won't be
    necessary to re-engine the HH-65 a third time?
        Answer. The Coast Guard has directed that a re-engining project be
    immediately initiated to restore the HH-65 to unrestricted safe and
    reliable operations. The project is designed to address the HH-65
    engine system, the engine and engine control systems, to remedy this
    safety and reliability crisis, and restore the HH-65's operational
    capability.
        The HH-65 re-engining project is a separate and distinct effort
    from the Deepwater Multi-mission Cutter Helicopter (MCH). In the long-
    term, the Deepwater plan is still to convert the HH-65 to the Multi-
    mission Cutter Helicopter (MCH). While power increases were not the
    focus of this acquisition, the engine chosen, while addressing the
    safety and reliability concerns, also has sufficient power margins to
    allow for that engine to be used in the continuation of the MCH. As
    such, another re-engining should not be necessary.
        Question. What appropriations are being used for the HH-65
    replacement project, and how will this spending affect future spending
    on helicopters for the Coast Guard?
        Answer. The fiscal year 2004 appropriation being used for the HH-65
    engine replacement project is the ``Air Other Contracts/Legacy
    Sustainment'' Program Project and Activities (PPA) line item. This PPA
    line item is also projected to fund re-engining in the fiscal year 2005
    President's budget request. The effect on future helicopter spending is
    that the price of the Multi-mission Cutter Helicopter (MCH) should
    decrease to reflect the fact that engine replacement will no longer be
    required when the HH-65 is converted to an MCH.
        Question. What is the relationship between the HH-65 replacement
    project, the future Multi-mission Cutter Helicopter acquisition, and
    Hitron?
        Answer. The HH-65 re-engining project is an effort to correct a
    safety and reliability concern that is separate and distinct from both
    the Deepwater Multi-mission Cutter Helicopter (MCH) conversion project
    and HITRON.
        The Coast Guard directed the Deepwater acquisition program's
    systems integrator, Integrated Coast Guard Systems (ICGS), a
    partnership of Lockheed Martin and Northrop Grumman, to take immediate
    and definitive action to re-engine the HH-65 fleet to ensure safe and
    reliable operations. In the long-term, the Deepwater plan is still to
    convert the HH-65 to the Multi-mission Cutter Helicopter (MCH). While
    power increases were not the focus of this acquisition, the engine
    chosen, while addressing the safety and reliability concerns, also has
    sufficient power margins to be used with the MCH. The HITRON Airborne
    use of force mission is currently not a Deepwater requirement. There
    is, however, the potential to include this requirement under future
    contract modifications. The Turbomeca engine meets the anticipated
    airborne use of force power requirements should these become part of
    the future MCH mission profile.
        Question. The fiscal year 2005 budget request includes $15 million
    for capability enhancements for HH-60 avionics for one aircraft. How
    many HH-60 aircraft are in the Coast Guard fleet? Does the Coast Guard
    intend to provide these capability enhancements for each HH-60? Is the
    anticipated cost $15 million per aircraft, or will this funding level
    decrease after the first avionics upgrade is completed?
        Answer. There are 42 HH-60 aircraft in the Coast Guard fleet, and
    the Coast Guard intends to provide these capability enhancements to the
    avionics suite of each HH-60. The $15 million request in fiscal year
    2005 is for Non-Recurring Engineering (NRE) work associated with the
    avionics upgrades and does not upgrade any aircraft. The total project
    cost to upgrade all 42 aircraft is estimated at $121 million. This
    amount includes: long lead material, NRE, production, and operational
    test and evaluation. The HH-65 re-engining project is the highest
    priority aviation legacy asset sustainment project. The HH-60 avionics
    upgrade may be deferred if these funds are required to meet an
    accelerated re-engining solution.
        Question. The fiscal year 2005 budget request includes $9 million
    for capability enhancements for HC-130 aircraft radar in one aircraft.
    How many HC-130 aircraft are in the Coast Guard fleet? Does the Coast
    Guard intend to provide these capability enhancements for each HC-130?
    Is the anticipated cost $9 million per aircraft, or will this funding
    level decrease after the first radar upgrade is completed?
        Answer. The Coast Guard currently has 27 total HC-130 ``Hercules''
    aircraft, 22 of which are operational while 5 are storage or support
    aircraft. In addition, the Coast Guard recently acquired six HC-130J
    aircraft, which are not fully missionized. The $9 million in fiscal
    year 2005 will upgrade the radar on one HC-130H and will also pay for
    the Non-recurring Engineering and Operational Test and Evaluation of
    the first upgraded aircraft. Coast Guard does intend to provide these
    capability enhancements for each HC-130, once funding is available. The
    average unit cost is approximately $3 million.
        Question. Was the fiscal year 2004 funding for the National
    Security Cutter (NSC) sufficient to complete the first NSC, or will a
    portion of the fiscal year 2005 requested funding be needed for its
    completion? The fiscal year 2005 budget request for the NSC is $274.5
    million. Is this funding level sufficient to complete the first and
    second NSC? If not, what additional funding may be necessary for
    completion?
        Answer. The funding for the National Security Cutter (NSC) in
    fiscal years 2002 through 2004 is sufficient to achieve initial
    operating capability for the lead ship. The Coast Guard anticipates
    requesting additional funding in fiscal year 2006 to attain full
    operating capability. Based on current cost projections, the fiscal
    year 2005 budget of $274.5 million for the NSC will complete the second
    NSC through full operating capability.
        Question. The fiscal year 2005 budget request includes $5 million
    for the Offshore Patrol Cutter (OPC). Is this sufficient funding to
    complete the design for the OPC? If not, how much funding is needed for
    completion of the design phase? How much is needed to begin
    construction? When does the Coast Guard anticipate completion of the
    design, beginning construction, and delivery of the first OPC?
        Answer. The $5 million requested in fiscal year 2005 will be
    combined with the $20 million appropriated in fiscal year 2004 to
    continue the requirements analysis, risk assessment and composite
    component analysis associated with the design and development of the
    Offshore Patrol Cutter (OPC). Based on a current projected cost for the
    OPC lead ship of $330 million, completion of the design would require
    an additional $59 million and construction would require an additional
    $246 million. The originally proposed implementation plan included
    acquisition of the first OPC in 2012, but the Coast Guard accelerated
    the design of the OPC to mitigate the risk of the deteriorating
    condition of the Medium Endurance Cutter fleet. Once the design is
    complete and the projected costs are refined, a business case analysis
    will be conducted to determine the optimal time to start the OPC
    construction, factoring in the latest information on the deteriorating
    condition of the Medium Endurance Cutter fleet.
        Question. The fiscal year 2005 budget request includes $60 million
    for the 110-123 foot conversions and the Fast Response Cutter, but the
    request does not specify how much funding is needed for each activity.
    How many 110-123 foot conversions does the Coast Guard expect to
    achieve in fiscal year 2005? How much funding is needed per vessel to
    complete a conversion?
        Answer. The Deepwater Program is conducting an analysis to
    determine the appropriate number of 123-foot patrol boat conversions to
    complete prior to switching to the Fast Response Cutter. A decision is
    expected this fiscal year (2004), and the Business Case Analysis will
    be provided at that time. The unit cost for the 110-foot to 123-foot
    Patrol Boat conversion is approximately $8.2 million per asset.
        Question. The design phase of the Fast Response Cutter (FRC) was
    started in fiscal year 2003. Does the Coast Guard anticipate completion
    of the FRC design in fiscal year 2005? How much funding is necessary to
    complete the design of the FRC? What is the anticipated completion date
    for the design? When does the design phase end and construction begin?
        Answer. The Coast Guard anticipates completion of the Fast Response
    Cutter (FRC) design in fiscal year 2005. The Deepwater Program is
    conducting an analysis to determine the appropriate number of 123-foot
    patrol boat conversions to complete prior to switching to the FRC. A
    decision is expected in fiscal year 2004, and the Business Case
    Analysis (BCA) for accelerating the FRC and the number of 123
    conversions will be provided at that time. Construction could begin as
    soon as fiscal year 2006 if supported by the BCA.
        Question. The fiscal year 2005 budget request includes
    approximately $2.3 million for one Long Rand Interceptor (LRI) and
    three Short Range Prosecutor (SRP) small boats, but does not specify
    how much funding is needed for each. How much funding is necessary for
    one Long Range Interceptor? How much funding is necessary for three
    Short Range Prosecutors?
        Answer. In fiscal year 2005, approximately $1.37 million will
    acquire the three Short Range Prosecutor small boats, and $0.92 million
    will acquire the Long Range Interceptor lead boat.
        Question. The fiscal year 2005 budget request includes $12.5
    million for the surface capability sustainment and enhancement of the
    medium endurance cutter class. This request is an increase of
    approximately $5.5 million over the fiscal year 2004 funding level.
    Please explain this increase.
        Answer. This increase can be explained by the continuing
    deterioration of the legacy surface fleet and the subsequent need to
    recapitalize major subsystems to sustain their operability as projected
    within the Integrated Deepwater System. The $12.5 million for Surface
    Capability Sustainment/Enhancements in the fiscal year 2005 budget
    request will fund a Mission Effectiveness Project (MEP) for the Medium
    Endurance Cutter (WMEC) fleet. The equipment and machinery slated to be
    replaced (e.g., evaporator replacement; propulsion control system
    upgrade; oily water separator replacement; waste heat cooling system
    modifications; and renewal of auxiliary pumps) is geared towards
    extending the service life approximately 5-10 years and ensuring the
    WMECs will remain serviceable until they are retired.
        Question. Funding to begin the development and design phase of
    command, control, communications, computer, intelligence, surveillance
    and reconnaissance (C4ISR), increment 2, was provided in fiscal year
    2004. Will the funding request for fiscal year 2005 complete the
    development and design of C4ISR, increment 2? If not, how much
    additional funding would be required to complete this phase of
    development and design?
        Answer. The two C4ISR increments have two design phases. The first
    design phase is concept and preliminary design; the second design phase
    is detailed design and development. The funding provided in fiscal year
    2004 was for the detailed design and development for C4ISR Increment 1
    (the second of the two design phases for Increment 1). The funding
    requested in fiscal year 2005 is for concept and preliminary design for
    C4ISR Increment 2. In order to complete Increment 2, the detailed
    design and development portion must also be funded at approximately $30
    million.
        Questions. What is the division of program management
    responsibility between the Coast Guard and Integrated Coast Guard
    Systems (ICGS)? Is the Federal Government providing management funds to
    ICGS? How much of the total management cost does ICGS provide? What
    exactly is the fiscal year 2005 budget request of $45 million for
    systems engineering and integration? Are program management funds
    included within each Deepwater line item? If so, how is the Coast Guard
    certain that there are not any duplications in payment to ICGS?
        Answers. The Coast Guard is responsible for all Program Management
    including oversight of the contract with the prime contractor, which is
    the systems integrator in the Integrated Deepwater System (IDS)
    Program. The systems integrator, Integrated Coast Guard Systems, LC
    (ICGS) has the responsibility for Contract Management including the
    subcontractors that execute the contract.
        The Federal Government is providing Contract Management funds to
    ICGS, just as it does on all major acquisitions where a systems
    integrator is engaged to coordinate various subcontracted elements.
        Contract Management funds are provided to ICGS through the Systems
    Engineering and Integration delivery task order. The Coast Guard
    receives Program Management funding through the Government Program
    Management budget category. The division of the $83 million requested
    for these two budget items is approximately 54 percent for ICGS and 46
    percent for the Coast Guard. The $45 million budget request for Systems
    Engineering and Integration represents approximately 8 percent of the
    total contract value in fiscal year 2005, and approximately 6.6 percent
    of the Total Capital Acquisition. It must be emphasized that the
    Government Program Management and ICGS Contract Management are not the
    same thing.
        The fiscal year 2005 budget request for Systems Engineering and
    Integration provides for the following activities:
      --System of Systems Engineering including System Architecture
            development, Operational Effectiveness analysis, Total
            Ownership Cost management, and Enterprise level requirements
            management.
      --Enterprise level System Integration
      --Enterprise level System Integrator Program Management
      --Quality Assurance
      --Integrated Product and Process Development
      --Integrated Master Schedule maintenance and management
      --Aviation, Surface Vessel, C4ISR, and Logistics System Integration
            at the Enterprise level
      --Contract Management
        Delivery orders for each Deepwater asset include appropriate funds
    to execute the delivery order, just as in any other government
    acquisition. These funds would not typically be classified as Program
    Management.
        The Coast Guard ensures there is no duplication of payment by using
    detailed statements of work at both enterprise and individual asset
    levels to clearly distinguish between activities. Furthermore, ICGS'
    first tier subcontractors maintain and report via timekeeping and
    billing systems that are under the constant oversight of defense
    auditing agencies.
        Question. The fiscal year 2005 budget request includes $38 million
    for government program management. Does this request fully fund all
    program management costs? Are additional program management costs
    contained within other Deepwater line items? How many people does this
    funding request support? Is this enough to support all of the necessary
    personnel to manage the program properly?
        Answer. The $38 million for government program management combined
    with the government personnel (201 military and civilian positions)
    supporting the program (funded from the AC&I Personnel line item) meets
    the Deepwater government program management requirement in fiscal year
    2005. None of the other line items support government program
    management. Fifty percent, or $19 million, of the $38 million in
    government program management provides funding for the equivalent of
    approximately 124 contracted support personnel. The remaining 55
    percent provides funding for such items as modeling and simulation,
    operational test and evaluation, travel, training, studies, phones and
    other administrative support materials. The funding provided in the
    government program management line item and the Deepwater portion of
    the AC&I personnel line item will support the necessary personnel to
    properly manage the program at the requested funding level.

                    GAO DEEPWATER PROGRAM MANAGEMENT REPORT

        Question. In 2001, GAO reported on risks facing the Coast Guard as
    it went forward on Deepwater. Just this month, GAO again reported on
    these same risks, in particular that key components the Coast Guard
    needs to effectively manage the program and provide adequate contractor
    oversight were either missing or not fully developed. What is the Coast
    Guard's response to these criticisms?
        Answer. The Coast Guard is dedicated to the continuous improvement
    of Deepwater, welcomes GAO's expertise and guidance, and has responded
    to these management concerns by developing a Plan of Action &
    Milestones (POAM) to correct deficiencies. As part of our
    ``partnership'' with GAO we will regularly report back on the status of
    this POAM and seek their feedback.
        The specific quote in this month's GAO Report that references their
    audit of 2001 states, ``Concerns about the Coast Guard's ability to
    rely on competition as a means to control future costs contributed to
    GAO's description of the Deepwater program in 2001 as `risky.' Three
    years later, the Coast Guard has neither measured the extent of
    competition among suppliers of Deepwater assets nor held the system
    integrator accountable for taking steps to achieve competition.''
        The Coast Guard has placed particular emphasis on the ability to
    measure performance within the scope of the program. Over twenty
    measurement items have been defined and measured in the approximate 20
    months that ICGS has been under contract. Additional measures are in
    the process of being defined and measured. This effort continues to
    evolve as the program identifies measures and data sources and as the
    system components mature from design to production, fielding, and
    disposal.
        All of the Integrated Deepwater System items in the first 5 years
    of the contract were fully competed as part of the competition between
    the three industry consortiums led by Litton/Avondale Industries,
    Science Applications International Corporation, and Lockheed Martin
    Naval Electronics and Surveillance Systems. Going forward from contract
    award, the Deepwater Program has included Competition as a factor for
    determining if the contract should be approved for another term and how
    long that term should be. The measures for Competition being proposed
    for adoption include:
      --Percentage of awards competed;
      --Minimizing the number of teaming agreements;
      --Number of advertisements publicizing supplier registration;
      --Number of vendor outreach programs; and
      --Percentage of first tier subcontracts that incorporate the intent
            of the Federal Acquisition Regulation clause 52-244.5
            ``Competition in Subcontracting.''
        The Coast Guard's systems integrator, ICGS, has also adopted the
    Open Business Model, initially a Lockheed Martin philosophy, as an
    official policy for ensuring competition. The process ensures full,
    continuous, and open analysis of supplier alternatives throughout the
    program's execution.
      --This approach entails obtaining proposals/quotes from two or more
            qualified suppliers, and then balancing the cost, quality and
            delivery of the components after the qualified suppliers have
            been identified to provide the required components. This model
            provides the flexibility to capture commercial technology when
            needed, and it is projected to provide better performance at
            equal or lower cost.
      --The Open Business Model has been approved by the ICGS Board of
            Directors and is applicable to all Deepwater transactions.
      --To enforce these regulations, ICGS has appointed a Competition
            Advocate and Ombudsman tasked to draft implementation
            procedures for regular reporting to ICGS.
      --Visits by the ICGS Competition Advocate are also planned with
            Deepwater's industry partners to examine ``make/buy'' decisions
            and competition practices.
        In addition to the issue of competition, the Coast Guard is
    diligently incorporating GAO's recommendations, as well as other best-
    business practices, into its operating procedures. The Coast Guard is
    actively addressing those management practices not in place, and is
    improving and maturing processes for those that are already in
    existence. The following is a summary of recommendations by GAO for
    executive action and the Coast Guard's mitigation strategies:
      --Improve Deepwater program management--take the necessary steps to
            make Integrated Product Teams (IPTs) effective; ensure adequate
            staffing is addressed as outlined in the human capital plan
            (HCP), and ensure operators and maintenance personnel are
            prepared for the transition to new Deepwater assets.
        --We have clarified IPT roles and responsibilities over the past 20
                months and are improving processes to attain full
                competency for each IPT.
        --The personnel funding account did not allow for additional
                personnel in fiscal year 2004. Several key military billets
                have been civilianized and military personnel have been
                brought onboard out of cycle.
        --The HCP will be updated and necessary training billets will be
                budgeted in sync with the fiscal year 2006 budget cycle.
        --ICGS has recently added representatives at the key maintenance
                and logistics sites to act as the POC for all maintenance
                coordination issues.
      --Improve contractor accountability by improving award fee criteria,
            award fee assessments, system integrator accountability for IPT
            effectiveness in award fee determinations, Total Ownership Cost
            (TOC) baseline measuring cost, and criteria for TOC baseline
            adjustments.
        --We are addressing our processes for evaluating the contractor's
                performance. Five specific areas of performance were
                evaluated during the first term. Strict adherence to
                Federal Acquisition Regulations (FAR) was an overriding
                principle in all accounts.
        --The contractor award fee score is much lower than typical
                industry averages. We are confident that the Award Fee
                level was fair and represented an accurate assessment of
                contractor performance.
        --Objective measures are being introduced into the award fee
                process.
        --The Performance Measurement Plan, and in particular the Balanced
                Scorecard (BSC) Strategy Map clearly articulate how the
                objectives of the program's BSC identify input, process,
                and output measures that provide leading indicators of
                Operational Effectiveness, Total Ownership Cost, and
                customer satisfaction. BSC metrics continually measure the
                status of the program and allow for early course
                corrections if required. Deepwater, as the largest
                Performance-based acquisition in the Federal government is
                firmly anchored to metrics and can demonstrate its value to
                the taxpayer while meeting our customer's requirements.
        --The program has taken a proactive approach to contractor
                assessment to ensure that course corrections and
                adjustments can be made before the Award Term assessment in
                year four, prior to the end of the first term. An 18-month
                performance assessment was completed on February 23, and
                approved on March 4.
      --Facilitate cost control through competition with system integrator
            accountability for competition among second tier suppliers.
        --For subcontracts over $5 million, notification to the Coast Guard
                is required, to include an evaluation of the alternatives
                considered, if ICGS subcontracts out to Lockheed Martin
                and/or Northrop Grumman.
        --The Open Business Model, initially a Lockheed Martin philosophy,
                is now official ICGS policy and is applicable to all
                Deepwater transactions. To ensure compliance, ICGS has
                appointed a Competition Advocate and Ombudsman, who is
                drafting implementation procedures for regular reporting to
                ICGS and will examine Make/Buy and competition practices.
        --The program will put additional processes in place to ensure
                competitive forces are being used to manage costs. An
                annual independent third party review of transactions will
                be conducted. The Agency Acquisition Executive will review
                any subcontract over $5 million awarded to Lockheed Martin
                or Northrop Grumman.
        --A review of ICGS' application of their Open Business Model vis a
                vis accountability for ensuring competition will be
                included in the Award Term Evaluation and measured
                diligently as discussed earlier.
        Question. Similarly, GAO has reported that while competition is
    critical to controlling Deepwater program costs, the Coast Guard does
    not have a system to measure the extent of competition among suppliers
    of Deepwater assets nor has it held the system integrator responsible
    for taking steps to achieve competition. What is the Coast Guard's
    response to these criticisms?
        Answer. All of the Integrated Deepwater System nominated items in
    the first 5 years of the contract were fully competed as part of the
    competition between the three industry consortiums led by Litton/
    Avondale Industries, Science Applications International Corporation,
    and Lockheed Martin Naval Electronics and Surveillance Systems. The
    Coast Guard, the DOT, and the Office of Federal Procurement Policy
    through review and approval of the Request for Proposal indicated that
    this was appropriate competition for the first award term.
        In the current phase of the Deepwater contract the Deepwater
    Program, based on GAO's recommendations, has now included competition
    as a factor for determining if the contract should be approved for
    another term and how long that term should be. The measures for
    competition being proposed for adoption include:
      --Percentage of awards competed;
      --Minimizing the number of teaming agreements;
      --Number of advertisements publicizing supplier registration;
      --Number of vendor outreach programs; and
      --Percentage of first tier subcontracts that incorporate the intent
            of the Federal Acquisition Regulation clause 52-244.5
            ``Competition in Subcontracting.''
        The Coast Guard's systems integrator, ICGS, has also adopted the
    Open Business Model, initially a Lockheed Martin philosophy, as an
    official policy for ensuring competition. The process ensures full,
    continuous, and open analysis of supplier alternatives throughout the
    program's execution.
      --This approach entails obtaining proposals/quotes from two or more
            qualified suppliers, and then balancing the cost, quality and
            delivery of the components after the qualified suppliers have
            been identified to provide the required components. This model
            provides the flexibility to capture commercial technology when
            needed and it is projected to provide better performance at
            equal or lower cost.
      --The Open Business Model has been approved by the ICGS Board of
            Directors and is applicable to all Deepwater transactions.
      --To enforce these regulations, ICGS has appointed a Competition
            Advocate and Ombudsman tasked to draft implementation
            procedures for regular reporting to ICGS.
      --Visits by the ICGS Competition Advocate are also planned with
            Deepwater's industry partners to examine ``make/buy'' decisions
            and competition practices.

                              SMALL BOAT STATIONS

        Question. What challenges are small boat stations facing in
    balancing search and rescue requirements with new homeland security
    requirements?
        Answer. Broadly, the Coast Guard will continue seeking the
    appropriate balance among all its mission-programs while relentlessly
    pursuing our stated performance goals. In so doing, the Coast Guard
    will continue to focus not only on activity levels (hours), but also on
    achieving the desired outcomes for each Coast Guard mission. Our
    ability to achieve desired outcomes and performance goals have been
    significantly enhanced through improved technology, tactics and
    procedures making our activities that much more effective. Risk-based
    decision-making by local commanders will continue to be the primary
    driving factor behind the specific activity levels (hours) accrued in
    the course of Coast Guard operations.
        At the Station level, the biggest challenges in balancing search
    and rescue (SAR) and homeland security (HLS) requirements are training
    and maintaining the 68-hour workweek standard. There are two primary
    factors that will improve training while maintaining the 68-hour
    workweek standard at Stations: formal training programs and experienced
    command cadre. In fiscal year 2003 and fiscal year 2004, the President
    and Congress provided funding for the Coast Guard to improve both
    areas.
        Formal Training.--The Coast Guard's goal is to increase Boatswain
    Mate ``A'' school throughput by 50 percent over the next 4 years. We
    have also increased recurring proficiency requirements giving qualified
    boat crewmembers more opportunities to practice necessary skills. In
    addition, we have increased the throughput at our resident training
    centers for Small Boat Coxswains, Heavy Weather Coxswains, and Surfmen
    removing some of the training burden from the field units.
        These formal training opportunities provide a strong basic
    foundation for junior personnel. This strong foundation allows the
    command cadre to spend less time teaching basic fundamentals and more
    time teaching job specific tasks.
        Experienced Command Cadre.--The Coast Guard used many of the new
    billets provided by the President and Congress to upgrade senior
    command cadre billets. Additional support billets were also provided at
    both Stations and Groups to relieve the command cadre of administrative
    burdens. These actions were focused on improving management and
    leadership, and providing more time for the command cadre to conduct
    training. Once all of the new billets are filled this year and
    personnel are qualified in their assignments, we anticipate improved
    training and reductions in the average workweek.
        Question. What impact have the additional homeland security
    requirements had on the small boat stations' ability to meet other
    mission requirements, such as drug interdiction and fisheries
    enforcement?
        Answer. Immediately following 9/11, the Coast Guard surged
    resources for homeland security activities. Over the past 2 years, the
    President and Congress have funded the Coast Guard with additional
    resources to address homeland security and all other mission
    requirements.
        As required by Congress, some of these initiatives supported
    Station-level staffing, training, boat standardization, and readiness
    for all missions. Other initiatives were geared specifically toward the
    search and rescue program. The Coast Guard will continue to monitor the
    operating tempo and workload at Stations, and we will work within the
    Administration if additional resources are necessary. We will also use
    all of the resources as intended by the Congress.
        Fishery Enforcement.--Stations continue to contribute significantly
    to the Coast Guard fishery enforcement mission. In fiscal year 2002,
    Stations conducted 974 fisheries enforcement boardings. In fiscal year
    2003, Stations conducted 1,313 fisheries enforcement boardings, a 35
    percent increase over fiscal year 2002 levels. These boardings
    contribute the Coast Guard's domestic fishery program goals.
        Counter-Drug Operations.--The Coast Guard's overall counter-drug
    strategy is to interdict drugs offshore, far from the U.S. border.
    Coast Guard Cutters and Aircraft are primarily used for conducting
    these offshore patrols, however, Stations continue to respond to both
    counter-drug and migrant incidents when necessary.
        Question. Given the increased operating tempo of small boat
    stations following September 11th, do stations have the resources--i.e.
    staff and boats--they need to fulfill all their mission needs? What
    additional resources, if any, are most needed?
        Answer. In fiscal year 2003 and fiscal year 2004, the President and
    Congress provided funding for Stations to maintain a high level of
    service in a busy operating environment. Funding was provided for the
    Coast Guard to add or upgrade over 900 billets at Stations and the
    training and support facilities that serve them. Additionally, over
    $5.5 million of Personal Protective Equipment was provided for Station
    personnel with earmark and supplemental funding. Over 200 Response
    Boat--Smalls were also funded increasing operational capability. As
    required by Congress, these initiatives supported Station-level
    staffing, training, and readiness for all mission areas.
        The President and Congress have also provided substantial funding
    since 9/11 specifically for homeland security. The Coast Guard has used
    some of this funding to purchase seventeen additional 87 foot Coastal
    Patrol boats, 13 Maritime Safety and Security Teams, and over 100 Sea
    Marshals. These new assets have helped reduce the high operating tempo
    observed at Stations immediately following 9/11. The President's fiscal
    year 2005 budget requests operating funds for five 179-foot Patrol
    Coastals providing additional resources to the Coast Guard.
        The Coast Guard will continue to monitor the operating tempo and
    workload at Stations, and we will work with the Administration if
    additional resources are necessary.
        Question. Inspector General reports have raised concerns about the
    lack of senior personnel available at boat stations in recent years to
    train new, or more junior personnel. As Coast Guard increases the
    number of new personnel assigned to stations in fiscal year 2004, what
    impact will this have on stations operations, including the ability of
    senior personnel to train less experienced staff?
        Answer. In fiscal year 2003 and fiscal year 2004, the Coast Guard
    addressed the impact of senior personnel having to train less
    experienced staff by upgrading many senior command cadre positions,
    providing additional administrative support to Stations, and assigning
    additional staff to Groups.
        These actions are focused on improving management and leadership,
    and reducing the administrative burden on the command cadre. In
    addition, we have increased the throughput at our resident training
    centers to remove some of the training burden from the field units. The
    Coast Guard continues assessing the impact of these changes to
    determine what actions, if any, are needed in the future.
        The following highlights specific training efforts discussed above:
      --Established one Ready Boat-Small Standardization (STAN)/Training
            Team to improve training, professionalism and performance.
      --Added a dedicated course developer/writer/instructor to Training
            Center Yorktown Coxswain ``C'' School.
      --Added Surfman Apprentices to the National Motor Life Boat School
            (NMLBS) to reduce the training burden at surf stations and
            increase the number of qualified Surfmen.
      --Added 41 FTP for Boatswain Mate (BM) `A' School throughput
            increases.
      --Added 18 FTP for NMLB School Training throughput increases.
        Question. What steps has the Coast Guard taken to address the issue
    of its aging 41-foot utility boat fleet, which is reaching the end of
    its service life?
        Answer. The Coast Guard's fiscal year 2005 funding request includes
    $12 million to begin a limited production of six Response Boats-Medium
    (RB-M). The RB-M is the replacement for the aging 41-foot utility boat
    fleet. After initial limited production, the Coast Guard currently
    projects $140 million in additional funding needs for RB-M in the Five
    Year Capital Investment Plan, which accompanied the President's fiscal
    year 2005 Budget request for Coast Guard.
        Question. What progress has the Coast Guard made in standardizing
    its non-standard boat fleet?
        Answer. Since fiscal year 2002, the Coast Guard has ordered 255
    Response Boat--Smalls. A large majority of these boats were purchased
    to enhance the Coast Guard's maritime homeland security capability in
    critical ports; however, some have been purchased to replace non-
    standard boats. By the end of fiscal year 2004, approximately 100 of
    the 350 total Non-Standard Boats will be replaced. We expect to replace
    approximately 12 percent per year thereafter until full replacement in
    fiscal year 2010.

                           PORT SECURITY ASSESSMENTS

        Question. Is the Coast Guard on track to complete the Port Security
    Assessments of the 55 most critical ports in the United States by the
    end of this calendar year? Are additional funds necessary to complete
    these assessments?
        Answer. The Coast Guard has conducted PSAs at 16 of the 55 top
    economically and militarily strategic U.S. ports. The remaining 39 port
    assessments are on schedule, funded and scheduled for completion in
    calendar year 2004.
                   research, development, test and evaluation
        Question. Please explain the approximately $1.4 million decrease in
    requested funding for the Coast Guard's research, development, test and
    evaluation account?
        Answer. Prior year CG Research & Development (R&D) appropriations
    included project funds in addition to operating costs of the CG R&D
    Center at Avery Point, CT. The $13.5 million requested in the fiscal
    year 2005 Science and Technology (S&T) budget does not include any
    project funds; the request is intended to fund only facility and
    personnel (support and technical) costs at the CG R&D Center. This
    level is consistent with prior year costs and does not represent a
    decrease given its intent.
        The fiscal year 2004 enacted level of $14.9 million was a
    significant reduction from the fiscal year 2004 request of $22 million
    and prior year appropriations causing a fiscal year 2004 imbalance
    between support costs (facility and personnel) and project funding with
    only approximately $2 million available for fiscal year 2004 project
    support. The CG is working with S&T to restore a proper funding balance
    in fiscal year 2005 and beyond and to develop a project portfolio that
    supports the many maritime security needs as well as the CG's
    ``traditional'' non-security mission-programs. Additional project
    funding will be critical to properly support mission needs and regain
    the R&D momentum lost in fiscal year 2004, particularly in areas such
    as Aquatic Nuisance Species and ballast water research. S&T and the CG
    have already agreed upon a base level of additional project funding in
    the amount of $5 million (for a total of $18.5 million) that will be
    targeted toward non-security related projects including maritime
    science and research.
        Question. Will this line item for Coast Guard research and
    development continue to be decreased in subsequent fiscal years until
    there is one lump-sum research and development account within Science
    and Technology for all of the agencies at the Department of Homeland
    Security?
        Answer. No. The Science and Technology Directorate (S&T) and Coast
    Guard (CG) are preparing a formal agreement that will detail the
    coordination and funding mechanisms for future CG Research &
    Development (R&D) capabilities. The foundation for that agreement is
    the consolidation of funding requested in the fiscal year 2005 budget
    ($13.5 million). S&T and the CG have further agreed upon a base level
    of additional project funding in the amount of $5 million that will be
    specifically targeted toward non-security related projects including
    maritime science and research. This funding will support CG mission-
    programs such as Marine Environmental Protection, Living Marine
    Resources, Search and Rescue, Aids to Navigation and Marine Safety. The
    specific projects in support of these mission-programs will be prepared
    annually for S&T concurrence.
        In addition to this $18.5 million in funding, the Coast Guard will
    submit security-related research requests through S&T for coordination
    across all portfolios and DHS components. The Coast Guard has submitted
    a maritime security R&D portfolio detailing approximately $50 million
    in vital maritime security research initiatives. This portfolio has
    been validated by S&T portfolio managers and will be considered in the
    development of future spending priorities and commitments from S&T.
    Project funding levels for CG and other DHS component requests will
    depend on the risk and cost associated with the project, effect on
    agency missions, linkage to S&T strategic objectives, and
    executability.
        Question. How will consolidating the research and development
    account into the Science and Technology Directorate affect the Coast
    Guard in general, in terms of control over research projects of
    particular interest to the Coast Guard and access to all ongoing
    research at the Department?
        Answer. Through its portfolio manager at S&T, the CG will have
    direct access to, and visibility of, all S&T research and initiatives.
    While funding will be provided through S&T, the CG will retain control
    of the projects in support of its non-Security mission programs. The
    integration of funding and effort will go far to minimize redundancy
    and maximize the effectiveness of Coast Guard R&D while ensuring that
    all Coast Guard mission requirements remain a key part of S&T planning
    and resource decisions.
        Question. How will this consolidation directly affect the Coast
    Guard Research and Development Center in Groton, Connecticut?
        Answer. Unrelated to the funding consolidation, the CG is working
    through the GSA to relocate its Research and Development Center from
    Groton to a nearby, although not yet identified, location in
    southeastern Connecticut. The lease for the current facility expires in
    fiscal year 2006 and cannot be renewed. Even if the current lease could
    be renewed, the existing facility is unsatisfactory (e.g. not meeting
    OSHA code requirements) for a variety of reasons and would not be
    renewed.
        Science & Technology (S&T) has no current plans to make other
    changes to the location or personnel staffing levels of the CG Research
    & Development (R&D) Center.

                             ALTERATION OF BRIDGES

        Question. Since the fiscal year 2004 funding did not complete the
    ongoing bridge projects, how does the Coast Guard intend to continue
    and begin to complete certain bridge projects without additional funds
    in fiscal year 2005?
        Answer. The Coast Guard's Alteration of Bridges request is zero in
    fiscal year 2005, because the three bridges currently under
    construction: the Florida Avenue Bridge in New Orleans, Louisiana; the
    Sidney Lanier Bridge in Brunswick, Georgia; and, the Limehouse Bridge,
    in Charleston County, South Carolina, are highway or combination
    highway/railroad bridges, and are eligible for funding from the Federal
    Highway Administration's Federal-Aid Highway program. Additionally,
    there are five bridge projects with completed designs for alteration:
    the Burlington Northern Santa Fe Bridge in Burlington, Iowa; the
    Burlington Northern Santa Fe Bridge in Fort Madison, Iowa; the Chelsea
    Street Bridge in Boston, Massachusetts; the EJ&E Bridge in Divine,
    Illinois; and, the CSXT (14 Mile) Bridge in Mobile, Alabama. These
    projects will not proceed to construction until approximately 75
    percent of the total estimated cost to alter the bridge is available.
        Question. If no additional funding is provided in fiscal year 2005
    for the Alteration of Bridges, what will happen to the ongoing bridge
    projects?
        Answer. Depending on construction progress and the rate at which
    billings are made against the projects, the funding for any one of
    three bridges currently under construction: the Florida Avenue Bridge
    in New Orleans, Louisiana; the Sidney Lanier Bridge in Brunswick,
    Georgia; and, the Limehouse Bridge, in Charleston County, South
    Carolina, may be depleted. At least 30 days prior to depletion of
    funds, the Coast Guard would give written notice to the bridge owner of
    such exhaustion of funds, consistent with the ``Order of Apportionment
    of Cost''. After receipt of such notice, the owner may continue the
    work with the understanding that no payment for such work will be made
    by the Coast Guard until additional Federal funds become available. If
    the owner elects not to bear the costs, the project would likely have
    to come to a halt, resulting in contract disruption, increased
    contractual costs, and the bridge potentially remaining a hazard to
    navigation.
        In addition, the remaining 11 bridges, for which an Order to Alter
    has been issued, will not proceed to the next phase of development. The
    following table provides a summary of the status of all active Truman-
    Hobbs bridge alteration projects.

        Question. Could the Coast Guard be forced, by a court of law, to
    complete bridge projects which had been started because the bridges
    were deemed to be an obstruction to navigable waters by law?
        Answer. Although litigation is a possibility, the Coast Guard does
    not have authority to fund bridge alteration absent a specific
    appropriation from Congress. Therefore, the Coast Guard does not
    believe a court could force it to complete a bridge project, absent an
    appropriation. Also, the bridge owner cannot claim to have relied on
    the Coast Guard funding any amount of the project above the amount
    specified in the Order of Apportionment of Cost. The Order of
    Apportionment of Cost further states: ``Should it become apparent that
    appropriated funds will be exhausted before additional funds are made
    available, the Coast Guard will give at least 30 days written notice to
    the bridge owner of such exhaustion of funds.'' After receipt of such
    notice, the owner may continue with the work with the understanding
    that no payment for such work will be made by the Coast Guard until
    additional Federal funds become available. Since Congress placed the
    program under the Coast Guard's control in 1967, no bridge owner has
    filed a lawsuit to compel the Coast Guard to complete a bridge
    alteration project, because no project has been halted for lack of
    funding.

                                 OIL PLATFORMS

        Question. How much does the Coast Guard spend each year conducting
    emergency medical evacuations of personnel from oil platforms located
    in the Gulf of Mexico? Does the energy industry share any of this cost?
    If not, at what point should the energy industry bear some of the cost
    and personnel burden to perform the medical evacuations of their
    employees?
        Answer. The Coast Guard is unable to determine how much it spends
    each year conducting emergency evacuations to oil platform employees.
    Many of the medical evacuations from oil platforms are persons injured
    aboard vessels and brought to nearby platforms for evacuation. The
    Coast Guard proposes this action when practicable, as it is often safer
    to land on the platform to load the patient for transport than it is to
    hoist the individual from a vessel, especially in poor sea conditions.
    The Coast Guard does not record medical evacuation information
    distinguishing between oil platform employees and persons injured at
    sea who were brought to the platform.
        Industry normally shares the cost when an injury occurs on an oil
    platform and an industry supported or procured commercial helicopter at
    the platform, or at a nearby platform, provides transportation to
    medical facilities ashore. If a commercial helicopter is not available,
    or is unable to fly due to poor weather conditions, the Coast Guard
    generally provides the medical evacuation.
        Medical evacuations from oil platforms make up a small percentage
    of cases in this region. In the past 12 months, the Coast Guard has
    conducted a total of 200 medical evacuations in that region, 13 of
    which were from oil platforms. A medical evacuation at sea is
    considered search and rescue, a traditional Coast Guard mission. The
    Coast Guard does not charge or accept charges for search and rescue.
        Lastly, on a purely voluntary basis, the oil platforms have allowed
    Coast Guard helicopter to refuel at their platforms, which greatly
    extends the range of the HH-65. This ``good Samaritan'' refueling
    ability pays huge dividends, making Coast Guard operations possible at
    much greater distance from shore.
        Question. Are any critical Coast Guard missions set-aside or
    overlooked in favor of medical evacuations from the oil platforms in
    the Gulf of Mexico? How many man hours are devoted to this task?
        Answer. No, there are no missions that are set-aside or overlooked
    in favor of medical evacuations from oil platforms. The Coast Guard
    performs a small number of medical evacuations from oil platforms. In
    the past year, only 13 of the 200 medical evacuations that occurred in
    this region were from oil platforms.
        In most cases, when an injury occurs on an oil platform an industry
    supported or procured commercial helicopter at either the platform or
    at a nearby platform provides the transportation to medical facilities
    ashore. However, in the event a commercial helicopter is not available,
    or poor weather conditions preclude the use of commercial helicopters,
    the Coast Guard will be contacted and will dispatch a resource to
    provide the medical evacuation depending upon the seriousness of the
    injury. A medical evacuation at sea is considered SAR and is a critical
    Coast Guard mission.
        The Coast Guard is unable to determine the man-hours devoted to
    evacuating oil platform employees. Many of the medical evacuations are
    persons injured aboard vessels and brought to nearby platforms for
    evacuation. The Coast Guard proposes this action when practicable, as
    it is often safer to land on the platform to load the patient for
    transport than it is to hoist the individual from a vessel, especially
    in poor sea conditions. The Coast Guard does note record medical
    evacuation information distinguishing between oil platform employees
    and persons injured at sea who were brought to the platform.
        Lastly, on a purely voluntary basis, the oil platforms have allowed
    Coast Guard helicopter to refuel at their platforms, which greatly
    extends the range of the HH-65. This ``good Samaritan'' refueling
    ability pays huge dividends, making Coast Guard operations possible at
    much greater distance from shore.
                gulf coast maritime domain awareness initiative
        Question. There is a concern in the Gulf of Mexico with Maritime
    Domain Awareness, as well as the need for developing a Common Operating
    Picture for offshore energy facility security and protection of key
    port and critical infrastructure. What are the Coast Guard's plans to
    help address this concern?
        Answer. The Coast Guard will install Automatic Identification
    System (AIS) sensors on platforms that span the Gulf of Mexico from
    Port Isabel to Mobile, AL. Partnerships will be created with the
    platform owners to begin collecting AIS data by the end of fiscal year
    2004. Plans for the second phase of this project include adding radar
    and ancillary sensors. All sensor data will be integrated into the
    Common Operational Picture (COP) that will be displayed at the Eighth
    District Command Center in New Orleans, the Joint Harbor Operations
    Centers, and Sector Command Centers along the Gulf Coast.
        Further technological enhancements already planned to improve
    interoperability and coordination include Rescue 21, implementation of
    the Global Maritime Distress and Safety System (GMDSS), and the Ship
    Security Alert System.
        Partnerships and teaming efforts are in place to create a community
    of stakeholders with resources to help prevent security incidents in
    ports and around platforms. Working through the Area Maritime Security
    Committee (AMSC), a part of the Gulf Security Committee, we are
    improving communication among offshore platform operators and the Coast
    Guard. Outreach efforts with Homeland Security and Homeland Defense
    partners to create coordinated response procedures are being devised.
        Question. Does the Coast Guard support using existing technologies,
    such as the Navy's Littoral Surveillance System, to demonstrate
    potential dual use Homeland Security applications to help support the
    mission?
        Answer. The Coast Guard fully supports using existing technologies
    to expand Maritime Domain Awareness where appropriate. We are
    evaluating several existing technologies to expand MDA, including the
    Littoral Surveillance System (LSS). Other systems under review include
    Network Centric Collaborative Targeting (NCCT) and Global Network-
    Centric Surveillance and Targeting (GNCST).
        Part of the Coast Guard's MDA effort includes the development and
    fielding of a Common Operational Picture (COP). The COP operates with
    the Global Command and Control System--Joint architecture. Any systems
    adopted for homeland security, must be interoperable and compatible
    with this architecture.
        Overall, the LSS provides limited capability when compared to other
    systems and it is not currently compatible with the Global Command and
    Control System-Joint Architecture. There are other systems that provide
    greater capability, such as, the planned Gulf of Mexico project (which
    includes a NCCT component) and the Hawkeye system that provide port
    surveillance and tracking functionality. The Coast Guard is partnering
    with the Office of Naval Research to work on these initiatives.
                                     ______

                   Questions Submitted by Senator Ted Stevens

        Question. The Trans-Alaska Pipeline System provides 20 percent of
    the Nation's domestic crude oil and 48 percent of the West Coast fuel
    supply through the Port of Valdez. Does the Coast Guard have adequate
    armed helicopter surveillance to protect the vessels moving through the
    Prince William Sound? If the Coast Guard is intends to arm MH-60
    helicopters with M-240 machine guns and sniper rifles, how will this be
    achieved without negatively impacting the missions that these assets
    are performing?
        Answer. The Coast Guard does not currently have armed helicopter
    surveillance of vessels moving through Prince William Sound. The Coast
    Guard conducted a surge operation, during a period of increased
    national threat (orange) to the Homeland, to protect tankers moving
    thru Prince William Sound (PWS) and in and out of Valdez, AK. The Coast
    Guard deployed a MH-68 Helicopter Interdiction Tactical Squadron
    (HITRON) helicopter to CG Air Facility Cordova. This short-term
    deployment was in response to validated intelligence and not to an
    increase in the national threat level.
        The Coast Guard is also taking additional measures to protect
    vessels transiting Price William Sound. Since 9/11/01, three response
    boats have been located to Valdez. In August of 2003, the cutter LONG
    ISLAND was relocated from San Diego, CA to Valdez, AK. Additionally, a
    Marine Safety and Security Team will be established in Anchorage later
    this year.
        The Coast Guard's long-term plan is to add Airborne Use of Force
    (AUF) capability to all organic helicopters. Arming HH-60 helicopters
    doesn't detract from their ability to conduct all USCG missions.
    Rather, it provides Coast Guard operational Commanders an additional
    capability to counter imminent homeland security threats that currently
    does not exist in the service's main-stream helicopter fleet.
        Question. Alaska is slated to receive a Maritime Safety and
    Security Team (MSST) by the end of fiscal year 2004. Will this team
    require armed helicopter support for its missions?
        Answer. Currently there are no plans for mandating that the
    Maritime Safety and Security Team (MSST) have dedicated armed
    helicopter support to perform their missions. The Coast Guard
    recognizes the inherent advantage of Airborne Use of Force (AUF) and is
    exploring this in conjunction with the development of enhanced law
    enforcement counter terrorism capabilities. The Coast Guard requests
    $1.8 million for armed helicopters in fiscal year 2005 to begin
    prototyping AUF aboard the HH60J helicopters in Cape Cod, MA. The
    intent is to arm all Coast Guard helicopters in the future. The HH65
    helicopter will require upgraded engine power to accommodate the
    increased weigh of AUF weapons and armor, which should be accomplished
    coincident to a safety and reliability upgrade of the powertrain over
    the next 18-24 months. The HH-60J has sufficient power margins to
    execute the AUF mission now. HH60J units are located strategically
    throughout the United States, including Kodiak and Sitka, Alaska.
        Question. What steps is the Coast Guard taking to ensure that
    necessary support facilities are available for the forward deployment
    of C-130s to Shemya, Galena, or Cold Bay during the high threat season
    along the MBL?
        Answer. The Coast Guard regularly deploys C-130 aircraft to Shemya
    and Galena for Maritime Boundary Line (MBL) and High Seas Drift Net
    (HSDN) enforcement patrols. Similarly, HH-60 aircraft deploy to Cold
    Bay for Bering Sea Crab for Search and Rescue (SAR) standby. These
    airfields are also used periodically outside these deployments. All
    three airfields are vital to mission performance.
        The Coast Guard has found the facilities to be adequate over the
    last several years. During regular deployments to these airfields,
    Coast Guard aircrews evaluate the support facilities and work with the
    air facility directly to address these issues. Prior to deploying,
    facility assessments are conducted ensuring all requirements are met
    for the upcoming deployment.
        Question. The City of Valdez is currently in the process of
    completing a feasibility study for constructing a new harbor basin.
    Does the Coast Guard have shore side infrastructure needs that should
    be incorporated into the City of Valdez's plan?
        Answer. The Coast Guard has shore side and waterfront
    infrastructure needs in Valdez for small boat forces and the USCGC LONG
    ISLAND; a 110-foot patrol boat. The Coast Guard is currently evaluating
    shore infrastructure alternatives at Valdez to meet current and
    projected needs including construction on existing Coast Guard
    property, as well as possible integration into the City of Valdez
    Harbor Basin Project should the City of Valdez decide that a new harbor
    basin is feasible. The Coast Guard will consider the timeliness and
    overall cost of the various alternatives and related impacts to current
    and projected Coast Guard missions prior to deciding on a preferred
    alternative.
        Question. The fiscal year 2005 Homeland Security budget request
    provides $152,000 to begin implementation of the Maritime
    Transportation Security Act of 2002 (MTSA) in Alaska. Will the Coast
    Guard's implementation of the MTSA require commercial fishing vessels
    and other vessels over 65 feet to purchase Automatic Identification
    System equipment?
        Answer. Yes. Automatic Identification System (AIS) equipment will
    eventually be required onboard commercial vessels greater than 65 feet
    in length with the exception of passenger vessels certified to carry
    less than 151 passengers-for-hire (they will not be required to carry
    AIS). AIS will also be required onboard towing vessels of 26 feet or
    more in length and more than 600 horsepower, in commercial service,
    while navigating in a Vessel Traffic Service (VTS) area. With the
    exception of fishing vessels greater than 65-feet in length, the above
    vessels will be required to have AIS equipment not later than December
    31, 2004. Fishing vessels greater than 65 feet in length will not be
    required to carry the AIS equipment until December 31, 2005.
        Question. The fiscal year 2005 budget for Homeland Security
    transfers the Coast Guard's research and development funding to the
    Science and Technology Directorate. The fiscal year 2005 budget
    proposes to reduce Coast Guard RDT&E to $13,500,000, a reduction of
    $1,400,000 from fiscal year 2004 enacted levels. What impact will this
    reduction and transfer have on the Coast Guard's ability to develop new
    technologies to help maintain traditional missions in accordance with
    Section 888 of the Homeland Security Act?
        Answer. The Science and Technology Directorate (S&T) and CG are
    preparing a formal agreement that will detail the coordination and
    funding mechanisms for CG R&D capabilities in fiscal year 2005 and
    beyond. The foundation for that agreement will be the consolidation of
    funding requested in the fiscal year 2005 budget. For fiscal year 2005,
    the CG R&D center facility, personnel and maintenance expenses will be
    funded through S&T in the amount of $13.5 million. In addition, S&T and
    the CG have agreed upon a base level of additional project funding in
    the amount of $5 million that will be specifically targeted to support
    ``traditional'' CG mission-programs such as Marine Environmental
    Protection, Living Marine Resources, Search and Rescue, Aids to
    Navigation and Marine Safety. The specific projects in support of these
    mission-programs will be prepared annually for S&T concurrence.
        In addition to this $18.5 million in funding, the Coast Guard will
    submit security-related research requests through S&T for coordination
    across all portfolios and DHS components. The Coast Guard has submitted
    a maritime security R&D portfolio detailing approximately $50 million
    in vital maritime security research initiatives. S&T portfolio managers
    have validated this portfolio. While not yet funded, it will be
    considered in the development of future spending priorities and
    commitments from S&T.
        Provided that CG mission requirements totaling $18.5 million are
    adequately addressed and funded, the integration of funding and effort
    within S&T will go far to minimize redundancy and maximize the
    effectiveness of CG R&D while ensuring that all CG mission
    requirements, as outlined in Section 888 of the Homeland Security Act,
    remain a key part of S&T planning and resource decisions.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                                 MISSION HOURS

        Question. Based on the most recent quarterly report on mission
    hours, the Coast Guard continues to dedicate less time to traditional
    missions compared to pre-September 11, 2001 levels. However, the Coast
    Guard continues to meet or exceed performance goals in those areas.
    What are the reasons for maintaining or exceeding performance standards
    in non-homeland security mission areas when mission hours dedicated to
    those areas have decreased since September 11, 2001? Please include
    specific technology that has improved performance, improved
    intelligence mechanisms, and efforts to partner with other Federal,
    State and local partners that have improved performance.
        Answer. Based on measurements in fiscal year 2003, the Coast Guard
    met its performance goals in each non-homeland security program area.
    In many mission program areas the Coast Guard is leveraging emerging
    technology, intelligence, and partnerships with other Federal, State
    and local governments to increase or maintain specific performance with
    fewer dedicated resource hours than historical standards. Specific
    examples include:
        Emerging Technologies.--Night Vision Goggles used by cutter,
    aircraft and maritime safety and security team personnel allow for safe
    operations and enhanced ability to detect objects in the water during
    nighttime Search and Rescue operations. Self Locating Datum Marker
    Buoys used in the search and rescue program provide up to date data
    that can be used to better determine where to begin a search. The Coast
    Guard intends for this technology to improve both search effectiveness
    and efficiency. Boarding officers and marine inspectors are using
    Personal Digital Assistants (PDAs) to conduct and record their work.
    The Coast Guard expects that using PDAs will reduce redundant paperwork
    and facilitate electronic database entries.
        Intelligence Improvements.--The placement of Field Intelligence
    Support Teams to provide tactical intelligence support to Coast Guard
    operational commanders by collecting and reporting suspicious or
    criminal activity, communicating with other agencies at the local
    level, and rapidly disseminating intelligence to the Captain of the
    Port other local commanders and the Coast Guard intelligence program.
    New Intelligence Centers were created in 2003; two Maritime
    Intelligence Fusion Centers have been sited in Atlantic and Pacific
    Areas. These centers increase collection and analytical capabilities
    enhancing the Coast Guard's ability to fuse intelligence from various
    sources and improve the timeliness and quality of theater-level
    intelligence support to Coat Guard operational forces. In 2001 the
    Coast Guard joined the United States Intelligence Community (IC), a
    federation of executive branch agencies and organizations that work
    separately and together in intelligence-gathering activities.
        Partnerships.--Interagency Flight Schedules--In Miami, the Coast
    Guard and the Immigration and Customs Enforcement office have developed
    a combined flight schedule to integrate patrol schedules and assets,
    which has led to less overlap in response efforts, saving time and
    resources for both agencies. This not only provides efficiencies to
    security patrols but also frees up Coast Guard assets for non-homeland
    security missions. Partnerships with organizations such as the U.S.
    Power Squadron and Boat United States enable the Coast Guard to
    distribute information on safe boating practices to the recreational
    boating public. These efforts also advocate for public boating
    education, which has been shown to lead to improved boating safety. The
    National Marine Fisheries Service is providing the Coast Guard access
    to their National Vessel Monitoring System (N-VMS) data, enabling the
    Coast Guard to better maintain surveillance of fishing fleets and
    respond to illegal activity. This partnership is allowing the Coast
    Guard to allocate enforcement resources more effectively.
        Question. The Commandant testified that with the budget increases
    received since fiscal year 2003 and with the increase included in the
    fiscal year 2005 request, the Coast Guard will be close to levels in
    place before September 11, 2001 in its traditional mission areas. Since
    the Coast Guard is already meeting or exceeding performance goals in
    traditional mission areas with less hours dedicated to those missions,
    is the Coast Guard adjusting performance goals upward to accommodate
    for the additional hours that will be dedicated to those areas? If so,
    please be specific. If not, why?
        Answer. The Coast Guard will continue to seek the appropriate
    balance among all its mission-programs and relentlessly pursue our
    stated performance goals. The Coast Guard will continue to focus not
    only on activity levels (hours) but also on achieving the desired
    outcomes for each Coast Guard mission. Our ability to achieve desired
    outcomes and performance goals can be significantly enhanced through
    improved technology, tactics and procedures making our activities that
    much more effective. Risk-based decision-making by local commanders
    will continue to be the primary driving factor behind the specific
    activity levels (hours) accrued in the course of Coast Guard
    operations.
        The Coast Guard's fiscal year 2005-2009 budget request highlights
    improvements in performance targets for most of the Coast Guard's non-
    homeland security missions, again driven by desired outcomes and not
    solely resource hours. For example:

    ----------------------------------------------------------------------------------------------------------------
                                                                        Fiscal year
                                     -------------------------------------------------------------------------------
                                           2005            2006            2007            2008            2009
    ----------------------------------------------------------------------------------------------------------------
    SAR (percent)...................              86              87              87              87              88
    Marine Environmental Protection.              40              40              38              37              35
    Aton............................           1,831           1,748           1,664           1,600           1,535
    ----------------------------------------------------------------------------------------------------------------
    SAR--Percent of mariners whose lives are in distress that are saved.
    Marine Environmental Protection--Number of spills (>100 gallons) per 100 million.
    Tons of Oils and Chemicals shipped.
    Aton--5-year average number of collision, groundings, and allisions (striking a fixed object).

                             OPERATION NOBLE EAGLE

        Question. Since the attacks of September 11, 2001, the U.S.
    military has been providing domestic air support for homeland defense
    purposes. In public discussions, NORTHCOM General Ralph Eberhart said
    that the Department of Defense was reviewing whether there should be a
    similar function in place to support Coast Guard efforts in U.S.
    waters. Is such a plan being discussed with the Coast Guard and what
    benefits would be gained from U.S. military support?
        Answer. Collaboration continues to grow in the area of Maritime
    Domain Awareness. Several steps have been taken toward establishing a
    cohesive national strategy to achieve Maritime Domain Awareness, such
    as establishing a Navy-Coast Guard steering group and the co-sponsoring
    of an Assistant Secretary of Defense of Homeland Defense--DHS National
    Maritime Domain Awareness Summit scheduled for May 7, 2004. Maritime
    Domain Awareness is a mutual effort of the DHS, the DOD, and the entire
    Intelligence Community. Inherent to our increased awareness will be
    efforts to improve our national ability to respond to all threats in
    the maritime environment. Much work has been done to streamline the
    process of providing DOD assets to the Coast Guard when the situation
    warrants. These efforts are ongoing and have not yet been fully
    implemented. Also, an agreement that will allow Coast Guard forces to
    execute defense missions quickly is close to implementation. Both of
    these initiatives contribute to a growing integration of effort between
    the DHS and DOD. Together, NORTHCOM, the U.S. Navy, and the U.S. Coast
    Guard, Immigration and Customs Enforcement, Customs and Boarder
    Protection, and Transportation Security Administration are working
    collaboratively to fashion a more secure maritime environment for the
    nation.

                           SUPPORTING EFFORTS IN IRAQ

        Questions. The fiscal year 2004 supplemental appropriations act
    provided $80 million to the Coast Guard for continued operations in
    Iraq. The Coast Guard currently maintains four 110 foot patrol boats, a
    port security unit, and other support personnel for operations in Iraq.
    There are approximately 375 personnel dedicated to Operation Iraqi
    Freedom.
        What is the monthly cost to support and operate these assets? When
    will the $80 million provided in the fiscal year 2004 supplemental be
    depleted? The Secretary testified earlier this year that there will not
    be a supplemental spending request this year for the Department. Will
    the Coast Guard be able to cover operational expenses related to assets
    dedicated to Operation Iraqi Freedom in fiscal year 2004? If Coast
    Guard assets are needed to maintain support for Operation Iraqi Freedom
    in fiscal year 2005, what will the total cost be to operate and support
    those assets?
        Answer. The average monthly cost to support and operate Coast Guard
    Assets funded via the 2004 Emergency Supplemental Appropriation
    supporting the Global War on Terrorism is approximately $6.7 million
    per month.
        The $80 million provided to the Coast Guard in the fiscal year 2004
    Emergency Supplemental, via transfer from the Navy, will be completely
    obligated by September 30, 2004.
        The Coast Guard will be able to cover current operational expenses
    related to missions, assets and personnel dedicated to the Global War
    on Terrorism (including Operation Iraqi Freedom and Operation Enduring
    Freedom) in fiscal year 2004.
        At the current level of Coast Guard participation in term of assets
    and personnel requirements, the Coast Guard estimates it will cost
    between $95 million to $105 million to operate and support the Global
    War on Terrorism (including Operation IRAQI FREEDOM and Operation
    ENDURING FREEDOM) in fiscal year 2005. The Coast Guard is continuing to
    work with the Department of Defense and the Department of Homeland
    Security to further refine fiscal year 2005 mission tasking in support
    of the Global War on Terrorism and the overall resources required to
    support these operations.

                     DEEPWATER AWARDS TO PRIME CONTRACTORS

        Questions. According to a recent report by the General Accounting
    Office, the Coast Guard does not have the capability to assess the
    performance of the Deepwater program. Yet, the Coast Guard awarded the
    prime contractors with a $4.0 million bonus for work accomplished in
    the first year of the contract based on an 87 percent rating. The ICGS
    received this rating despite schedule delays, such as the delivery of
    the 123 foot cutter, which was delayed by 4 months. The schedule for
    the Maritime Patrol Aircraft has slipped as well.
        The Department of Defense recently renegotiated the contract for
    the USS Dwight D. Eisenhower so that the prime contractor will receive
    its bonus only if the project is completed on time and meets specified
    targets. (1) Would the Coast Guard be willing to consider this approach
    for the Deepwater contract? (2) What benefits do the taxpayers receive
    by awarding bonuses to the contractor before the work is completed and
    when specific targets have not been met? (3) What benefits do the
    taxpayers receive if the contractor receives performance bonuses only
    if the project is completed on time and meets specified targets?
        Answers. Would the Coast Guard be willing to consider this approach
    for the Deepwater Contract?
        Yes--in fact, Deepwater has adopted part of this approach already
    in the structure of the Award Term incentive. ICGS is only able to earn
    additional award term periods if deliveries are timely. For instance,
    in order to earn an additional 5 award term, they must receive a
    performance rating of ``excellent.'' Under the award term plan an
    ``excellent'' rating is defined as: The Contractor's overall
    performance record strongly supports its ability to manage risks and
    actually deliver as planned.
        At this time, the award fee that is tied to certain Delivery Task
    Orders is being revised to focus more on schedule as compared to the
    earlier award fee criteria. One feature of this incentive for an award
    fee early in the contract to help reinforce the partnership approach,
    which has been identified as a ``Best Practice.'' To wait until the
    contract delivered a product before providing an incentive was judged
    as not keeping with the intent to build a partnership early on between
    industry and the government. The targets for the award fee that was
    cited in the GAO report was an annual award fee for System Engineering
    and Integration.
        (2) What benefit does the taxpayer receive by awarding bonuses to
    the contractor before the work is completed and when specific targets
    have not been met?
        Incentives for contractors serve many purposes. One purpose of
    incentives is to motivate the contractor to focus on contractor
    performance/behavior at critical times in the contract. One dimension
    of the IDS contract incentive approach is to focus on partnership
    between the Coast Guard and ICGS.
        (3) What benefit does the Taxpayer receive if the contractor
    receives performance bonuses only if the project is completed on time
    and meets specified targets?
        The benefit that the taxpayer receives is that the contactor
    receives incentives only if the project is completed on time and meets
    specified targets, is the best-case scenario. However, in a different
    scenario where the contractor is behind on schedule and cannot make up
    the time, this creates a situation where there is no additional
    incentive for the contractor to try to make the delay as short as
    possible. In this scenario, the contractor will, at the time, be
    working only to the exact letter of the contract specifications, not to
    the spirit of a partnership to reach mutually agreeable results. At
    that time, any situation in which the government has even partial
    responsibility will be seized on by the contractor to initiate a
    contract claim; a claim that could have potentially been avoided if an
    incentive was still in place. This is the reason that the IDS contract
    strategy contains two types of incentives:
      --Specific Short-Term Award Fee.--Results in a short-term (usually 1-
            year period) award fee. This provides a dollar amount award fee
            based on an Award Fee Determination is usually targeted at very
            specific performance for the period.
      --Long-Term Award Term.--Results in a longer term evaluation and in
            the case of IDS, the term evaluation period is for the first 5
            years and is determined during the last year. This incentive,
            which if awarded, is for another award term from 1 to 5 years
            allowing the contractor to keep performing under the contract
            for the period of time awarded. The following four factors are
            included in the Award Term Assessment:
      --Operational Effectiveness
      --Total Ownership Cost
      --Customer Satisfaction
      --Competition
        If deliveries occur late, that performance will be reflected in
    Total Ownership Coast and Customer Satisfaction. If specific targets
    are not met, then Operational Effectiveness and Customer Satisfaction
    will reflect that Performance.
        If there is a continuation of late deliveries, the Deepwater
    Program, which is measuring the schedule, will reflect that in it's
    Award Term Assessment and the Award Term could be adjusted accordingly;
    from zero to five additional years under the contract. Again, if ICGS
    complete all other assets on time and meets all required targets, the
    Award Term Assessment would reflect this overall performance and
    balance the achievement of the rest of the deliverables with these
    start up delays.
        By continuing both short and long-term incentives, along with
    robust performance measuring, Deepwater has the tools and methodology
    in place to appropriately manage this Performance Based Acquisition,
    yet respond to any changes in DHS priorities and changes in funding.
        With respect to GAO's comments, the following is provided:
      --GAO states the Coast Guard does not have the capability to assess
            the performance of the Deepwater Program. The Coast Guard does
            have the capability to assess performance. As stated in the GAO
            report, the Coast Guard assessed the performance for the first
            year to be 87 percent; since then we have documented and
            evaluated ICGS' logistics system at 79 percent and their
            service in providing HITRON at 90.6 percent. The process for
            assessment does need improvement and more objectivity, which
            the Coast Guard is currently implementing.
      --The award fee that was cited was for the first year's System
            Engineering and Integration and was not for the 123-foot cutter
            or the Maritime Patrol Aircraft.
      --Delaying any incentive until an approximate 20-year program is
            complete would not allow the government to recoup the benefit
            of having incentives consistently provided at smaller intervals
            of time.

                              DEEPWATER MANAGEMENT

        Question. As GAO states in its recent report on the management of
    the Deepwater program, the two first tier subcontractors have sole
    responsibility for determining whether to hold competitions for
    Deepwater assets or to provide these assets themselves. The GAO said
    that the Coast Guard does not have the mechanism in place to hold the
    contractor accountable. What is the Coast Guard doing to ensure that
    future contract decisions are made on a competitive basis?
        Answer. The Deepwater Program, working with GAO, is now including
    additional competition factors for determining if the contract should
    be approved for another term and the length of a subsequent term. The
    measures for competition being proposed for adoption include:
      --Percentage of awards competed;
      --Minimizing the number of teaming agreements;
      --Number of advertisements publicizing supplier registration;
      --Number of vendor outreach programs; and
      --Percentage of first tier subcontracts that incorporate the intent
            of the Federal Acquisition Regulation clause 52-244.5
            ``Competition in Subcontracting.''
        The Coast Guard's systems integrator, ICGS, has also adopted the
    Open Business Model, initially a Lockheed Martin philosophy, as an
    official policy for ensuring competition. The process ensures full,
    continuous, and open analysis of supplier alternatives throughout the
    program's execution.
      --This approach entails obtaining proposals/quotes from two or more
            qualified suppliers, and then balancing the cost, quality and
            delivery of the components after the qualified suppliers have
            been identified to provide the required components. This model
            provides the flexibility to capture commercial technology when
            needed, and it is projected to provide better performance at
            equal or lower cost.
      --The Open Business Model has been approved by the ICGS Board of
            Directors and is applicable to all Deepwater transactions.
      --To enforce these regulations, ICGS has appointed a Competition
            Advocate and Ombudsman tasked to draft implementation
            procedures for regular reporting to ICGS
      --Visits by the ICGS Competition Advocate are also planned with
            Deepwater's industry partners to examine ``make/buy'' decisions
            and competition practices.

                              DEEPWATER ESTIMATES

        Question. How much would be required in fiscal year 2005 to put the
    Deepwater program on track for completion in 20 years as originally
    planned? Please provide the outyear costs to meet a 20 year schedule.
    Provide estimates for completion in 15 years and 10 years as well.
        Answer. This is a complex, multi-variable equation, and as such
    developing comprehensive systems-wide analysis on various levels is
    challenging. The table below is based on an approximate total
    acquisition cost of the IDS project scoped out prior to 9/11 at
    approximately $12 billion (in 1998 dollars).

    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
    Est. fiscal year 2005 funding level.............................          $1,892          $1,105            $795
    Est. number of years............................................              10              15              20
    Est. completion date............................................            2011            2016            2021
    Notes:
    ----------------------------------------------------------------------------------------------------------------
    The estimated number of years to complete represents a rough order of magnitude estimation. These estimates will
      be impacted by the materiel condition of legacy assets, deterioration trends, evolving Coast Guard missions/
      demands within DHS and fluctuation in funding over the life of the project.
    The estimated completion date assumes funding begins in 2002 and ends in year depicted. Actual full
      implementation is approximately 2 years after end of procurement.
    The estimated funding level for 20 and 15 years are in 2005 dollars and assume continued funding at this level
      adjusted for inflation.
    The estimated funding level for 10 years is in 2005 dollars and assumes the cash flows as provided in the March
      07, 2003 Report to Congress on the feasibility of accelerating IDS.

        Question. For each asset planned to complete the Deepwater program,
    provide the total cost for each asset a functional description of the
    use of each asset, and the number of each asset the Coast Guard
    currently plans to acquire.
        Answer. A table is shown below which includes the number and
    projected unit cost for each major asset the Coast Guard plans to
    acquire through the Integrated Deepwater System acquisition program.

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                                         Average
                       Assets                       Lead Asset(s)    Lead Asset(s)  Projected Follow-  Follow-on Qty
                                                   Projected Cost         Qty            on Cost
    ----------------------------------------------------------------------------------------------------------------
    National Security Cutter (NSC) \1\..........            $475                 1            $265                 7
    Offshore Patrol Cutter (OPC) \1\............             330                 1             175                24
    Fast Response Cutter (FRC) \1\..............              78                 1              40                57
    123 (110 to 123 Conversion).................              16.5               1               8.2          \2\ 48
    Maritime Patrol Aircraft (MPA)..............             145                 2              33                33
    Vertical Take-off & Landing Unmanned Air                 138                 2               5.3              66
     Vehicle (VUAV).............................
    Multi-mission Cutter Helo (MCH).............              82                 1               6.2              92
    Vertical Take-off & Landing Recovery &                   110                 2              15.0              32
     Surveillance Aircraft (VRS)................
    High Altitude Endurance Unmanned Air Vehicle
     (HAE-UAV)..................................   In accordance with the original IDS implementation plan, the HAE-
                                                    UAV will be leased starting in fiscal year 2016 using Operating
                                                   Expense Funding based on the ICGS Implementation Plan. The lease
                                                   will provide approximately 16,100 hours of surveillance per year
                                                     at an approximate cost of $4,000 per hour in fiscal year 2002
                                                   dollars. The average annual cost per year is approximately $64.5
                                                                 million in fiscal year 2002 dollars.
    ----------------------------------------------------------------------------------------------------------------
    \1\ Includes DHS Capability for CBR (Chemical, Biological and Radiological) capability, interoperability with
      DHS and other Government Agencies (OGAs), selected counter measures and protection from certain terrorist
      weapons.
    \2\ The number of 123 conversions will be decided based on the Business Case Analysis (BCA) currently underway
      on when to shift to the Fast Response Cutter (FRC).

        At full implementation, the Integrated Deepwater System comprises
    three classes of new cutters and their associated small boats, a
    combination of new and upgraded fixed-wing manned aircraft, a
    combination of new and upgraded helicopters, and both cutter-based and
    land-based unmanned air vehicles (UAVs). All of these highly capable
    assets will be linked with state-of-the-art Command, Control,
    Communications, Computers, Intelligence, Surveillance and
    Reconnaissance (C4ISR) systems, and will be supported by an integrated
    logistics regime. The following are functional descriptions of each
    asset listed above.
        Upon departure for patrol, each NSC and OPC will be outfitted with
    the small boat package and aviation detachment most appropriate for
    that particular patrol. These cutters will have the capability to
    deploy with two MCHs or four VTOL Unmanned Air Vehicles (VUAVs) or a
    combination of these. Additionally, the NSC and OPC will be able to
    land, launch, hangar, service, and replenish the VTOL Recovery and
    Surveillance (VRS) helicopter.
        Fast Response Cutters (FRCs) can be deployed independently in
    support of law enforcement, port security, search and rescue, and
    defense operations missions. Typical missions include near-shore
    fisheries, choke point interdiction, barrier patrols, and providing a
    show of presence in areas of concern.
        The 123-foot Patrol Boat is a modification of the 110-foot Island-
    Class Patrol Boat. The renovation extends the length 13 feet to allow
    for the installation of a stern boat launch--enhancing small boat
    launch and recovery. The renovation includes a new superstructure and
    pilothouse, including a 360-degree bridge for increased visibility and
    a large increase in available deck space. The renovation also includes
    upgrades to the C4ISR suite to provide for increased capabilities in
    communications, detection and prosecution.
        The Multi-Mission Cutter Helicopter (MCH) is an upgraded version of
    the legacy short-range recovery helicopter, the HH-65. The HH-65 will
    undergo a Service Life Extension Plan (SLEP) that will yield a like-new
    aircraft. The MCH will assist in the missions of search and rescue,
    enforcement of laws and treaties, as well as maritime homeland security
    missions.
        The CASA CN 235-300M (Maritime Patrol Aircraft) is a transport and
    surveillance, fixed-wing aircraft that will be used to perform search
    and rescue missions, enforce laws and treaties including illegal drug
    interdiction, marine environmental protection, military readiness, and
    International Ice Patrol missions, as well as cargo and personnel
    transport. It can perform aerial delivery of search and rescue
    equipment such as rafts, pumps, and flares, and it can be used as an On
    Scene Commander platform.
        The AB-139 VRS (Vertical Take-off and Landing Recovery and
    Surveillance Aircraft) is proposed as the Integrated Deepwater System
    medium-range recovery aircraft, and would begin introduction in 2014.
    These helicopters will be used as medium range responders for offshore
    operations, and can provide shore-based aviation surveillance
    capability.
        The Bell HV-911 ``Eagle Eye'' Vertical Takeoff and Landing Unmanned
    Aerial Vehicle (VUAV) is a low maintenance shipboard deployable
    unmanned aircraft. The VUAV will allow the Coast Guard to extend the
    surveillance, classification and identification capability of its major
    cutters through its speed, range, and endurance. This asset will be
    used for maritime homeland security, search and rescue missions,
    enforcement of laws and treaties including illegal drug interdiction,
    marine environmental protection, and military preparedness.
        The proposed High Altitude Endurance Unmanned Air Vehicle (HAE-
    UAV), Northrop Grumman's RQ-4A Global Hawk, will bring even further
    capability to the Coast Guard aviation solution. Providing an air
    solution that is built on speed and endurance, the HAE-UAV can get on-
    site quickly with an air speed up to 400 knots. With its 12,500
    nautical mile range and 38 hour endurance combined with satellite and
    line-of-sight communication links to other air and surface platforms
    and operations centers ashore, the Global Hawk from a height of 65,000
    feet can use its high-resolution sensors to conduct surveillance and
    monitoring operations in adverse weather conditions, day or night, over
    an area about the size of Illinois in 24 hours. HAE-UAVs will possess
    the ability to transmit data and other imagery to shore-based Command
    and Control (C2) centers as part of the Common Operational Picture
    (COP).
        Question. Provide the total cost that will be required for prime
    contractor program management in fiscal year 2005 and over the life of
    the Deepwater contract.
        Answer. The table below provides enacted appropriation history for
    the Integrated Deepwater System (IDS) from fiscal year 2002 through
    fiscal year 2004, including Total Capital Acquisition and Systems
    Engineering and Integration (prime contractor program management). The
    table also provides the funding at the President's Budget for fiscal
    year 2005, and projections for the outyears until the acquisition is
    built out.

                            [In Millions of Dollars]
    ------------------------------------------------------------------------
                                                                  System
                   Fiscal year                 Total capital   engineering &
                                                acquisition     integration
    ------------------------------------------------------------------------
    2002....................................           320.2            53.9
    2003....................................           474.9            43.4
    2004....................................           664.3            41.9
    2005....................................           678.0            45.0
    2006....................................       \1\ 688.8        \3\ 41.8
    2007....................................       \1\ 700.6        \4\ 40.4
    2008....................................       \1\ 713.2        \4\ 38.7
    2009....................................       \1\ 726.0        \4\ 37.4
    2010....................................       \2\ 739.8        \4\ 37.0
    2011....................................       \2\ 753.9        \4\ 38.0
    2012....................................       \2\ 768.2        \4\ 38.4
    2013....................................       \2\ 782.8        \4\ 37.0
    2014....................................       \2\ 797.7        \5\ 36.9
    2015....................................       \2\ 812.8        \5\ 38.2
    2016....................................       \2\ 828.2        \5\ 38.9
    2017....................................       \2\ 844.0        \5\ 40.1
    2018....................................       \2\ 860.0        \5\ 39.7
    2019....................................       \2\ 876.4        \5\ 39.6
    2020....................................       \2\ 893.0        \5\ 40.0
    2021....................................       \2\ 910.0        \5\ 40.7
    2022....................................       \2\ 927.3        \5\ 41.6
    2023....................................       \2\ 944.9        \5\ 39.3
                                             -------------------------------
          Total.............................  ..............           887.9
    ------------------------------------------------------------------------
    \1\ Then Year Dollars provided in the Coast Guard's Capital Investment
      Plan.
    \2\ Then Year Dollars, based on the final year of Capital Investment
      Plan, inflated using a 1.9 percent inflation factor.
    \3\ Systems Engineering & Integration amount based on proposal prices
      provided in June 2002.
    \4\ Then Year Dollars based on Systems Engineering & Integration amount
      proposal prices provided in June 2002 and then inflated using OMB/USCG
      Non-pay Inflation.
    \5\ Then Year Dollars based on Systems Engineering & Integration amount
      proposal prices provided in June 2002 and then inflated using a 1.9
      percent inflation factor from 2014 through 2023.

                             DEEPWATER PATROL BOATS

        Question. The Deepwater contract with the Integrated Coast Guard
    Systems (ICGS) calls for the modification and conversion of 49 110 foot
    patrol boats to 123 foot patrol boats. According to the Coast Guard,
    the number of 123 foot conversions may change based on an ongoing
    Business Case Analysis on when to shift to the Fast Response Cutter
    (FRC).
        What is the timeline to complete this analysis and how will it
    affect resources appropriated to date and requested in fiscal year
    2005?
        Answer. The Business Case Analysis on accelerating the acquisition
    of the Fast Response Cutter (FRC) is expected in fiscal year 2004. The
    results of the Business Case Analysis will not affect resources
    appropriated to date or requested for fiscal year 2005. The Coast Guard
    will use this analysis to assist in determining the appropriate number
    of 123-foot patrol boat conversions, while accelerating the FRC as
    appropriated in the IDS Patrol Boat Line item.

                 SECURITY PLANS FOR VESSELS AND PORT FACILITIES

        Question. To meet the requirements of the Maritime Transportation
    and Security Act (MTSA), vessel owners and port facility owners were
    required to submit security plans to the Coast Guard for review and
    approval by December 31, 2003.
        How many vessel and port facility owners failed to submit a
    security plan? How many penalties have you levied against non-compliant
    companies? How many plans have you sent back for revisions? Based on
    the plans that have been submitted to the Coast Guard, what is being
    learned about the security needs of vessels and port facilities?
        Answer. As of April 7, 2004, the Coast Guard has issued Notices of
    Violation to 95 vessels and 66 facilities. Each of those violations was
    for failing to submit a completed security assessment and has a $10,000
    civil penalty associated with it. Subsequently, the Coast Guard has
    issued civil penalties in the amount of $25,000 (additional) to four of
    these facilities for failing to submit a completed security plan. These
    penalties were based on violations of 33 CFR Section 104.410 for
    vessels and 33 CFR Section 105.410 for facilities.
        The Coast Guard is following a three-step process to review and
    approve facility security plans. The first-step is a broad overview,
    the second-step is a detailed review, and the third-step is an on-site
    inspection. On-site inspections have just recently commenced. Plans may
    require revision during any stage of review or inspection.
        The Coast Guard is following a two-step process to review and
    approve vessel security plans. The two stages are similar to the first
    two stages used for facility plans, but there is no on-site inspection
    required. Also like facilities, vessel security plans may require
    revision during either stage of review.
        As of April 7, 2004, the Coast Guard had received 9,250 vessel
    security plans. Of the total vessel security plans received, 1,884 are
    being revised. The Coast Guard Marine Safety Center is currently
    engaging these vessel owner/operators to ensure these vessels meet the
    July 1, 2004 deadline.
        As of the same date, the National Plan Review Center had received
    3,181 facility security plans. Of the total facility security plans
    received, 383 are being revised. The Coast Guard National Plan Review
    Center is currently engaging these facility owners and/or operators to
    ensure these facilities meet the July 1, 2004, deadline.
        The Coast Guard has two concerns as plans are being reviewed: (1)
    Assessment Reports required to go forward with the plans are often too
    abbreviated and may require the COTP to read the entire assessment
    prior to going forward with approval; and (2) regulations do not
    require a layout of the facility which would help the plan reviewers.
    The latter issue can be worked around with overhead images and prior
    submissions from the facility that have layouts.
        Question. When Secretary Ridge testified before this subcommittee
    in February, he said that he believes port facility owners should bear
    most of the financial burden to harden security at our seaports. What
    evidence do you have that these owners are stepping up to the plate and
    investing their own resources in port security?
        Answer. The Federal Government is bearing most of the financial
    burden to harden security at our seaports. Department of Homeland
    Security spending on port security increases by $224 million (13
    percent) in the President's Budget, from $1,661 million in 2004 to
    $1,885 million in 2005. Within the 2005 total is $1,675 million for
    Coast Guard port, waterway, and coastal security activities, including
    over $100 million to implement the Maritime Transportation Security Act
    (MTSA). The DHS port security total also includes $164 million in U.S.
    Customs and Border Protection for the Container Security Initiative and
    the Customs Trade Partnership Against Terrorism, and $46 million in the
    Office for Domestic Preparedness for port security grants.
        Port facility owners must also do their share. The owners/operators
    of these regulated facilities realize that they must be fully compliant
    with approved facility security plans by July 1, 2004 or face
    suspension of operations. All indicators are that they are working hard
    in preparation to meet the enforcement date. As of March 23, 2004,
    3,205 facilities have submitted security plans to the National Plan
    Review Center in Kansas City, KS. This represents approximately 99
    percent of the facilities required to submit plans. In addition to
    preparing their plans, facility owner/operators are purchasing and
    installing physical security equipment and providing training to their
    personnel. Coast Guard inspectors are observing improved access control
    and personnel monitoring, fencing, security patrols, and signage during
    facility security spot checks conducted in conjunction with other
    required visits.

                        AUTOMATIC IDENTIFICATION SYSTEM

        Question. The Maritime Transportation Security Act, which President
    Bush signed on November 25, 2002, requires vessels entering U.S. ports
    to have an automatic identification system (AIS) on board by the end of
    2003 that will identify the ship, the size of the ship and the type of
    cargo on the ship when they arrive at U.S. ports. Congress appropriated
    $24 million in fiscal year 2004 to install towers at selected ports and
    to initiate a plan to create a nationwide system for all major
    seaports. Your fiscal year 2005 request includes only $4 million to
    continue this effort. The Coast Guard indicates that by the end of
    fiscal year 2004, only 9 seaports will be able to receive AIS signals
    from vessels entering our ports. Of the 9 seaports, how many will have
    full AIS coverage?
        Answer. By December 31, 2004, all nine ports will have full AIS
    capability installed as part of their Vessel Traffic Service (VTS)
    system:
      --New York
      --Houston/Galveston
      --San Francisco
      --Puget Sound (Seattle-Tacoma)
      --Prince William Sound (Valdez)
      --St. Marys River (Sault Ste. Marie, MI)
      --Berwick Bay (Louisiana)
      --Lower Mississippi River (New Orleans)
      --Los Angeles-Long Beach
        In addition, the Coast Guard is already operating basic (primarily
    receive-only) AIS installations in the following locations:
      --Miami and Florida Keys
      --Long Island Sound (Groton, CT)
      --Hampton Roads (Norfolk, VA)
        By the end of CY 2004, the Coast Guard intends to have established
    additional AIS capability (primarily receive-only, but possibly more
    robust) at additional locations nationwide. These sites will be
    determined based on a variety of criteria, including the expected
    density of AIS-equipped vessels in the area, existing command and
    control capability to put the data to use, compatibility and support
    for the more extensive and capable system currently in the planning
    stages, and coordination with other needs and assessments. These sites
    will include use of offshore NOAA and other buoys and may include some
    non-recurring investment in satellite capability. A more detailed plan
    will be available by June 2004.
        Question. The Coast Guard indicated that a contract award to
    implement a nation-wide system would be made by the end of fiscal year
    2004 or early fiscal year 2005. Is that information still accurate? If
    the $4 million requested in fiscal year 2005 were approved, how many
    additional ports would be outfitted with AIS technology?
        Answer. The Coast Guard is currently developing a nationwide
    implementation plan for AIS consistent with Coast Guard and Department
    of Homeland Security requirements associated with major systems
    acquisitions. We anticipate awarding a contract for this initiative in
    late fiscal year 2004 or early fiscal year 2005. In the meantime, we
    intend to deploy interim AIS capability in several ports during fiscal
    year 2004. By December 31, 2004, the following ports will have full AIS
    capability installed as part of their Vessel Traffic Service (VTS)
    system:
      --New York
      --Houston/Galveston
      --San Francisco
      --Puget Sound (Seattle-Tacoma)
      --Prince William Sound (Valdez)
      --St. Mary's River (Sault Ste. Marie, MI)
      --Berwick Bay (Louisiana)
      --Lower Mississippi River (New Orleans)
      --Los Angeles-Long Beach
        In addition, the Coast Guard is already operating basic (primarily
    receive-only) AIS installations in the following locations:
      --Miami and Florida Keys
      --Long Island Sound (Groton, CT)
      --Hampton Roads (Norfolk, VA)
        Interim sites will include use of offshore NOAA and other buoys and
    may include some non-recurring investment in satellite capability. A
    more detailed plan will be available by June 2004.
        The $4 million requested in fiscal year 2005 will be used to
    continue building out the nationwide AIS system. Once the Acquisition
    Project Baseline is developed, a total project cost estimate will be
    known and we will be able to provide an estimate of the number of
    additional ports that will be outfitted with AIS technology. It is
    important to note that each port will have unique requirements so there
    will be no standard AIS cost per port.

                             RESEARCH & DEVELOPMENT

        Question. Section 307 of the Homeland Security Act requires a joint
    agreement between the Under Secretary of the Science & Technology
    directorate and the Commandant on R&D spending for the Coast Guard. The
    Homeland Security Act specifies 10 percent of funding for the Homeland
    Security Advanced Research Projects be spent on Coast Guard related
    mission areas. Last year, the Committee was notified that the ``Coast
    Guard is working with DHS to develop processes and policy for
    compliance with Section 307 of the Homeland Security Act.'' Has a
    policy been developed to comply with Section 307 of the Act?
        Answer. No. Subsequent to the Coast Guard reply cited, DHS and CG
    legal counsel advised that without a specific (Homeland Security
    Advanced Research Project Agency) HSARPA appropriation, no funds are
    statutorily designated to be set aside for CG related mission areas as
    outlined in Section 307. Although the Homeland Security Act provides
    authorization to do so (Figure 1), there have been no funds
    appropriated specifically for HSARPA since enactment of the Homeland
    Security Act. HSARPA is not a line item in the S&T budget. Rather,
    funds have been appropriated toward a number of specific portfolios
    organized generally by threat. It has evolved into an execution means
    by which S&T will award competitive, merit-reviewed grants, cooperative
    agreements or contracts to public or private entities to meet S&T
    requirements.
        Nonetheless, the Science and Technology Directorate (S&T) and CG
    will develop a formal agreement that will detail the coordination and
    funding mechanisms for CG R&D capabilities in fiscal year 2005 and
    beyond. This agreement will not be limited to HSARPA but rather the
    interaction of the Coast Guard/Maritime portfolio with all the
    executing arms of S&T (e.g. HSARPA, Office of Research and Development
    (ORD), etc).

        ----------------------------------------------------------------

        ``(2) Authorization of Appropriations.--There are authorized to be
    appropriated $500,000,000 to the Fund for fiscal year 2003 and such
    sums as may be necessary thereafter.
        ``(3) Coast Guard.--Of the funds authorized to be appropriated
    under paragraph (2), not less than 10 percent of such funds for each
    fiscal year through fiscal year 2005 shall be authorized only for the
    Under Secretary, through joint agreement with the Commandant of the
    Coast Guard, to carry out research and development of improved ports,
    waterways and coastal security surveillance and perimeter protection
    capabilities for the purpose of minimizing the possibility that Coast
    Guard cutters aircraft, helicopters and personnel will be diverted from
    non-homeland security missions to the ports, waterways and coastal
    security mission.''

        ----------------------------------------------------------------

          Figure 1.--Excerpt from Section 307 of Homeland Security Act

        Question. For fiscal year 2005, the Department proposes to move
    funding for Coast Guard R&D to the Science & Technology (S&T)
    directorate. The S&T request includes $13.5 million to operate the
    Coast Guard's R&D Center in Groton, CT and an additional $5 million for
    R&D activities for a total of $18.5 million. In addition to this
    funding, how will the Coast Guard benefit from S&T research? What
    specific technologies are being explored to support the Coast Guard's
    mission?
        Answer. Through its portfolio manager at S&T, the CG will have
    direct access to, and visibility of, all S&T research and initiatives.
    The integration of funding and effort will go far to minimize
    redundancy and maximize the effectiveness of Coast Guard R&D while
    ensuring that all Coast Guard mission requirements remain a key part of
    S&T planning and resource decisions. For example, S&T has provided $7.1
    million of fiscal year 2003/2004 funds for support of a project in
    South Florida exploring communications, sensors, data fusion concepts,
    and modeling and simulation (Project Hawkeye). The integration of these
    technologies provides improved maritime security for Miami and Port
    Everglades while providing a rapid prototyping prelude to potential
    Coast Guard-wide installations.
        As stated, S&T has also agreed upon a base level of project funding
    of $5 million that will be specifically targeted toward non-security
    related projects including maritime science and research. This funding
    will be designed to support CG mission-programs such as Marine
    Environmental Protection, Living Marine Resources, Search and Rescue,
    Aids to Navigation and Marine Safety. The specific projects in support
    of these mission-programs will be prepared annually for S&T
    concurrence.
        In addition to the $18.5 million in funding cited, the Coast Guard
    will submit security-related research requests through S&T for
    coordination across all portfolios and DHS components. The Coast Guard
    has submitted a maritime security R&D portfolio detailing approximately
    $50 million in vital maritime security research initiatives. While not
    yet funded, this portfolio has been validated by S&T portfolio managers
    and will be considered in the development of future spending priorities
    and commitments from S&T. As the lead Federal agency for maritime
    security, the CG is being afforded an important role within S&T to
    construct and help prioritize research and development needs in the
    maritime domain.

                                HH-65 HELICOPTER

        Question. The Coast Guard is currently in the process of purchasing
    LTS-101-850 engines for the HH-65 to address safety, reliability, and
    engine power issues. This approach is intended to provide an interim
    solution to documented power failures. How many of the LTS-101-850
    engines have been purchased? How many of the LTS-101-850 engines are
    needed to provide the interim solution for the HH-65 before full
    reengineering is completed and what is the associated cost?
        Answer. To date, the Coast Guard has purchased 61 LTS-101-850
    engines at a cost of $5.9 million.
        The only reason to purchase additional 850 engines (38 at $4
    million) would be to provide an interim safety and reliability
    enhancement throughout the approximate 24-month duration of Integrated
    Coast Guard System's (ICGS) Turbomeca re-engining project. The LTS-101-
    850 engine, while not equipped with electronic fuel controls, offers an
    additional margin of safety in an emergency situation. We owe our
    aircrews nothing less until the fleet is re-engined. Based upon current
    schedule projections, there is a 10-14 month ``underlap'' where the
    Coast Guard would directly benefit from the additional engines.
        These engines require long-lead time component purchases that must
    be accounted for in the procurement decision process. The Coast Guard,
    however, will wait until the completion of the current field evaluation
    and subsequent inspection of the LTS-101-850 engines that are installed
    on two Coast Guard Air Station Miami Helicopters. One helicopter has
    completed the initial 150 hour evaluation and is currently being
    inspected, while the second aircraft still has 36 hours of evaluation
    remaining prior to inspection. After completion of testing and
    inspection, the Coast Guard intends to re-evaluate the need for
    additional engines based upon the results and both LTS-101-850 and
    Turbomeca installation schedule updates
        Below is the latest draft installation schedule based on
    information from the new engine system selected manufacturer,
    Turbomeca. This schedule is not final. The Coast Guard is hopeful that
    the new engine installations move further to the ``left.''

        Question. At the same time, the Coast Guard recently announced the
    selection of Turbomecca to re-engine the HH-65. The Coast Guard
    estimates that this re-engining will cost $250 million over a 24 month
    period. Will this engine be compatible with the Deepwater Multi-Mission
    Cutter Helicopter or will another engine replacement be required?
        Answer. The Coast Guard has directed that a re-engining project be
    immediately initiated to restore the HH-65 to unrestricted safe and
    reliable operations. The project is designed to address the HH-65
    engine system, the engine and engine control systems, to remedy this
    safety and reliability crisis, and restore the HH-65's operational
    capability.
        The HH-65 re-engining project is a separate and distinct effort
    from the Deepwater Multi-mission Cutter Helicopter (MCH). In the long-
    term, the Deepwater plan is still to convert the HH-65 to the Multi-
    mission Cutter Helicopter (MCH). While power increases were not the
    focus of this acquisition, the engine chosen, while addressing the
    safety and reliability concerns, also has sufficient power margins to
    allow for that engine to be used in the continuation of the MCH.

                         HIGH INTEREST VESSEL BOARDINGS

        Question. U.S. Customs and Border Protection use an automated
    targeting system to identify shipments that pose a potential terrorist
    risk. It is unclear if this information is shared with the U.S. Coast
    Guard, which could be useful in identifying high interest vessels. Is
    this information being shared with the Coast Guard? If not, would this
    information be a useful tool for the Coast Guard to use?
        Answer. Yes, Automated Targeting System information is shared
    through an exchange of liaisons between the Coast Guard and the U.S.
    Customs and Border Protection's National Targeting Center (NTC). The
    Coast Guard's Intelligence Coordination Center (ICC) and the NTC have
    exchanged full-time liaisons to pass information each center develops
    about suspect ships, people, and cargoes. This has been a highly
    effective partnership and has given each center much greater visibility
    into specific maritime cases and concerns as they arise, resulting in
    better coordination of information flow and operational planning. ICC's
    COASTWATCH program (a partnership with the U.S. Navy's Office of Naval
    Intelligence) uses data collected via the ICC/NTC partnership, coupled
    with the information received through our 96-hour Advanced Notice of
    Arrival (ANOA) rules, intelligence, and other appropriate law
    enforcement information, to identify Vessels of Interest, providing
    crew, cargo, and vessel screening prior to a vessel's arrival in U.S.
    ports.
        At the local level, Vessels of Interest are factored into the
    decision making process to determine which vessels should be designated
    and or boarded as High Interest Vessels (HIVs). Additionally, because
    of the U.S. Coast Guard's solid working relationship with Customs and
    Border Protection (CBP), input provided by CBP at the local level is
    also considered when determining which vessels should be boarded as
    HIVs.
        The Coast Guard is incorporating an option into our 96-hour vessel
    ANOA requirements to permit the electronic submission of information
    (e-NOA). The Coast Guard and CBP have been working together to
    incorporate CBP's reporting requirements into the e-NOA system. This
    consolidated e-NOA system will include the capability to capture crew,
    passenger, cargo, and vessel arrival information for both agencies. It
    is anticipated that e-NOA will be operational by the summer of 2004. By
    allowing industry to submit Coast Guard and CBP reporting requirements
    together, DHS will enhance its information sharing capabilities,
    thereby significantly enhancing the processing and identification of
    security and safety risks posed by vessels entering U.S. ports.

                                SHORE FACILITIES

        Question. The Coast Guard's request for shore facility projects is
    $5 million in fiscal year 2005. According to the Coast Guard, $146
    million is needed on an annual basis for recapitalization needs to
    support shore facility assets valued at $7.2 billion. With such
    valuable assets, why does the Coast Guard continue to neglect shore
    facilities? Does the Coast Guard have a plan in place to address the
    needs of its shore infrastructure? Provide a list of projects in need
    of shore facility funding in priority order.
        Answer. The Coast Guard is deeply concerned about its entire
    infrastructure, including shore facilities. However, funding priority
    must be placed on recapitalization efforts of operational first
    response platforms such as Deepwater and Rescue 21. Shore facility
    sustainment will be managed by targeted maintenance practices,
    increased use of leased facilities, and ensuring shore infrastructure
    costs are included in major AC&I projects, such as Deepwater and the
    Great Lakes Icebreaker replacement. Increases in the Basic Allowance
    for Housing also help and reduce the need for Coast Guard owned housing
    projects. Additionally, the Coast Guard is pursuing Public-Private
    Venture housing opportunities authorized in the Maritime Transportation
    Security Act of 2002. Other Coast Guard initiatives currently being
    developed that will assist in being good stewards of shore facilities
    include enhanced real property authorities, such as the ability to
    sublease and outlease property, exchange and sell property, and dispose
    of excess property with sale proceeds being reinvested in the capital
    plant. The Coast Guard is on budget in fiscal year 2005 for $151
    million recurring OE shore facility maintenance costs and an additional
    $5 million for shore AC&I projects.
        Provided below is the budgeted Shore Facilities Requirements List
    (SFRL) for fiscal year 2005, followed by a backlog of listing of fiscal
    year 2005 unfunded projects. While the Coast Guard planning process
    addresses projects that require funding beyond fiscal year 2005, these
    projects have not been prioritized and are not included in the fiscal
    year 2005 SFRL attached.

       FUNDED SHORE FACILITIES REQUIREMENTS LIST (SFRL)--FISCAL YEAR 2005
    ------------------------------------------------------------------------
             BENEFITTING UNIT            PROJECT DESCRIPTION     EST (000)
    ------------------------------------------------------------------------
    MAJOR AC&I: ISC Honolulu            Small Arms Range....          $1,600
    SURVEY AND DESIGN: Various          Shore Operational &            1,000
                                         Support Projects.
    MINOR AC&I: Various                 Minor Construction             1,600
                                         Projects.
    WATERWAYS AND AIDS TO NAVIGATION:   Various Locations...             800
     Various
                                                             ---------------
          TOTAL.......................  ....................           5,000
    ------------------------------------------------------------------------

      UNFUNDED SHORE FACILITIES REQUIREMENTS LIST (SFRL)--FISCAL YEAR 2005
    ------------------------------------------------------------------------
             BENEFITTING UNIT            PROJECT DESCRIPTION     EST (000)
    ------------------------------------------------------------------------
    MAJOR AC&I:
        ISC Kodiak, AK................  Consolidate Support           $8,500
                                         Facilities.
        AR&SC Elizabeth City, NC......  Consolidate                    6,300
                                         Facilities Phase I.
        Base Galveston, TX............  Rebuild Station/               6,400
                                         Waterfront.
        Group Woods Hole, MA..........  Replace ANT and                3,750
                                         Admin Building
                                         Phase I.
    SURVEY AND DESIGN: Various          Shore Operational &            4,000
                                         Support Projects.
    MINOR AC&I: Various                 Minor Construction             2,750
                                         Projects.
    WATERWAYS AND AIDS TO NAVIGATION:   Various Locations...           4,200
     Various
    COAST GUARD HOUSING:
        Cordova, AK...................  Replace Cordova                4,000
                                         Housing, Phase I.
        USCGA, New London, CT.........  Chase Hall Barracks           15,000
                                         Renovation Phase I.
                                                             ---------------
          TOTAL.......................  ....................          54,000
    ------------------------------------------------------------------------

           MARITIME TRANSPORTATION SECURITY ACT (MTSA) IMPLEMENTATION

        Question. The budget request includes $101.7 million for the
    implementation of the MTSA. What follow-on costs are necessary to meet
    the requirements of the MTSA (specify by fiscal year)?
        Answer. The fiscal year 2005 budget request is designed to bring
    MTSA implementation close to the annual recurring steady state for
    personnel, associated support funds, and contract resources. These
    resources will be used to address the permanent increase in workload
    associated with MTSA. This workload includes continued verification of
    domestic vessel and facility security requirements, a robust Port State
    Control program to ensure compliance with international security
    requirements, continuous updates and improvements to the National and
    Area Maritime Security plans, and the assessment of domestic and
    foreign ports for compliance. Additional follow-on costs of MTSA
    initiatives are $12.9 million in fiscal year 2006.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye

                             NON-SECURITY MISSIONS

        Question. When the Coast Guard was moved to the Department of
    Homeland Security, Congress included a provision in the Homeland
    Security Act of 2002 to ensure that the Coast Guard continued to carry
    out its non-security missions. Section 888 of the Act states that the
    Secretary, ``may not substantially or significantly reduce the missions
    of the Coast Guard or the Coast Guard's capability to perform those
    missions, except as specified in subsequent Acts.''
        However, concern has been raised about the Coast Guard's ability to
    maintain its non-security missions as the hours ships and aircraft are
    used for these missions have not reached pre-September 11 levels. I was
    concerned by a report to the Congress that several of the districts,
    including Honolulu, have ``insufficient personnel'' for its search and
    rescue missions.
        It is my understanding that your performance measures were enhanced
    through the assistance of other agencies. In addition, certain
    performance goals are not reflective of the success of the maintenance
    of your effort. I do not find it helpful that the performance measure
    for compliance with domestic fisheries regulations is how many
    fisherman, of those reviewed, were found to be in compliance. If the
    Coast Guard interviewed one fisherman who was in compliance, the Coast
    Guard would have 100 percent performance on this measure.
        Can you tell me what you are doing to ensure that the non-security
    missions that are so critical to my state are being met and that the
    performance measures are a true reflection of your efforts?
        Answer. Based on all measurements completed to date, the Coast
    Guard met its performance goal in each non-homeland security mission-
    program area including our goal for Search and Rescue for fiscal year
    2003. Program performance is the most important element of the Coast
    Guard Performance Management System. Program managers establish
    measures to accurately portray organizational performance. The measures
    are data-driven, fully documented, meaningful, and focus on outcomes.
    Using the performance measures, and with an emphasis toward improving
    effectiveness, the Coast Guard Commandant establishes long-term
    performance outcome targets that are linked to the strategic intent of
    the organization, including maintaining the balance between homeland
    security and non-homeland security missions. While the Coast Guard has
    been lauded in the past for its performance measurement efforts, it has
    recognized and acknowledged that limitations in these measures
    sometimes exist. The Coast Guard has been working with GAO through the
    recent audit examining the relationship between resources and results,
    and OMB through the Performance Assessment Rating Tool (PART) reviews,
    and other independent evaluation efforts to continually review and
    improve program measures' clarity and objectivity. Examples of measures
    that have recently been revised or are currently under review include:
        Several years ago, the Search and Rescue program was measured by
    the percent of persons in U.S. jurisdictional waters in distress that
    were saved, after the Coast Guard was notified. This measure was
    changed to include the percentage all persons in U.S. jurisdictional
    waters in distress, with no restriction on Coast Guard notification.
    This change occurred as program managers realized that communication
    improvements and other non-Search and Rescue safety programs were
    inputs to the measure of safety as well as that of a simple Search and
    Rescue response measure.
        Two years ago, the Short Range Aids to Navigation (AtoN) program
    was measured by the statistic of Short Range Aid availability. While
    this measure provided information on the percent of Coast Guard Aids to
    Navigation that were working properly and on-station, there was little
    connection to performance of these aids and benefit to the public. When
    this was brought to the Coast Guard's attention through an Office of
    Management and Budget (OMB), Performance Assessment Rating Tool (PART)
    review, a change was made to measure the AtoN program by the number of
    Collisions, Allisions and Groundings that occur in U.S. waterways.
        The illegal drug interdiction measure was recently refined to
    include not only cocaine seized by the Coast Guard but also to account
    for cocaine thrown overboard or destroyed by smugglers. This refined
    measure, which encompasses both the cocaine lost to the smuggler as
    Coast Guard assets draw near, causing the smugger to jettison, burn,
    and otherwise destroy their product, as well as the cocaine actually
    seized by the Coast Guard, will more accurately reflect counter-drug
    efforts and results.
        With regard to the concern expressed in the question regarding the
    domestic fisheries performance measure of a compliance rate; both the
    Coast Guard and OMB, through its PART review, believe this rate to be a
    sound measure. The observed compliance rate measure is the total number
    of Coast Guard domestic fishing vessel boardings minus the boardings
    that had significant violations divided by the total number of Coast
    Guard fishing vessel boardings. Only boardings that have a significant
    violation--a living marine resource violation that results in
    significant damage or impact to the fisheries resource, significant
    monetary advantage to the violator, or has high regional or national
    interest--are counted.
        Historically, domestic compliance rates, which are based on over
    3,000 boardings (post 9/11 statistic) annually, have been within the
    95-98 percent range and movement within this range is expected and
    mostly beyond CG control as economic and social factors other than
    enforcement presence motivates individuals to violate the law. As a
    result, a floor has been established at 97 percent observed compliance
    to evaluate if CG levels of enforcement are sufficient to ensure wide-
    scale compliance with regulations.
        Historical data illustrates Coast Guard enforcement presence does
    in fact affect observed compliance rates and also that there is a delay
    between enforcement presence/absence and fisheries compliance rates.
    Although observed compliance rate will not perfectly indicate the
    actual industry-wide compliance rate, it should serve as a reasonable
    indicator of the actual compliance rate when enforcement resource
    effort is sufficient to make performance tracking possible.
        In regard to the comment concerning ``insufficient resources'' in
    Honolulu, the Coast Guard is careful to distinguish between mission
    performance measures and internal program standards put in place to
    ensure the long-term maintenance of our resources, including our most
    valuable asset, our people. As stated above the Coast Guard has
    successfully met all mission performance goals for the search and
    rescue mission. The Coast Guard has adequate resources to meet
    performance and on-scene response standards for search and rescue in
    Hawaii. However, the Coast Guard has recently adopted an internal
    program standard, driven by requirements set forth in MTSA 2002,
    requiring command center watchstanders responsible for search and
    rescue to limit their watch length to 12 hours in duration, except in
    emergency or unforeseen circumstances.
        The Coast Guard measures and reports quarterly to Congress on our
    ability to meet this standard. The Coast Guard has demonstrated
    incremental improvement in achieving this standard, however, routine
    personnel transfers and substantial training requirements for newly
    assigned personnel continue to challenge the Coast Guard's ability to
    meet the 12-hour standard at all times. The Coast Guard is reviewing
    the staffing standards for our command centers, and is developing
    recommendations to ensure our ability to meet and maintain a year-round
    capability to meet the 12-hour watch requirement.

                                 PORT SECURITY

        Question. As part of the Maritime Transportation Security Act,
    9,000 vessels and 3,500 facilities were supposed to have filed security
    plans by December 31, 2004. It is my understanding that you have
    received 97 percent of the security plans and that more than half of
    them are in the second stage of review. Area security and contingency
    response plans must be completed by July 1, do you anticipate a similar
    compliance rate? How does the cost of implementation affect the
    adequacy of the security plans submitted? On December 30, 2002, the
    Coast Guard estimated the total cost of implementing security in our
    seaports at $7.2 billion over the next 10 years. Is that estimate still
    accurate and how much has been spent toward that total to date? The
    President's budget requests $46 million for Port Security Grants. Will
    that be sufficient to bring our vessels and facilities into compliance
    with the security plans?
        Answer. Each Federal Maritime Security Coordinator submitted an
    Area Maritime Security (AMS) Plan to the respective Coast Guard
    District Commander for initial review on April 1, 2004. In order to
    meet the entry-into-force date of the new International Ship and Port
    Facility Security (ISPS) Code and Safety of Life at Sea (SOLAS)
    amendments, the Coast Guard must review and approve all AMS plans by
    June 30, 2004 and communicate U.S. port compliance with the ISPS Code
    to the International Maritime Organization.
        In the final MTSA regulations, the Coast Guard estimated the
    industry cost for implementing Section 102 of the MTSA security
    requirements as approximately $1.5 billion in the first year, and $7.3
    billion over the next 10 years. The port security grants to date have
    provided approximately $500 million.
        The Coast Guard does not believe the cost of implementation
    affected the adequacy of the facility and vessel security plans
    submitted for review. The MTSA security regulations were specifically
    developed to be performance based in order to provide owners/operators
    the latitude to implement the most cost-effective security controls to
    meet their specific circumstances.
        The fiscal year 2005 Department of Homeland Security (DHS) budget
    proposes a significant increase for port security activities. Grants to
    facilities are a small part of DHS's total investment in port security.
    Department of Homeland Security spending on port security increases by
    $224 million (13 percent) in the President's Budget, from $1,661
    million in 2004 to $1,885 million in 2005. Within the 2005 total is
    $1,675 million for Coast Guard port, waterway, and coastal security
    activities, including over $100 million to implement MTSA. The DHS port
    security total also includes $164 million in U.S. Customs and Border
    Protection for the Container Security Initiative and the Customs Trade
    Partnership Against Terrorism, and $46 million in the Office for
    Domestic Preparedness for port security grants.

                                    HC-130J

        Question. The Coast Guard has expanded its mission since September
    11, 2001 and has been transferred from the Department of Transportation
    to the Department of Homeland Security. Thirteen Maritime Safety and
    Security Teams and eight Port Security Units have been deployed. With
    these changes, has there been an increased requirement for airlift
    capacity?
        Answer. Yes. Since 9/11, the Coast Guard has redefined and expanded
    organic lift requirements. The Coast Guard must be capable of providing
    organic aviation transport of National Strike Force personnel and
    equipment within 6 hours and must be capable of providing aviation
    transport of MSSTs within 12 hours of notification. Ongoing efforts to
    expand the Deepwater contract to reflect post-9/11 mission requirements
    and DHS Aviation Council study efforts will shape our aviation heavy
    lift and transport capability.
        Question. Pursuant to funding provided in the fiscal year 2001
    Military Construction bill, the Coast Guard recently received delivery
    of the first of six HC-130J Super Hercules aircraft. Could you discuss
    with us those aircraft, the benefits to DHS, and the advantages of the
    new 130Js over the 130Hs currently in service? In your opinion, is the
    HC-130J, the best aircraft available to replace your aging air fleet?
        Answer. The HC-130J provides the USCG and DHS a modern long-range
    patrol and heavy lift aircraft that will remain in the DHS inventory
    well into the future. This capability will provide DHS the ability to
    provide heavy-lift through a variety of mission profiles, and will
    enable the Department to remain in the forefront of disaster response
    and Homeland Security missions. The HC-130J is a completely new
    aircraft enabling a substantially better level of performance. Even in
    their current unmissionized state, the C-130J provides a substantially
    greater heavy lift capability than the aging HC-130H. Missionization to
    full capability as maritime patrol aircraft is scheduled to begin in
    fiscal year 2004. The missionization suite was designed to reflect post
    9/11 mission requirements, and will be fully interoperable with DHS,
    DOD, and the Deepwater systems. Fully digitized and equipped with a
    contemporary electronics suite, the missionized HC-130J will fly faster
    and have greater range with a smaller crew. The legacy asset HC-130H is
    increasingly more expensive to maintain and will be costly to modernize
    to homeland security and Deepwater mission requirements. At Full
    Operational Capability (FOC), the HC-130J will meet all current DHS/
    USCG long range maritime patrol and heavy airlift requirements.
        Question. The first six HC-130Js are planned to be based at the Air
    Station in Kodiak, Alaska. This would leave the Coast Guard with a mix
    of HC-130Js and Hs in your Pacific Fleet. What are the benefits of an
    all HC-130J Pacific Fleet?
        Answer. In the Pacific Area, C130s operate over some of the world's
    largest expanses of water in the most arduous weather conditions. In
    addition to the performance increases and modern replacement benefits,
    an all C-130J fleet in the Pacific Area would allow the Coast Guard to
    more rapidly grow an experienced operator cadre/community to operate
    and maintain this aircraft. Additionally, the service would benefit
    from reduced training costs, as some members would transfer from one C-
    130J unit to another, eliminating qualification costs. Economies of
    scale would produce parts and logistics support savings as well.
        Question. What are your funding requirements to fully deploy and
    maintain the first six HC-130Js? Is that request contained in the
    President's budget?
        Answer. Total additional funding required to missionize and achieve
    Full Operational Capability (FOC) of HC-130Js by the end of fiscal year
    2007 is $187 million. A funding request for missionization and full
    system acquisition is not included in the President's budget.
                                     ______

               Questions Submitted by Senator Ernest F. Hollings

           OVERALL COAST GUARD BUDGET REQUEST ONLY 6 PERCENT INCREASE

        Question. The Commandant of the Coast Guard testified that the
    Coast Guard was on track to restore resources and performance of non-
    security missions, such as search and rescue of stranded mariners, to
    pre-9/11 levels. However, a draft GAO report (non-public until mid-
    March) finds that the resource hours dedicated to the search and rescue
    mission search & rescue is down 22 percent from pre 9/11 levels. The
    resource hours dedicated to many other non-security missions, such as
    fisheries enforcement, living marine resources, and drug interdiction,
    are all down as well.
        Does this budget really fund the Coast Guard at sufficient levels?
    The request is really only a 6 percent increase over what we enacted
    last year, if you include the supplementals. Why is Coast Guard getting
    so little of the increase when it has so many responsibilities related
    to security and non-security missions?
        Answer. Yes, the fiscal year 2005 budget request is sufficient to
    fund Coast Guard operations. A 6 percent increase is not a fair
    comparison since the fiscal year 2004 Coast Guard budget includes
    supplemental funding provided for Iraqi Freedom and Hurricane Isabel.
    Supplemental appropriations are for specific purposes and are non-
    recurring. Therefore, the fiscal year 2005 Coast Guard budget would not
    reflect this funding.
        While the draft GAO report referenced in this question noted that
    that the resource hours for non-homeland security programs decreased,
    the report also had the following conclusion: ``The Coast Guard's
    performance results--measures used to track each program's annual
    progress--generally did not mirror the trends in resource use. Instead,
    results for programs GAO reviewed were generally stable or improved
    regardless of the resources applied, and nearly all of the programs
    that GAO reviewed met their performance targets.'' (Draft GAO-04-043,
    March 2004).
        Search and Rescue (SAR) is a demand driven mission. While resource
    hours for SAR are down, it is due to less distress calls than from lack
    of resource hours. Also from the GAO report: ``the search and rescue
    program's target for fiscal year 2003 was to save 85 percent of
    mariners in distress and the program achieved this goal by saving over
    87 percent of them.''
        While resource hours are an important measure, the Coast Guard
    relies on the judgment of the operation commander to apply available
    resources based on the risks in the relevant area of operations. This
    flexibility is critical to apply Coast Guard resources to the numerous
    missions mandated in Section 888 of the Homeland Security Act of 2002.
        Question. I am hearing reports that the Coast Guard's resource
    hours for most non-security missions are still down below pre 9/11
    levels. For example, I've heard that the search and rescue mission is
    down 22 percent from pre 9/11 levels. What can you tell me about that?
        Answer. The Coast Guard will continue seeking the appropriate
    balance among all its mission-programs while relentlessly pursuing our
    stated performance goals. In so doing, the Coast Guard will continue to
    focus not only on activity levels (hours), but also on achieving the
    desired outcomes from those levels. Our ability to achieve desired
    outcomes and performance goals have been significantly enhanced through
    improved technology, tactics and procedures making our activities that
    much more effective. Risk-based decision-making by local commanders
    will continue to be the primary driving factor behind the specific
    activity levels (hours) accrued in the course of Coast Guard
    operations.
        The number of resource hours utilized for search and rescue (SAR)
    decreased by 22 percent in fiscal year 2003 from a pre-9/11 average
    level. However, this decrease in resource hours was not indicative of a
    decrease in service or performance. SAR is a demand driven mission, and
    the Coast Guard continues to respond to all mariners in distress. In
    fiscal year 2003, the Coast Guard met its 85 percent SAR performance
    goal by saving 87 percent of all mariners in distress.
        The Coast Guard's SAR program is a system with a variety of
    components. Aircraft, cutters, and boats play a large role in the
    response system, but overall SAR performance is not based on resource
    hours alone. For example, maritime safety and prevention programs,
    technology advancements for the boating public, enhanced communication
    and tracking systems, and improved safety equipment are just a few of
    the initiatives that factor into the Coast Guard's SAR program.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

        Questions. The U.S. Coast Guard awarded General Dynamics Decision
    Systems a $611 million contract to replace its outdated communications
    system in a project titled Rescue 21. This is a massive Federal
    investment in our maritime communications infrastructure. The Rescue 21
    section of the Coast Guard's website, however, has not been updated
    since May 9, 2003, so it is very difficult for the American public to
    keep updated on the project's implementation process and schedule.
    Could you please give me a status update on the project? I understand
    there may be some questions about deficiencies in the design phase of
    the project. Does the Coast Guard have adequate oversight of the
    contractor and are financial controls in place to ensure that the
    public investment is protected? When does the Coast Guard plan to
    implement Rescue 21 on Lake Champlain and Lake Memphremagog to cover
    these important border entry points into the United States? The Coast
    Guard's mission on Lake Champlain can lead to simultaneous rescue calls
    at opposite ends of the lake. First responders often have to rely on
    either a Coast Guard helicopter from southern New England or a Vermont
    Army National Guard helicopter to support them on search and rescue
    missions. Both options take precious hours to implement and cut short
    the window of opportunity for a successful rescue. With the Coast Guard
    seeking a 9 percent increase in their budget this year, are there any
    plans to post a Coast Guard helicopter on Lake Champlain?
        Answers.
    Status Update
        While conducting Formal Qualification Testing (FQT) in January
    2004, several significant software (SW) defects were discovered in
    functional areas such as archive/restore, fault management, channel
    performance, Group Command Centers/Station operations, vessels and
    voice quality that required performance fixes and retesting. An
    additional FQT test event was scheduled for March/April to retest
    defects discovered in January 2004.
        While conducting preliminary FQT testing in early March to prove
    that previous issues had been resolved, GDDS discovered a new defect
    that has a severe impact on the asset tracking functionality of the
    system. This defect was hidden by an earlier problem and revealed by
    the latest software fixes. GDDS is currently working with the equipment
    manufacturer to analyze the defect and identify appropriate corrective
    action. Until GDDS can fix this asset-tracking problem, the FQT
    regression testing is necessarily on hold.
        Consequently, Initial Operating Capability (IOC) and Full Operating
    Capability (FOC) schedules will be impacted by the technical issues and
    testing activities discussed. IOC will be delayed by approximately 1
    year (to Sep 2004), and the Coast Guard anticipates the project being
    45 percent complete by the end of 2005. Achieving FOC in 2006 is at
    risk and is still being evaluated. The Coast Guard and GDDS have formed
    a joint deployment team to streamline the regional deployment process
    and identify tasks that can be performed concurrently or more
    efficiently to complete the maximum number of regions by the end of
    2006. The deployment team is using the experience of the first 6
    regions to redefine processes and align activities to accelerate
    deployment. Future deployment dates of Rescue 21 will depend upon
    GDDS's ability to accelerate their work, deploy innovations and do
    parallel deployments as the system is built out.
        The Rescue 21 section of the Coast Guard's website was recently
    updated on April 9, 2004. IOC and Low Rate Initial Program (LRIP)
    region schedules were updated. Group schedule updates still pending.
    Oversight
        The Coast Guard has 54 staff members dedicated to the Rescue 21
    project. Several of these staff members are dispersed throughout the
    United States to ensure appropriate oversight of the nationwide
    deployment.
        Additionally, the Coast Guard has agreements in place with the
    Space and Naval Warfare Systems Center, San Diego and U.S. Department
    of Commerce National Telecommunication Information Administration
    (NTIA)/ITS Institute for Telecommunication Sciences for technical/
    quality assurance support and Booz Allen Hamilton for project
    management and administrative support.
        Finally, the Coast Guard has leveraged existing GSA contracts to
    award blanket purchase agreements to a public relations firm to assist
    with community/public outreach, an environmental consulting firm to
    ensure compliance with applicable environmental laws and regulations,
    and an information technology firm to ensure contractor performance
    metrics are properly developed, monitored and archived.
    Financial Controls
        Approximately 80 percent of the costs associated with the Rescue 21
    deployment will be paid using fixed price delivery orders. These costs
    were established during the proposal evaluation phase of the project
    and are not expected to change. The remaining 20 percent of the work
    will be paid for using cost plus incentive fee delivery orders for
    which target prices were also established during the proposal
    evaluation phase. Incentive fee contract structures provide motivation
    for the contractor to remain within cost goals.
    Lakes Champlain and Memphremagog
        Lake Champlain will receive Rescue 21 as part of the Activities New
    York deployment currently scheduled for 2005. Lake Memphremagog was not
    identified as part of the Rescue 21 operational requirement, and is not
    scheduled to receive Rescue 21.
    Coast Guard Mission on Lake Champlain
        Coast Guard Station Burlington, located at Burlington, VT conducts
    search and rescue (SAR) on Lake Champlain and responds to approximately
    200-300 cases annually, mostly during a the peak season for
    recreational boaters between June through August. Lake Champlain's
    shoreline includes portions of Vermont, New York and Canada, and
    measures approximately 100 nautical miles (north and south) by eight
    nautical miles (east and west). The Coast Guard's small boat response
    station has 25 persons assigned for Coast Guard missions including
    search and rescue, and also maintains aids to navigation on the lake.
        Coast Guard aircraft from Air Station Cape Cod are capable of
    responding to search and rescue cases on Lake Champlain within the
    Coast Guard's SAR program standards. However, they do not normally do
    so because of the other resources nearby which can provide a quicker
    response. Considering the narrow characteristics of the lake and that
    there are a large number of local responders, including local police
    and fire departments in the cities surrounding the lake, and that
    helicopters from the New York State Police, the Air National Guard, and
    U.S. Customs & Border Protection agency provide search assistance, the
    Coast Guard does not presently have any plans to post an aircraft at
    Lake Champlain.
                                     ______

         Questions Submitted to Transportation Security Administration

                  Questions Submitted by Senator Thad Cochran

                              FLIGHT CANCELLATIONS

        Question. The Department requested a number of international
    flights to be cancelled at the end of December and again in January due
    to intelligence of possible terrorist activity. The cancellations
    caused inconvenience and financial losses for airlines and passengers
    alike and some aviation organizations have publicly questioned the need
    to cancel flights without being made aware of what specific
    intelligence was uncovered.
        Do you feel the Department was justified in the cancellation of
    these flights based on intelligence indicating that commercial
    airliners continue to be at risk of highjackings?
        Answer. The decision to cancel flights was made by the foreign
    carriers and governments upon specific intelligence that warranted such
    action. DHS shared information with our foreign counterparts and
    foreign air carriers, which led to their decisions to cancel flights
    and/or implement enhanced security measures.
        Question. How would you describe the cooperation of commercial
    airliners in the request to cancel these flights?
        Answer. During the holiday period, DHS received specific
    information and shared it appropriately with French and British allies,
    resulting in their decisions to cancel these flights. DHS and our
    European allies continue to work in close collaboration to share best
    practices and enhance aviation security.
        Question. Are passenger manifests being provided in a timely
    fashion by the airlines to the Department of Homeland Security?
        Answer. Air carriers as a general rule are fully compliant with
    existing CBP requirements for advanced passenger information system
    (APIS) transmissions, which must be submitted after takeoff. However,
    to vet flights of interest over the holiday threat period, TSA required
    that, upon request, airlines provide DHS with passenger manifests a
    specified time in advance of departure. All such requests were
    generally accommodated, and DHS continues to work closely with both the
    State Department and foreign carriers to ensure that additional
    requests are accommodated appropriately.
        Question. With intelligence showing that terrorists have considered
    a dirty bomb or a chemical or biological weapon release on airliners,
    what precautions are in place at our Nation's airports to prevent a
    possible radiological, nuclear, chemical or biological attack on an
    aircraft?
        Answer. TSA believes that existing operating procedures and current
    technology in the area of explosives detection would enable TSA to
    detect and interdict such a threat. In addition, the Department of
    Homeland Security continues to fund an aggressive program to improve
    the technology capable of detecting and mitigating such threats. As you
    are aware, TSA is also working to replace its passenger prescreening
    system to improve our ability to detect and stop any terrorist
    attempting to board an aircraft, including one possessing
    unconventional weapons.
        Question. Secretary Ridge testified before this Committee that the
    Executive amendment which directed the airlines to place Federal air
    marshals on international flights should have more appropriately been
    sent through diplomatic channels first. What new protocols or
    procedures have since been implemented by the Transportation Security
    Administration to communicate through diplomatic channels in the event
    that future flights are determined to be at high risk of terrorist
    attack?
        Answer. The regulatory instrument that allows TSA to require
    additional security of foreign air carriers is an emergency amendment
    to the security program of the affected foreign air carrier. It is the
    regulated party, (i.e. the air carrier) which must be the recipient of
    that instrument. However, we are aware that issuance of emergency
    amendments alone does not provide enough information to the foreign
    authority (which may differ from country to country) responsible for
    air marshals or other security functions involved in an emergency
    amendment. To remedy this, TSA, under DHS leadership, will use
    diplomatic channels, particularly in cases requiring immediate action
    by foreign air carriers, to inform affected air carriers and the
    foreign authority of their respective government concurrently. TSA will
    work through the Department of State and the affected U.S. Embassies,
    which will, in turn, reach out to the appropriate foreign authority to
    ensure that the requirements of the emergency amendment are conveyed.

                                 RAIL SECURITY

        Question. Under Secretary Hutchinson testified before this
    Committee previous to the terrorist train bombings in Madrid that the
    Transportation Security Administration is working with other Federal
    Departments and agencies within the Department of Homeland Security to
    secure various transportation sectors including rail. The Department of
    Homeland Security recently announced additional security initiatives to
    further reduce vulnerabilities to transit and rail systems.
        In light of the attacks that took place on light-rail, passenger
    trains in Spain recently can you further elaborate on the luggage
    screening pilot program announced recently to be carried out by the
    Department of Homeland Security and coordinated with Amtrack and the
    Federal Railroad Administration?
        Answer. TSA, AMTRAK, and Federal Railroad Administration have
    combined efforts to institute a passenger and carry-on baggage
    screening prototype for explosives in a rail environment known as the
    Transit and Rail Inspection Program (TRIP). Under this project, TSA
    will seek to determine the feasibility of screening in a passenger rail
    environment. TSA hopes that such a project will help identify measures
    that would permit an appropriate level of screening that reflects the
    individual characteristics of each type of passenger rail traffic. The
    pilot project leverages present and prototype technologies and will
    evaluate their feasibility in a rail environment. As the primary
    stakeholder, AMTRAK is immersed in the review and implementation of
    this project. This program is expected to commence by early May 2004.
        Question. What new technologies and screening concepts will be
    implemented?
        Will explosive detection systems and/or explosive trace detection
    which are used to screen luggage placed on airliners be used to screen
    luggage placed on trains?
        Answers. The pilot program will assess different types of screening
    equipment already in use or being tested today.
        Question. Will additional funding be requested by the
    Transportation Security Administration for the additional rail security
    measures announced yesterday either by a supplemental funding request
    or by budget amendment?
        Answer. TSA will fund the additional rail security initiatives that
    were recently announced from within its fiscal year 2004 appropriation
    for Maritime and Land Security. For fiscal year 2005, there are no
    plans to seek additional funding for rail security above what is
    included in the fiscal year 2005 President's Request.
        Question. Can you provide further detail on how the Transportation
    Security Administration is using the expertise of Information Analysis
    and Infrastructure Protection (IAIP) and Science and Technology (S&T)
    assistance to prevent a terrorist attack on our railways and also on
    our subway systems?
        Answer. TSA staff and its parent directorate, the Border and
    Transportation Security Directorate, work closely and collaborate on a
    daily basis with both S&T and the Information Analysis (IA) and the
    Infrastructure Protection (IP) Divisions of the IAIP Directorate, on
    issues related to rail and transit security. IA shares intelligence and
    threat analysis daily with all DHS entities and other relevant
    stakeholders. Since the Madrid bombings, DHS stood up a working group
    to develop operational Courses of Action (COAs). Members of this
    working group include representatives from BTS, TSA, IA, IP and the
    Department of Transportation.
        TSA has partnered with IP on several important issues in
    safeguarding our nation's critical infrastructure including working
    together to conduct vulnerability assessments and security reviews.
    Moreover, IP has invited TSA to participate in site assistance visits
    (SAV) to determine a baseline level of security for select elements of
    the nation's critical infrastructure. One current example involves a
    joint assessment of subway system ventilation shafts to determine
    vulnerability to chemical or biological attack. Additionally, TSA, in
    coordination with FRA, IP and industry representatives, is currently
    conducting an in-depth assessment of the District of Columbia rail
    corridor.
        TSA has been communicating its operational requirements to the
    Science and Technology (S&T) directorate. TSA has engaged S&T in an
    effort to help meet the more immediate R&D needs of screening
    passengers and their baggage in the rail and transit environment with
    relevant technologies sensitive to the operational concerns of
    throughput and high levels of detection.
        TSA works closely with IA and S&T to better understand and prevent
    terrorist attacks on our Nation's railroads. Our warning and
    information products are vetted with IA and S&T representatives to
    provide the best informed assessments possible. Additionally, vetting
    and strong analyst-to-analyst coordination ensure strong positive
    information sharing across the Department.
        Question. Have vulnerability assessments been completed by
    Information Analysis and Infrastructure Protection on high-density
    urban areas to target resources toward the railways greatest weaknesses
    or are these assessments still taking place?
        Answer. On May 14, 2003, the Department of Homeland Security
    awarded $65 million in Mass Transit Grants to help secure the 20
    highest risk transit systems in the United States based on ridership.
    The money may be used for the following: (1) the installation of
    physical barricades; (2) area monitoring systems such as video
    surveillance, motion detectors, thermal/IR imagery and chemical/
    radiological material detections systems; (3) integrated communications
    systems; (4) prevention planning, training and exercises; and/or (5)
    operations activities conducted during ORANGE alert from January 2003
    through April 2003. New York City Transit received $26.7 million, 41
    percent of the $65 million. The Chicago Transit Authority, the second
    largest transit agency by ridership, received $5.1 million.
        On November 13, 2003, the Department of Homeland Security awarded
    another $53 million to the top 30 transit agencies with heavy rail,
    subway and commuter rail systems. A weighted average factoring both
    ridership and system route miles was used to determine the amounts
    received. Each qualifying system received no less than $800,000. Due to
    the previous allocation of funds to New York City Transit, the MTA
    subway system was capped at $10 Million, allowing for the allocation of
    more funds to other properties.
        The grants were administered by DHS's Office for Domestic
    Preparedness (ODP). TSA provided modal expertise to ODP on the
    allotment of this grant money to the mass transit industry.
        TSA is currently conducting an assessment of critical mass transit
    assets. The results will be used to identify locations for enhanced,
    facilitated assessments. To-date, TSA has performed an assessment on
    approximately 65 percent of critical subway assets. Approximately 30
    percent of light rail critical assets have been assessed. The
    criticality assessment of mass transit assets is scheduled for
    completion by July 2004.
        DHS has conducted Site Assist Visits (SAVs) of several rail
    stations in high-density urban areas, including New York's Penn Station
    and Grand Central Station and Washington D.C.'s Union Station. Teams of
    security experts, along with the owner/operator of the site, identifies
    vulnerabilities and suggest remediation actions. Thanks to these and
    other visits to rail facilities, we have compiled Common
    Characteristics and Vulnerability reports and Potential Indicators for
    Terrorist Attack reports (CV/PI) for railroad yards and railroad
    bridges and disseminated them to owners/operators, security planners,
    and law enforcement agencies. The Department has also funded a study of
    possible protective measures that can be applied to railcars
    transporting chemicals and recommendations are expected shortly. In
    addition we have received dozens of other rail and subway vulnerability
    assessments, including those for the 30 largest systems in the country
    and have included them in our database. We have also completed an
    assessment of a 15 mile DC corridor for HAZMAT rail shipment and are
    considering additional assessments in other major urban areas.

                                   AIR CARGO

        Question. Congress provided $85 million for fiscal year 2004 for
    the Transportation Security Administration to hire additional screeners
    to inspect air cargo and for research and development of explosive
    detection systems in order to screen for explosives in air cargo, both
    the larger palletized cargo and the individual pallets, or individual
    boxes known as ``break bulk''.
        With the increase in air cargo security funding provided for fiscal
    year 2004, how many additional screeners have been hired to inspect air
    cargo to date, and when do you expect to be fully staffed?
        Answer. As of March 23, 2004, the funding provided in the
    Department of Homeland Security Appropriations Act, 2004 (Public Law
    108-90) enabled TSA to hire 100 new cargo inspectors. All 100 cargo
    inspector positions have been selected, and paperwork is being
    processed by TSA Human Resources. We anticipate extending job offers to
    these applicants and bringing them on board within the next 2 months.
        Question. What is the status of laboratory testing of commercial
    off-the-shelf explosive detection systems on air cargo?
        How has the current technology performed on break bulk cargo?
        When do you expect to issue a request for proposal for this
    technology, and when will a pilot program begin at selected airports?
        Answer. TSA, working with the air carriers, has screened cargo
    using Explosives Detection System (EDS) technology currently deployed
    at airports for checked baggage screening. TSA also issued a Market
    Survey for vendors of currently available explosives detection
    technology for break bulk cargo screening and is in the process of
    conducting a lab evaluation and pilot test for the equipment that has
    been offered by vendors for evaluation. The controlled study of
    suitability of use of the currently available EDS technology is
    scheduled to begin in June and will be completed by September 30. Once
    that study is completed, TSA will determine to what extent the
    technology is a feasible solution for some categories of cargo
    screening. TSA is planning on issuing an RFP in the third quarter of
    fiscal year 2004 to solicit additional vendors to participate in lab
    evaluations and airport pilots for break-bulk cargo screening.
        TSA has also issued an RFP for technology to screen containerized
    cargo and U.S. mail. TSA is currently evaluating the proposals
    submitted under that RFP and anticipates awarding grants for technology
    development in the fourth quarter of fiscal year 2004.
        Question. Can the Committee expect to receive by April 1, 2004, the
    report directing TSA to provide options to inspect air cargo, the
    associated costs, and timetable for pursuing technological solutions to
    allow for the most efficient and targeted inspections of cargo being
    carried on passenger aircraft?
        Answer. TSA has prepared the report to Congress covering potential
    technology solutions for cargo screening. Once review and coordination
    is completed through DHS, the report will be delivered to Congress.
        Question. What enhancements are being made to the current Known
    Shipper program to guarantee the safety of air cargo?
        Answer. Since 9/11, significant enhancements have been made to the
    Known Shipper program. The requirements for new shippers applying for
    Known Shipper status have been strengthened. In addition, methods for
    confirming the authenticity of established Known Shippers have been
    improved. In order to substantiate the legitimacy of known shippers
    further, air carriers have been required to conduct site visits of
    known shippers' facilities. Additionally, TSA is close to completing an
    automated Known Shipper Database, which will allow TSA to vet
    applicants to the program more thoroughly for legitimacy by comparing
    data submitted by applicants against terrorist watch lists, other
    government databases, and other publicly available information.
    Eventually, TSA's Known Shipper Database will be one part of a larger
    freight assessment database intended to target high risk cargo
    shipments for additional screening.
        Question. Would it currently be feasible to inspect 100 percent of
    all air cargo being placed on aircrafts, as proposed by some in
    Congress, and, in your opinion, how do you feel the flow of commerce
    would be affected if air cargo was restricted from being placed on
    aircraft unless 100 percent inspection of air cargo took place?
        Answer. It is neither feasible nor optimal to physically inspect
    100 percent of air cargo. The sheer volume of air cargo transported in
    the United States and limitations on available technology render the
    inspection of all air cargo infeasible without a significant negative
    impact on the operating capabilities of the transportation
    infrastructure of the United States and the national economy.
    Limitations of technology and infrastructure make physical screening of
    100 percent of air cargo impractical in terms of the flow-of-commerce.
    This would also be an ineffective use of homeland resources.
        TSA's goal is to ensure that all cargo is screened to determine
    risk and that 100 percent of high-risk cargo is inspected. TSA is
    aggressively pursuing next-generation technological solutions.
    Meanwhile, TSA is taking steps to implement measures outlined in the
    Air Cargo Strategic Plan and is doing everything possible to ensure
    that cargo going on planes is secure, including requiring random
    inspections of passenger air cargo, prohibiting the transport of cargo
    on passenger aircraft by unknown shippers, and increasing the number of
    TSA air cargo compliance inspectors.
        Question. To date, what has been learned of the pilot program
    conducted by the Transportation Security Administration, the United
    States Postal Service, and air carriers to assess the feasibility of
    using canine teams to screen certain classes of priority mail?
        Answer. In early 2002, TSA, the U.S. Postal Service (USPS) and the
    aviation industry agreed that additional security screening measures
    needed to be identified and developed before resuming transport of mail
    on passenger aircraft. We agreed that explosives detection
    effectiveness, throughput capacity, and costs associated with the
    screening were paramount considerations in identifying additional
    measures. Protecting the privacy of mail was also a critical factor in
    determining the least intrusive method to be used.
        In June 2002, TSA conducted operational tests and evaluations
    (OT&E) at six major airports with assistance from the USPS and airline
    industry. The purpose of these tests was to determine and demonstrate
    the ability of TSA-certified explosives detection canines to detect
    explosives in packages that simulated Express Mail and Priority Mail
    products and which were independently introduced into actual mail. We
    also wanted to compare the throughput capabilities of both X-Ray and
    canine resources under actual airline operational conditions.
        The results were successful. In November 2002, TSA established
    eleven major airport canine screening operations for priority mail
    exceeding a certain threshold through partnership agreements with the
    USPS and the airline industry. To date, over 17 billion packages have
    been successfully screened by TSA-certified explosives detection canine
    teams. Currently we are expanding our TSA Canine Pilot screening
    efforts into various cargo and mail equipment configurations. TSA is
    proceeding with OT&E in two phases:
      --Phase I tested various explosive targets/distracters that were
            introduced into multiple cargo configurations at six major
            airports. All testing was conducted under actual cargo
            operations and various weather conditions. The OT&E is complete
            and the preliminary results are promising. The final report is
            due at the end of April 2004.
      --Phase II is tentatively scheduled to begin in May 2004 and to be
            completed in July 2004. The tests will be conducted at six
            major airports where we will expand explosives detection
            investigation using multiple cargo airline containers, airline
            ground support equipment and USPS rolling stock equipment
            configurations under actual cargo/mail operations and
            environments. Test results will be analyzed and recommendations
            will be proposed to expand and streamline screening of cargo
            and mail exceeding a certain threshold at other major airports
            using TSA-certified explosives detection canine teams along
            with other technologies for mail and cargo being transported on
            passenger aircraft.
          computer assisted passenger pre-screening system (capps ii)
        Question. The President's fiscal year 2005 budget requests a $25
    million increase for the Computer Assisted Passenger Pre-screening
    System (CAPPS II) currently being tested by the Transportation Security
    Administration. However, CAPPS II has been slow in developing because
    of delays in obtaining passenger data needed for testing due to privacy
    concerns by air carriers.
        How is the Department working with the airlines to alleviate
    privacy concerns in light of recent disclosures that air carriers have
    shared passenger records with other government agencies and private
    contractors without the passengers knowledge?
        Answer. Comprehensive privacy training--in-person, online, and via
    video, for all employees is underway and on track towards completion by
    the end of calendar year 2004. TSA has already completed an initial
    ``privacy education week'' for all 55,000 employees that included live
    and video privacy training. Many other components of DHS already have
    systematic privacy education for employees--both upon hiring and
    annually thereafter. The DHS Chief Privacy Officer, assisted by a
    privacy compliance officer, has undertaken a DHS-wide review of
    internal education programs to ensure that all employees are aware of
    and tested on privacy practices and principles. The Privacy Office will
    report on the progress of this program in its annual report to Congress
    later this spring, and annually thereafter. Further, the DHS Chief
    Privacy Officer proposed the implementation of rules in the public and
    the private sector governing the use of private-sector data. The DHS
    Privacy Office has already begun work with numerous private-sector
    industry groups to facilitate that work. Organizations such as the U.S.
    Chamber of Commerce, the Council for Excellence in Government, the Air
    Transport Association, the Markle Foundation, and others, are all
    considering the evolution of public-private information partnerships.
    Further, the Department is reviewing the need for a department-wide
    Privacy Statement that would include principles for the use of private-
    sector data. Again, many DHS components already have their own privacy
    statements. We look forward to publishing a DHS Privacy Statement later
    this summer.
        Question. When will the Department issue a security directive to
    mandate airlines to turn over passenger information to test the CAPPS
    II system?
        Answer. A timeframe for collection of passenger data for testing is
    still under review.
        Question. How can assurances be made to prevent identity theft by a
    potential terrorist intent on using legitimate individuals information
    to get around the CAPPS II background checks?
        Answer. While no system can be 100 percent effective in preventing
    identity theft, we believe that the CAPPS II system will represent a
    quantum leap forward in efforts to defeat this growing problem. CAPPS
    II will rely on an improved version of the best practices used by the
    banking and credit industries to combat identity theft and fraud.
        Where a legitimate identity is stolen, there is any number of
    indicia, including errors or inconsistencies in the information as
    transmitted by the thief, which could reveal the theft. Further, CAPPS
    II will make use of a database containing up-to-date information about
    stolen identities, which will further protect against terrorists who
    use this means to conceal themselves.
        Again, no system can be 100 percent effective, which is why CAPPS
    II will be part of a layered ``system of systems'' involving physical
    scrutiny, identity-based risk assessment, and other security
    precautions on aircraft and at airports.
        Question. Do you feel that such a funding increase is warranted for
    CAPPS II with the delays that have been faced to date?
        Answer. Yes, because we expect a new system to be put in place
    during fiscal year 2005, which will require an increase in resources.
        Question. The system currently operated by commercial airlines
    since 1996, CAPPS I, continues to have problems with ``false
    positives'' where passengers are erroneously delayed or prohibited from
    boarding their scheduled flights due to having a similar name with
    individuals that have been flagged by airlines as being a potential
    terrorist.
        With the problems faced in the current CAPPS I system, what method
    of redress will be implemented with CAPPS II to resolve complaints of
    passengers who believe they are erroneously selected for additional
    security?
        Answer. First, it is important to note that the ID authentication
    portion of the CAPPS II program under development is expected to reduce
    dramatically the percentage of individuals mistakenly flagged for
    automatic additional security screening. In the instances where
    individuals believe they have been mistakenly flagged under CAPPS II,
    TSA is committed to providing a fair, comprehensive, and customer-
    friendly redress process. As part of the development of the CAPPS II
    system, we are designing a redress process to resolve complaints by
    passengers who assert that they have been incorrectly prescreened or
    consistently selected for enhanced screening. An essential part of the
    redress process is the establishment of the CAPPS II Passenger
    Advocate. The Passenger Advocate will act as a surrogate for passengers
    who, for security classification reasons, will not have access to all
    the information used by CAPPS II. When a passenger submits a complaint
    and provides the Government with permission to observe and monitor the
    results of the risk assessment during the complainant's future flights,
    TSA will work with other government agencies and commercial data
    providers to determine if the complaint is related to prescreening or
    due to another part of the screening process (e.g., random selection),
    and determine if selection by CAPPS II is related to data that may be
    appropriately corrected. Passengers will be afforded the opportunity to
    appeal these results to the TSA Privacy or Civil Rights Office and
    then, if warranted, to the DHS Privacy or Civil Rights Office. The
    redress program will be published and widely publicized before CAPPS II
    is implemented.
        Question. How does a passenger clear one's name if he or she
    continues to be flagged as a flight risk?
        Answer. Under the current system passengers may be required to
    undergo secondary screening or be subject to other additional security
    procedures due to random selection, CAPPS I selection, or the TSA-
    administered No-Fly List. In addition, airlines may have their own
    criteria for singling out travelers distinct and independent of the
    current system. Since CAPPS I is administered by the airlines, TSA is
    only in a position to address passengers flagged as a flight risk based
    on the No-Fly List.
        The Transportation Security Administration (TSA) currently has
    established procedures within the Office of the Ombudsman to receive
    and resolve complaints by any passenger denied boarding because the
    individual's name appears on the No-Fly List. A traveler who contacts
    TSA regarding possible discrepancies within the current system is asked
    a series of questions to ascertain whether the issue is related to the
    No-Fly List. If it is related to the No-Fly List, the traveler submits
    a written description of the problems encountered and proof of
    identity. Upon receipt, TSA will determine whether there is any threat
    to aviation or national security that would prohibit the individual
    from flying. TSA may conduct a background check in making this
    determination. If the traveler is cleared to fly, air carriers and
    other appropriate parties will be notified. The TSA Office of the
    Ombudsman will forward a letter to notify the individual of the
    results.
        CAPPS II, if implemented, will improve this system considerably.
    CAPPS II will reduce the number of persons requiring additional
    screening by ending the use of outdated information and rules resident
    in the CAPPS I system. Further, by using risk analysis and identity
    authentication tools, CAPPS II should substantially reduce the number
    of travelers automatically selected for secondary screening.

                            RESEARCH AND DEVELOPMENT

        Question. The Congress made $154 million available for the
    Transportation Security Administration (TSA) to conduct research and
    development activities in an effort to improve current transportation
    sector security technology. Of the funds provided for fiscal year 2004,
    the Transportation Security Administration will target detection of
    chemical, biological, or similar threats and devices that could be
    released on or within an aircraft. With the testimony of Secretary
    Ridge before this Committee last month that the Department does not
    currently have the capability to screen for biological weapons that may
    be carried on board a commercial airliner, significant concern is
    warranted.
        Will the Transportation Security Laboratory conduct separate
    research on methods to detect chemical or biological weapons or will
    this research be coordinated with the Science and Technology (S&T)
    Directorate and the work carried out currently within that
    directorate's Biological Countermeasures Portfolio?
        Answer. TSA will be working closely with the S&T Directorate to
    identify technological solutions for screening to detect chemical and
    biological weapons. The TSA's Transportation Security Laboratory will
    play a critical role in identifying TSA's needs and specific
    operational considerations that must be taken into account as potential
    technologies are developed.
        Question. The Transportation Security Laboratory previously focused
    solely on the threat to civil aviation but has begun research and
    development on threats against cars and trucks by explosives.
        How will the Transportation Security Laboratory coordinate its
    research on transportation targets with the Science and Technology
    Directorate's High Explosives Portfolio?
        Answer. TSA has a strong working relationship with the S&T
    Directorate. We continue to meet with S&T personnel on a regular basis
    to discuss ongoing projects to ensure no duplication of efforts and to
    ensure projects undertaken are consistent with the overall goals of
    DHS.
        Question. Of the funds provided for fiscal year 2004, $45 million
    has been made available to develop next-generation Explosive Detection
    Systems (EDS) for the detection of explosive materials in passengers
    checked baggage.
        How has the research and development progressed to date to enhance
    the performance of existing Explosive Detection Systems that are
    currently deployed at airports and also with manufacturers of new
    technologies and when will these new technologies be ready for
    deployment in our nation's airports?
        Answer. Advances including reductions in false alarms, improved
    machine reliability, and reductions in operational expenditures have
    sufficiently matured where they will begin to be deployed by no later
    than next year based on currently-planned equipment deployments.
    capability, increased throughput, and reduce the size of EDS solutions.
    Some equipment will be best suited for smaller airports or checkpoints,
    while other equipment is being designed for in-line deployment.
        New technologies will be developed under TSA's Manhattan II
    project. TSA will be posting a request for information in the third
    quarter of fiscal year 2004. While TSA will explore the potential of
    all relevant technologies, we expect promising technologies to include
    the demonstration of novel x-ray sources, different geometry, and the
    development of multi-spectral detector arrays. Combined technologies
    may play a role, and nanotechnology may provide new elements for
    detection strategies.
        Question. Are there any new threat analyses that warrant a need to
    expand the criteria for certifying Explosive Detection Systems that are
    not currently included in the screening of passenger baggage?
        Answer. TSA continually evaluates its certification criteria for
    explosives detection technology to ensure both the types and amounts of
    explosives that the technology can identify are reflective of the
    threat. TSA has efforts underway to expand the types of explosives that
    can be identified, while also reducing the amount of explosives that
    would automatically trigger detection.
        Question. The Presidents fiscal year 2005 budget proposes to
    consolidate all research department-wide into the Science and
    Technology Directorate, except for the research carried out by the
    Transportation Security Administration's Laboratory. With the concern
    of carrying out research in a parallel manner do you believe it would
    best serve the Department if the Transportation Security Administration
    research and development activities were consolidated with the Science
    and Technology Directorate research activities?
        Answer. TSA believes that the constant demand for improved
    technology performance and the very specific detection capabilities
    needed to support TSA's mission requires that TSA have a highly
    specialized applied R&D program. As new weapons are developed, TSA must
    be able to meet its immediate operational needs by refining and
    enhancing current technologies to counter those threats and by
    identifying gaps to ensure R&D is well focused on continually improving
    capabilities. TSA must also be able to leverage its human factors
    efforts to identify methodologies, training and operational tools, and
    develop technology that will foster improved performance. TSA will
    continue to coordinate closely with the S&T to ensure that we can adapt
    to and address changing threats without duplicating S&T's efforts.
        Question. In the search for new technology to detect and prevent
    weapons and explosives from being carried onto airliners, the
    Transportation Security Administration is evaluating technologies to
    make the screening process more effective and less time-consuming. How
    has the research and piloting of new passenger checkpoint technologies,
    such as passenger body scanners and explosive trace detection portals,
    made promising advances in detecting explosives and/or biological or
    chemical weapons from being carried onto commercial airliners and when
    do you believe the piloting of these new technologies at airports will
    take place?
        Answer. TSA has developed a roadmap for the operational testing and
    evaluation of checkpoint technologies to improve TSA's ability to
    detect explosives being carried on persons and in carry-on baggage.
    Highlights from our Roadmap are as follows:
      --Explosives Detection Portals.--Continued development and pilot
            deployment in the 3rd quarter of fiscal year 2004;
      --Document Scanners.--Continued development and pilot deployment in
            the 2nd or 3rd quarter of fiscal year 2004;
      --Cast & Prosthetic Device Scanners.--Continued deployment and pilot
            deployment in the 2nd quarter of fiscal year 2004;
      --Explosives Detection Systems (EDS) for carry-on baggage.--Define
            performance metrics and solicit vendor participation 2nd or 3rd
            quarter of fiscal year 2004;
      --Explosives Detection Technology for screening liquids.--Establish
            the performance metrics for this technology and solicit vendors
            of existing technologies to participate in an evaluation
            against this qualification standard.

         LETTERS OF INTENT (LOI) FOR EXPLOSIVE DETECTION SYSTEM (EDS)
                                  INSTALLATION

        Question. The Congress has made available over $1.5 billion for the
    installation of explosive detection systems and the Letter of Intent
    (LOI) program to safeguard commercial airliners from a terrorist attack
    by explosives.
        What savings can be achieved on an airport-by-airport basis in
    personnel costs by installing Explosive Detection Systems ``in-line''
    as opposed to terminal lobby protocols?
        Answer. The degree of costs vs. benefits will vary from airport to
    airport because of differing airport configurations. TSA is in the
    process of refining its return on investment analysis model at the same
    time that it is revising its staffing model. TSA will continue to
    assess the extent to which in-line systems benefit operational
    efficiency.
        Question. With the current cost share in place (90/10) and the
    President's budget request of $250 million, how many Letters of Intent
    does TSA intend on signing in fiscal year 2005?
        Answer. TSA currently expects that all resources will be utilized
    for currently-signed LOIs as well as other EDS integration activities.
    However, TSA will assess the need for additional in-line integration
    and resource availability on an ongoing basis.
        Question. How much of the $1.5 billion made available by Congress
    remains available for terminal modifications and what is the cost
    estimate to meet the necessary terminal modifications required at all
    commercial service airports across the country?
        Answer. The $1.488 billion appropriated in fiscal years 2002, 2003
    and 2004 has been used for the following requirements:
      --$828 million to cover facility modification and equipment
            installation costs to meet the Congressional mandate to provide
            for and conduct 100 percent screening of all checked baggage
            for explosives at over 440 airports,
      --$259.4 million in support of the first eight completed Letters of
            Intent (LOIs), including the 2 LOIs issued on February 15,
            2004,
      --$20 million for contract support to complete various tasks
            associated with the installation of explosives detection
            systems (EDS) and explosives trace detection (ETD) equipment,
            including site acceptance testing of EDS and ETD equipment at
            the time of delivery from the vendors and once installed at an
            airport, engineering and installation services from equipment
            vendors, and administrative and technical support work,
      --$30 million to individual airports for completion of projects
            associated with EDS/ETD equipment installation, including HVAC
            installation, demolition work, and electrical work,
      --The remaining $350 million of the fiscal year 2004 installation
            funding will be allocated for direct contracts between TSA and
            individual airports for in-line EDS installations, with a
            portion to be carried over into fiscal year 2005 to use along
            with fiscal year 2005 funding to make fiscal year 2005 LOI
            reimbursement payments for the 8 existing LOIs.
        Question. Will the agency fund terminal modifications at airports
    outside of the LOI process?
        Answer. At the current funding level, and applying the 75/25 cost
    share formula, TSA can support the following:
      --Reimbursement payments for the 8 existing LOIs;
      --Installation and multiplexing of EDS technology at the LOI
            airports; and
      --EDS and ETD non-LOI installation work needed at 12 airports to
            provide equipment capacity. The airports selected in this
            category have a need for increased equipment capacity because
            of increased passenger loads and airport terminal expansion
            projects to support increases to air carrier service.
        Question. With so many needs and limited resources, how is the
    agency prioritizing on an airport-by-airport basis?
        Answer. TSA continues to use its prioritization factors to
    determine where limited resources will be allocated. TSA's first
    priority is to achieve compliance with the 100 percent electronic
    screening requirement at all airports. Simultaneously, TSA is working
    with airports that will not be able to maintain compliance with the 100
    percent electronic screening requirement because of increased passenger
    loads, increased and/or additional air carrier service, and/or airport
    terminal modifications and expansions.

                        PASSENGER AND BAGGAGE SCREENERS

        Question. In a report issued last month reviewing the
    Transportation Security Administration's process for conducting
    background checks on Federal passenger and baggage screeners, the
    Inspector General of the Department of Homeland Security made a list of
    twelve recommendations to the Administrator of the Transportation
    Security Administration to improve its management of the background
    check process for screeners. What procedures have been put into place
    to guarantee all passenger and baggage screeners that are currently
    employed and also individuals that are applying for a screening
    position have a full background check?
        Answer. TSA is aggressively implementing the Inspector General's
    (OIG) twelve recommendations. A significant part of our actions have
    been focused on ensuring that all screeners have had the necessary
    background checks and that all screener candidates receive a background
    check before they are hired.
        Processes are in place to ensure that all screener candidates are
    subject to a fingerprint based criminal history check that is
    successfully adjudicated BEFORE they are hired. In addition, prior to
    hiring, all screener candidates undergo a commercially conducted pre-
    screen investigation that checks criminal history (based on an FBI
    fingerprint check and a check of local criminal histories), credit
    history and specific watch lists (TSA's No Fly and Selectee Lists).
    Successful adjudication of both the fingerprint check and the
    commercially conducted pre-screen investigation are absolute
    requirements before hiring takes place. After hiring, all new screeners
    undergo an Office of Personnel Management (OPM) Access National Agency
    Check and Inquiries (ANACI) investigation.
        This combination of background checks, both before and after
    hiring, provides the best available process to ensure security while
    maintaining a fully staffed screener workforce. The pre-employment
    checks (the fingerprint check and the commercially conducted pre-screen
    background check) take approximately 2-3 weeks to complete, thus
    allowing timely hiring of screeners. The OPM-conducted ANACI is more
    thorough but takes several months to complete; the ANACI provides a
    more in-depth review of a person's background which further mitigates
    security risk. TSA undertook a major effort in Q3/Q4 of fiscal year
    2003 to complete and adjudicate the required background checks
    (fingerprint, pre-employment and OPM ANACI) on all currently employed
    TSA screeners. Since then, all newly hired screeners have been subject
    to the processes and checks described above for screener candidates.
        Question. The Transportation Security Administration is currently
    in the process of an annual recertification of airport screeners to be
    completed by the end of this month.
        Can you explain the testing standards of the recertification
    process and what contractor oversight TSA is performing to ensure
    adequate testing the screeners for recertification is being carried
    out?
        Answer. The Aviation and Transportation Security Act (ATSA)
    requires that TSA shall conduct an annual proficiency review of each
    individual assigned screening duties.
        TSA completed the 2003/2004 re-certification process in March 2004
    for both Federal and private contract screeners. TSA is meeting this
    requirement through a national re-certification program for
    Transportation Security Screeners, Leads, and Supervisors. For the
    2003/2004 re-certification cycle (October 2003 through March 2004), the
    program consisted of a series of certification modules for either the
    Passenger/Dual Function (Passenger and Checked Baggage) or Checked
    Baggage screening function. The modules used were:
        Passenger/Dual Function Screeners:
      --Module 1.--Standard Operating Procedure (SOP) Job Knowledge Test,
            (Screener and Supervisor versions)
      --Module 2.--X-Ray Image Interpretation Test, and
      --Module 3.--Practical Skills Demonstration
        Checked Baggage Screeners:
      --Module 1.--SOP Job Knowledge Test (Screener and Supervisor
            versions) and
      --Module 3.--Practical Skills Demonstration
        In addition, a screener must have a ``meets standards'' for his/her
    annual Performance Rating by the FSD at his/her airport to be re-
    certified.
        The national re-certification program's objective is to ensure that
    screeners demonstrated proficiency in the knowledge and skills that are
    critical to a screener's ability to provide world class security and
    world class service. As part of the development of this program, TSA
    employed a rigorous technical process to develop the assessment content
    and set proficiency requirements (i.e., passing scores) for each
    module. TSA implemented a valid and fair assessment process with the
    appropriate standards in place to certify that its screener workforce
    is proficient and capable of providing the security and service
    expected.
        Modules 1 and 2 were administered by local FSD staff (in most cases
    the airport Training Coordinator). Our training contractor, Lockheed
    Martin, administered Module 3. TSA government employees conducted
    quality assurance audits of the contractor throughout the re-
    certification process and observed approximately 16 percent of the
    airports re-certification practical demonstrations.
        Question. Are the screeners being tested on TSA standard operating
    procedures and what is the pass/fail rate of the screeners that have
    been tested so far?
        Answer. Yes, screeners were tested on the standard operating
    procedures in Modules 1 (SOP knowledge test) and Module 3 (Practical
    skills demonstration). Less than 1 percent of the screeners failed
    fiscal year 2003-04 re-certification testing.
        Question. Congress limited the number of screeners employed by TSA
    to 45,000 full time-equivalents (FTE). Currently TSA is under that
    threshold and intends on hiring more screeners to comply with the
    45,000 cap. Do you believe that the 45,000 FTE limitation gives TSA an
    adequate number of screeners to carry out passenger and baggage
    screening?
        Answer. TSA is managing to keep the workforce under the 45,000 FTE
    level by creating a more flexible workforce. TSA is better coordinating
    airline schedules and passenger load with staffing needs, is increasing
    the proportion of part-time to full-time screeners, and is
    strategically using its mobile national screener force to meet seasonal
    fluctuations in workload. TSA expects to have a part-time screener
    workforce of close to 20 percent by the end of the current fiscal year.
    Part-time screeners create additional operational flexibility when
    scheduling screeners to satisfy varying levels of demand. As a result
    of reducing excess capacity at periods of lower demand, TSA is seeking
    to make more FTEs available to the system as a whole during peak
    periods.
        Question. Is the 10 minute passenger screening standard wait-time
    still in place or have new standards been implemented?
        Answer. TSA is committed to providing world-class customer service
    while ensuring freedom of movement for people and commerce by keeping
    our nation's transportation systems secure. We have done research,
    including focus groups, on customer satisfaction and devised a more
    robust methodology to assess the passenger experience, focusing not
    just on wait times, but on the totality of customers' interactions with
    the full range of screening processes. We have found that wait time is
    not a significant driver of the public's satisfaction with and
    confidence in TSA. In fact, most respondents in focus groups said that
    they would rather wait longer in line if security was better, and it is
    more important that the security process be thorough, attentive, and
    efficient than merely fast.
        In light of feedback from our research, TSA has developed a
    Customer Satisfaction Index for Aviation Operations (CSI-A). The CSI-A
    is comprised of results from passenger surveys conducted at airports,
    along with national poll results and complaints and compliments
    received by TSA. Passenger survey results display a high level of
    customer satisfaction, as 92 percent of the more than 15,000
    respondents indicated they were satisfied'' or ``very satisfied'' with
    their overall experience. National polls conducted by the Bureau of
    Transportation Statistics bi-monthly support these findings of customer
    satisfaction. Finally, airports show a downward trend in complaints
    relative to compliments.
        Nonetheless, TSA is committed to measuring wait time information at
    Federalized passenger checkpoints. In 2002, initial wait time data was
    collected at all 82 Category X and I airports (covering approximately
    95 percent of annual originating enplanements). Wait times at the
    remaining airports are predicted to be minimal, so we collect data from
    a sampling of Category II, III and IV airports in order to identify
    trends. We have found that most airports do meet the 10-minute standard
    most of the time. TSA will continue to collect wait time data at all
    major and a sampling of smaller airports to establish a good
    understanding of wait times, as well as how our service and staffing
    models impact wait times. We will continue to monitor wait times
    system-wide--by collecting data at all major airports for a 2-week
    period 3 times per year--to ensure that the same patterns hold over
    time.

                          REGISTERED TRAVELER PROGRAM

        Question. Congress provided $5 million for fiscal year 2004 for the
    Registered Traveler program to conduct a pilot program at selected
    domestic airports to expedite the security screening and check-in of
    passengers that voluntarily submit their personal data for a background
    check in order to be enrolled into a passenger registration and
    identity verification system.
        What has been accomplished to date on the Registered Traveler
    program with the funds provided by Congress? What do you intend to
    accomplish in the pilot program by the end of fiscal year 2004, and
    what enhancements do you propose with the requested increase of $10
    million for fiscal year 2005?
        Answer. Over the past year, TSA, in coordination with both internal
    and external stakeholders has developed a strategy for conducting a
    limited number of Registered Traveler (RT) Pilots in 2004 that will
    allow the Department to evaluate the merits of the program without
    disrupting airport operations or compromising security.
        TSA intends to conduct RT Pilots at a limited number of airports
    beginning in June 2004. The Pilot programs will assess improvements in
    security and enhancements in customer service for passengers. The
    pilots will last approximately 90 days. Results of these pilots will be
    analyzed beginning in October 2004 to determine the program's effect on
    security and service.
        Upon conclusion of the pilots, a determination will be made
    regarding best practices and necessary enhancements required for a
    larger implementation of the program. The fiscal year 2005 budget
    request includes $15 million for additional start-up costs, such as IT
    infrastructure and staffing for this program. TSA anticipates that
    future operational program costs for the Registered Traveler Program
    would be covered by fees incurred by participants. Thus, the Registered
    Traveler Program would be self-funded.
        Question. Will biometrics be the cornerstone of the Registered
    Traveler program or will is it be just one component being considered
    as the pilot program takes place?
        Answer. During the RT Pilot, TSA will assess biometric technology
    solutions to enhance identity verification capabilities at the
    passenger security checkpoint. These biometric tools will be tested in
    conjunction with business processes, including potential
    reconfiguration of lines and lanes, to develop a secure and expedited
    travel experience.
        Question. Do you see Registered Traveler as a precursory test for
    CAPPS II?
        Answer. The Registered Traveler Pilot Program is purely voluntary
    and will offer a secure and expedited travel experience for those who
    wish to participate. In addition to submitting personal data, RT
    participants will also be requested to submit biometrics (fingerprint
    and iris scan) that will not be components of the CAPPS II program.
    However, depending on the nature and structure of any deployable RT and
    CAPPS II program, there may be clear functional synergies and
    overlapping capability. TSA will work to ensure that these are
    identified and assessed.
        Question. In what airports will the pilot programs take place and
    how will travelers voluntarily sign up?
        Answer. Final decisions regarding specific locations for the
    Registered Traveler Pilot have not yet been made. TSA envisions that
    voluntary enrollment for the RT Pilot will likely take place at the
    designated airport locations.
       transportation security administration fiscal year 2004 shortfall
        Question. Does TSA have adequate funding for fiscal year 2004 or is
    it facing funding shortfalls in certain programs and activities?
        Answer. The fiscal year Homeland Security Appropriations Act was
    signed into law on October 1, 2003. In addition to these new
    appropriations, TSA has carryover funding from fiscal year 2003 that is
    available to be spent in fiscal year 2004. A spend plan has been
    developed for fiscal year 2004 that allows TSA to meet its requirements
    within available funding.
        Question. What specific funding shortfalls do you anticipate for
    fiscal year 2004?
        Answer. TSA anticipates that it will meet its fiscal year 2004
    requirements within available funding.
        Question. How do you intend to address the funding shortfall
    problems (better management and fiscal controls, a proposed
    reprogramming of TSA funds, or other funds provided to the Department
    from other programs and activities)?
        Answer. TSA has been working to improve its fiscal controls and
    management of the agency as it transforms itself from a start-up agency
    to a maturing organization. In fiscal year 2004, TSA is requesting
    $154.6 million in funding to be shifted among programs to meet emerging
    requirements.
        Question. If a reprogramming of funds will be necessary, when can
    we expect that proposal to be submitted to the Committee?
        Answer. The reprogramming was transmitted to Congress on April 23,
    2004.
        Question. Will an amendment to the fiscal year 2005 budget request,
    as submitted, be required in light of these shortfalls?
        Answer. The Administration does not intend to submit a fiscal year
    2005 budget amendment for TSA.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                             TSA: SECURITY CONTRACT

        Question. We recently received notification of a security contract
    for TSA facilities in Northern Virginia that totals a minimum of $5.3
    million a year for 5 years. That appears to be an extremely large
    amount of money to provide staff and equipment to screen people and
    their belongings as they enter the two facilities.
        Please justify for the record the number of security employees and
    types of equipment that your agency will be obtaining under this
    contract. If the response needs to be classified, please provide the
    subcommittee with an appropriately classified response.
        Answer. The contract security guard force at TSA Headquarters at
    Pentagon City and the Transportation Security Operations Center (TSOC)
    (formerly TSCC) in Chantilly, Virginia is responsible for protection of
    the facilities and for processing the entry of employees and visitors
    to both locations. The decision was made pursuant to guidance received
    from the Department of Homeland Security (DHS) and also to comply with
    the guidelines established by the Department of Justice (DOJ) in 1995,
    entitled ``Vulnerability Assessment of Federal Facilities.'' Security
    surveys and risk/threat assessments for both facilities confirmed the
    level of security required. Both facilities house Sensitive
    Compartmented Information Facilities (SCIF) within their space, as well
    as other sensitive critical assets. Director of Central Intelligence
    Directive (DCID) 6/9, effective 18 November 2002, requires an immediate
    security response to an alarm in this facility. (DCID 6/9; 3.1.2.1)
    Additional factors, including the fact that both facilities are
    operational 24 hours a day, 7 days per week and the ongoing threat
    environment, impacted the decision.
        The TSA Protective Security contract was solicited on a competitive
    basis among eight vendors. This acquisition was awarded utilizing those
    contractors from the General Service Administration's Federal Supply
    Schedule 98 (Law Enforcement--Security Facilities Management). Under
    these guidelines, a 5-year firm-fixed labor hour Blanket Purchase
    Agreement (BPA) was awarded. Each year, funded individual task orders
    will be written and ordered against the BPA. After conducting market
    research on the per hour cost for Security Guards in the DC Metro area,
    it was determined that a single contract with one security guard
    company managed by TSA would be the most cost effective. Among the
    eight vendors bidding for the contract, the one chosen was the less
    expensive of the two most qualified vendors, and the cost was well
    within the Washington area average.
        Under this contract, the security guard company will be providing
    personnel with weapons and uniforms, obtaining clearances for the
    guards, supplying associated security equipment and training for its
    personnel, and providing on-site supervision. Security personnel
    employed by the contractor to protect TSA's facilities are U.S.
    citizens, and many of them are armed or possess Secret Security
    Clearance, or both. The total man-hours worked by the Security Guard
    personnel at both TSA Headquarters and TSCC is approximately 4,000
    hours per week. Besides the screening of visitors and their belongings
    prior to entering TSA facilities, duties include providing escort for
    contractors, security for VIP visits, responding to alarms, patrolling
    the grounds and staffing the control center at both locations for 24
    hours, 7 days a week.

                      EXPLOSIVES DETECTION FOR PASSENGERS

        Question. In December, 2001, Richard Reid was prevented from
    exploding his improvised ``shoe bomb'' due to quick action on the part
    of the passengers and crew of an American Airlines flight from Paris to
    Miami. In the intervening 2 years, we appear to have increased the
    screening of checked baggage for explosives, but there appears to be
    little effort being made to enhance the screening of passengers
    themselves for hidden explosives.
        The technology and equipment exist to non-intrusively screen
    passengers for explosives. What is TSA doing to address this potential
    threat? How much of your fiscal year 2005 budget request is devoted to
    enhanced screening of passengers for explosives? Of the requested
    funds, how much are estimated to be used to procure the latest proven
    explosive detection portals?
        Answer. TSA has developed a roadmap for the operational testing and
    evaluation of checkpoint passenger screening technologies to improve
    TSA's ability to detect explosives being carried on persons and in
    carry-on baggage. Below is a list of the technologies to be pilot
    tested at airports and the timeframe in which that testing will be
    accomplished:
      --Explosives Detection Portals--continue development and pilot
            deployment in the 3rd quarter of fiscal year 2004;
      --Document Scanners--continue development and pilot deployment in the
            2nd or 3rd quarter of fiscal year 2004;
      --Cast & Prosthetic Device Scanners--continue development and pilot
            deployment in the 2nd quarter of fiscal year 2004;
      --Explosives detection systems (EDS) for carry-on baggage--define
            performance metrics and solicit vendor participation 2nd or 3rd
            quarter of fiscal year 2004; and
      --Explosives detection technology for screening liquids--establish
            the performance metrics for this technology and solicit vendors
            of existing technologies to participate in an evaluation
            against this qualification standard.

                        AIRPORT FUNDING FORMULA CHANGES

        Question. President Bush signed the FAA Reauthorization bill into
    law in December, 2003. That law mandates that the Federal government,
    through the TSA, cover 90 percent of the costs associated with airport
    security improvements including the installation of explosive detection
    devices. Less than two months later, however, the President submitted a
    budget to the Congress that would increase the burden on airports for
    meeting Federal security mandates. He proposes to change the amount of
    the Federally-covered expenses from 90 percent to only 75 percent. This
    appears to be yet another example of this Administration passing the
    security buck to someone else. In this case it is the airports and
    local taxpayer-funded airports. In other cases it is seaports or some
    other transportation entity.
        How can the Administration justify agreeing to fund 90 percent of
    airport security costs in December and then provide funding for only 75
    percent of the costs in February?
        Answer. The 75 percent Federal funding level has been a long
    established cost share formula with the aviation industry. Because
    industry shares security responsibilities with the Federal Government,
    and because airports and airlines receive efficiency benefits from in-
    line systems, it is fair that they also share financial
    responsibilities at this level for installation of systems that will
    ease passenger flow and provide increased security levels at airports.
    Additionally at the 75 percent cost share related, TSA can use it
    allocated funding to support current LOI airports as well as those
    airports that have not received LOI but were additional equipment
    capacity is needed to accommodate increased passenger loads.

                          CARGO AND CONTAINER SECURITY

        Question. Two years ago, Congress created and funded Operation Safe
    Commerce. Late last year, the Bureau of Customs and Border Protection
    announced a ``smart container'' initiative. And just 2 weeks ago, the
    Homeland Security Advanced Research Projects Agency issued a
    solicitation for inexpensive container security technologies and
    offered up to $2 million towards that effort. It appears to me that
    there are too many cooks in this particular homeland security kitchen.
    Who is in charge of the security of shipping containers? Which agency
    is setting the standards and which one or ones is responsible for
    implementing them?
        Similarly, in regard to Operation Safe Commerce, what is TSA doing
    to set shipping security standards and how is TSA working with CBP in
    this effort? Once the various OSC shipping tests are completed and the
    reports submitted, who will be in charge of implementing the ``lessons
    learned'' and ensuring that they are implemented? Do you envision the
    establishment of national standards in this regard?
        Answer. Secretary Ridge delegated authority and responsibility for
    implementing the Maritime Transportation Security Act's Secure Systems
    of Transportation (SST) and performance standard sections to BTS.
        In order to ensure that international and domestic approaches to
    cargo security are coordinated and policies are consistent, under BTS
    leadership, a working group consisting of TSA, CBP, USCG and S&T
    personnel has been meeting regularly, and is conducting a gap analysis
    on existing cargo security and intelligence programs, coordinate
    existing containerized cargo security programs and R&D efforts to
    identify synergies and coordinate existing DHS component activities in
    the containerized cargo security environment.
        The goal of this effort is to ensure effective cargo security from
    point of origin to final destination. We will achieve this goal by
    leveraging existing legacy programs like CSI and CTPAT, adding
    enhancements, and setting minimum performance standards to close
    identified vulnerabilities. We will also apply lessons learned from
    Operation Safe Commerce and the SST interagency working group with CBP
    and USCG.

                    AIRLINE PASSENGER SCREENING: WAIT TIMES

        Question. Last summer, my staff asked TSA personnel for information
    regarding wait times experienced by airline passengers at various
    airports. We are concerned that the cap on passenger screeners might be
    resulting in an increase in the time spent by passengers waiting in
    lines to be screened. My staff has renewed that request at regular
    intervals, and yet no information has been provided to them.
        Last week, my staff went to Seattle on subcommittee business and
    had meetings with TSA personnel at the Seattle-Tacoma Airport. They
    were informed that records are kept every half hour of wait times at
    the various checkpoints at SeaTac and that average wait time
    information is submitted to TSA headquarters. Why have your
    representatives been unable to provide my staff with the requested
    information? When can we expect to receive this information?
        Answer. Each month, TSA instructs approximately 26 U.S. airports to
    conduct a wait time study covering two consecutive weeks. These
    airports are selected according to geographical and size categories in
    order to allow TSA to extrapolate across the full range of airport
    diversity. All Category X and I airports--as well as select Category
    II, III and IV airports--will be chosen to collect data at least three
    times each over the course of the year. The monthly airport selections
    are balanced in order to provide consistent data for headquarters
    analysis.
        In March, the average wait time for the sample of 26 airports was
    3.1 minutes, with an average of 10.4 minutes at peak time. At Seattle,
    average wait time was 4.2 minutes and the average at peak time was 16.5
    minutes.

                                 RAIL SECURITY

        Question. Current events such as the subway and rail bombings in
    Moscow and Madrid prove the point that we need an agency solely focused
    on protecting all modes of transportation. Congress created the
    Transportation Security Administration for just that purpose. In light
    of the Madrid bombings, has TSA developed a broader-based plan that
    would address the known threat to mass transit and rail security? Did
    TSA request additional fiscal year 2004 funds from the Department to
    assist in implementing this plan?
        Answer. In the months preceding the Madrid and Moscow incidents,
    DHS, in close coordination with our partners at the Department of
    Transportation (DOT), State and local governments, and transit and rail
    operators, took a number of steps to address vulnerabilities in the
    rail and transit systems to improve our security posture against such
    attacks. These efforts spanned the spectrum of security, from
    information sharing and awareness through prevention, response and
    recovery to a potential terrorist rail attack in the United States.
        On March 22, 2004, Secretary Ridge announced additional measures to
    strengthen security for our rail and transit systems. Most of these
    measures were low or no-cost items and procedures funded out of
    existing agency resources. DHS will build on many of the security
    measures recommended during the past 2 years for implementation to mass
    transit and passenger rail authorities by DHS, the Federal Transit
    Administration and the Federal Railroad Administration.
        Based on assessments from law enforcement and intelligence
    agencies, specific threat assessments and analysis, and the use of risk
    management principles, TSA continually evaluates, prioritizes and
    targets the use of available funds to reduce or eliminate the security
    threat.
        Question. What is TSA doing to more systemically address these
    threats rather than just reacting to them? Is TSA coordinating efforts
    in this regard with other agencies in the Department of Homeland
    Security?
        Answer. Ensuring that our nation's transportation systems are
    secure must be accomplished through effective partnering between
    appropriate Federal, State, local and private industry entities. We
    have consistently held that that this responsibility must involve the
    coordination of appropriate Federal, State, local and private industry
    partners, many of whom were already in the business of providing
    security for their particular piece of the transportation puzzle. TSA's
    main charge, both under ATSA and now as part of the DHS family, is to
    help coordinate these efforts under the guidance of the Secretary and
    the Under Secretary for Border and Transportation Security, identifying
    gaps and working with appropriate partners to ensure that existing
    security gaps are filled. However, other entities within both the
    Department and other agencies in the Federal Government have devoted
    considerable resources to securing modes of transportation other than
    aviation, including the Coast Guard and U.S. Customs and Border
    Protection for port, maritime and cargo security, the Information
    Analysis and Infrastructure Protection Directorate for critical
    infrastructures; the Office of Domestic Preparedness in transit
    security grants; DOT modal administrations; and State, local and
    private sector partners.
        TSA's efforts in non-aviation security over the past 2 years have
    focused on greater information sharing between industry and all levels
    of government, assessing vulnerabilities in non-aviation sectors to
    develop new security measures and plans, increasing training and public
    awareness campaigns, and providing greater assistance and funding for
    non-aviation security activities. In partnership with other component
    agencies of the Department of Homeland Security (DHS) and in
    coordination with the Department of Transportation (DOT), State, local
    and private sector partners, TSA will continue to leverage existing
    security initiatives, coordinate the development of national
    performance-based security standards and guidance; identify areas where
    regulations may be necessary to improve the security of passengers,
    cargo, conveyances, transportation facilities and infrastructures; and
    identify areas where better compliance with established regulations and
    policies can be achieved. TSA will work with DHS components, modal
    administrators within DOT, and its government and industry stakeholders
    to continue these efforts, establish best practices, develop security
    plans, assess security vulnerabilities, and identify needed security
    enhancements.

                                  CANINE TEAMS

        Question. You mention in your testimony that you request $17
    million in fiscal year 2005 to support 354 canine teams. Your prepared
    statement on this funding seems solely focused on aviation security as
    it relates to K-9 teams. Yesterday, as part of his rail and transit
    security initiative, Secretary Ridge said that the Department will
    develop a rapid deployment Mass Transit K-9 program by using existing
    Homeland Security explosive K-9 resources.
        Once again, it appears that the Department is robbing Peter to pay
    Paul. It appears that you will be pulling K-9 teams away from airports
    and the protection of Federal buildings and using them for mass
    transit, thus degrading security in one transportation mode to begin
    beefing up security in another mode. By refusing to seek additional
    funds to address this very real threat it truly calls into question the
    seriousness of this Administration in its effort to secure the
    homeland.
        Does the initiative announced yesterday mean that you will be
    pulling existing K-9 teams away from protecting airports and Federal
    buildings to use them for rail and mass transit security? Did TSA
    request funds for the creation of new teams this fiscal year to address
    the threat to mass transit? Do you anticipate receiving any new
    resources this year for the creation of canine teams dedicated,
    trained, and certified for the rail environment? If the Department
    plans on waiting until the fiscal year 2005 Homeland Security
    appropriations bill is signed into law, I would caution that
    intelligence indicates the threat is imminent and the Department's
    track record on obligating grant funding is spotty at best.
        Answer. DHS will establish Rapid Response Teams (i.e., K-9 units)
    for rail and mass transit security through the Federal Protective
    Service (FPS). FPS will utilize dog team reasources from across the
    government. TSA will not be pulling canine units out of the airports
    unless, potentially, this is part of an action to respond to specific
    incidents or intelligence which warrants use of a Rapid Response Team.
    TSA will use its existing resources to provide dog team training
    assistance to transit operators

                             THE THREAT FROM HAMAS

        Question. On March 22, the so-called spiritual leader of Hamas,
    Sheik Ahmed Yassin, was assassinated in an attack authorized by Israeli
    Prime Minister Sharon. It was an attack about which the U.S. government
    apparently had no advance knowledge. However, as a result of the
    attack, Hamas has stated that it blames the United States and there are
    some reports that it plans to bring its reign of terror to U.S. shores.
        Not only was Sheik Yassin a spiritual leader, he was also known as
    the ``father of the suicide bomber''. I am deeply troubled that the
    ``eye for an eye'' tactics of daily life in the Middle East may soon
    arrive here at home. We have already witnessed backpacks exploding and
    killing over 200 in Madrid. Based on the Secretary's statement of March
    22 and the threat advisories we have seen, I fear that it will not be
    long before suicide bombers begin detonating themselves in our public
    places, our sidewalk cafes, our buses, or our subways.
        What is the Department doing to prevent these types of suicide
    attacks in this country? Are there plans prepared to address this
    looming threat? Or does the Department just plan to wait for the
    inevitable attack and then respond?
        Answer. Suicide bombers usually look for crowded public locations
    (shops, restaurants, clubs, etc.) to detonate themselves for the sole
    purpose of killing and injuring as many people as possible. Public
    transportation targets in other parts of the world have been subjected
    to suicide bomber attacks, especially busses. Stopping suicide bombers
    intent on detonating themselves on or near a bus, ferry or other mass
    transit venue or terminal requires at minimum a multi-pronged approach
    that includes: (1) good intelligence and law enforcement response; (2)
    training operators to recognize the behavior patterns and mannerisms of
    suicide bombers; (3) and educating passengers to do the same. We also
    should explore physical inspection alternatives, as we are doing on a
    test basis in New Carrollton, Maryland. It is not clear, however, if
    this alternative is viable or effective.

                                      TWIC

        Question. The MTSA requires the creation of a national
    Transportation Worker Identification Credential (TWIC). Truck drivers,
    airport employees and all other individuals requiring access to secure
    transportation areas in the performance of their duties will be
    required to carry this credential. Please provide the Administration's
    views on the wisdom of using a centralized and existing card production
    facility for the production of the TWIC cards, including an evaluation
    of the associated costs and benefits. What is the status of the
    prototype project?
        Answer. During the development process, data, technical information
    and lessons learned were gathered from a wide range of sources
    including industry stakeholders and other Federal credentialing
    projects. The RFP for the TWIC Prototype Phase will be released in the
    immediate future. The proposed plan leverages the stakeholder
    relationships established over the past 24 months and during the
    Technology Evaluation Phase, as well as a partnership with the State of
    Florida for the network of deep-water ports. The goal of the prototype
    is to evaluate the full range of TWIC business processes within a
    representative operational environment. The plan includes facilities
    and workers from all transportation modes and is focused in three
    regions, Philadelphia-Wilmington, Los Angeles-Long Beach, and the
    Florida ports.
        Various card production options were evaluated within the context
    of system requirements. Centralized card production using existing
    Federal card production facilities that meet all of the system
    requirements was determined to be the most cost effective solution for
    the prototype phase. Key factors in the evaluation included: physical
    security and controlled access to the production process; secure supply
    chains for card stock and special security features (e.g. holograms,
    special inks, secret keys); standardization of training; and, economies
    of scale with high capacity production machines. Centralized card
    production will be further evaluated during the prototype, and the
    final evaluation report will include a detailed analysis on all card
    production options and a recommendation for DHS decision.

                              REGISTERED TRAVELER

        Question. Last week TSA announced its plan to begin a registered
    traveler program in which frequent airline travelers would pay a fee
    and be provided expedited processing at airport security checkpoints.
    Your budget request includes $15 million to ``expand contract support
    and technology resources''. Please describe the planned registration
    fee and the estimates of the total cost of the program. How much would
    the fee need to be increased to cover the proposed $15 million proposed
    expansion. How can the full cost of the program be recovered from
    business travelers and others who voluntarily join the program as
    opposed to passing on some of the costs associated with the program to
    all taxpayers?
        Answer. TSA intends to conduct RT pilots projects at a limited
    number of U.S. airports beginning in June 2004. The pilot programs will
    assess improvements in security and enhancements in customer service
    for participating passengers. The pilots will last approximately 90
    days. Results of these pilots will be analyzed beginning in October
    2004 to determine the program's effect on security and service.
        During the RT pilot, TSA will test technology in the form of
    biometric tools to enhance identity verification at the passenger
    screening checkpoint, in conjunction with business processes, including
    potential reconfiguration of select checkpoint lines and lanes. TSA
    will be testing a range of technology and operational variables. The RT
    pilots will monitor and assess possibilities for a secure and expedited
    travel experience for those who volunteer to participate in the
    program. The number of participants in the RT pilots will be capped at
    10,000 spread across a small number of airport locations. It is
    anticipated that this small RT pilot test will not have a detrimental
    effect on either those who do not volunteer or on the screener
    workforce. Upon conclusion of the pilots, determinations will be made
    regarding best practices and necessary enhancements required for a
    larger implementation of the program.
        The cost of the RT pilot programs will be funded by $5 million
    earmarked for the Registered Traveler program in the Homeland Security
    Appropriations Act, 2004 (Public Law 108-90). Contrary to what was
    reported in the media, TSA is not planning to charge a fee to
    passengers who participate in the 90-day RT pilots.
        TSA will await the results of the pilot program prior to making any
    decisions regarding the implementation of a Registered Traveler program
    in fiscal year 2005, including what costs would be incurred by those
    passengers who wish to participate in the voluntary program. TSA
    anticipates that future operational program costs for the Registered
    Traveler Program would be covered by fees incurred by participants.
    Thus, the Registered Traveler Program would become self-funded.

                                 HOLLYWOOD JOB

        Question. I understand that TSA is looking to hire an individual to
    serve as a liaison to the Hollywood film and television industry and
    that the person would be paid at the GS-15 level. How many TSA
    screeners could be hired with the $136,000 that the GS-15 Hollywood
    liaison will be paid?
        Answer. Public Affairs utilized an open, funded position from one
    of its bureau offices to create the Director of Entertainment Liaison
    position to represent the entire Department. By taking an FTE from an
    office where reorganization had created efficiencies in workload, the
    position utilized those efficiencies to create a position with value
    added to the Department.
        The Entertainment Liaison Office is a necessary addition to the
    Office of Public Affairs. This person will work with television and
    movie producers to ensure that they do not take ``editorial license''
    with Homeland Security matters that could provide the public with false
    impressions or inaccurate information. We spend a great deal of effort
    to educate people to help them to be better prepared for any possible
    disaster--natural or manmade. Millions of Americans get information
    through the entertainment industry. This position will help to ensure
    that these people get an accurate portrayal of the department's
    mission, policies, and activities, while proactively working to help
    the American public better identify DHS functions. The Entertainment
    Liaison office will guide the direction of documentaries and law
    enforcement ``reality'' shows to provide real information about how the
    country is better prepared today.
        This is not a unique position in government. Many other Federal
    agencies already utilize a liaison with the entertainment industry. The
    CIA has a Hollywood liaison, and the Department of Defense houses a
    large staff to serve the same function.
        This position hired at a salary level of $136,000 (GS-15) would be
    comparable to hiring approximately 3 TSA screeners (see breakout
    below.)

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Base salary.............................................         $23,600
    Locality pay (assumed Los Angeles area).................          +4,732
    Benefits................................................          +8,260
    Dual position training..................................          +3,130
                                                             ---------------
          Total.............................................         39,722
    ------------------------------------------------------------------------
    $136,000/39,722=3.4 screeners.

                       MARITIME AND LAND: A LACK OF FOCUS

        Question. I remain strongly concerned that moving the funds from
    TSA will result in a diminishment of focus from your agency--and the
    Department--on non-aviation modes of transportation. That would be in
    direct contravention of the intent of Congress when it passed the
    Aviation and Transportation Security Act in November 2001. That Act
    gives TSA the responsibility for ``security in all modes of
    transportation.''
        During the hearing, you indicated that upon further reflection in
    regard to the movement of TSA's grant funds to ODP, the Department had
    determined that TSA's ``subject matter specialists/expertise'' would
    remain at TSA. Please confirm for the record that this statement is
    accurate. If this is not the case, please explain why and please tell
    the subcommittee when you learned that this would not be the case and
    from whom. Also, please provide the Subcommittee with the number of
    subject matter specialists TSA employs as of March 19, 2004, in the
    areas of mass transit, seaports, rail, trucking, and buses.
        Answer. It is anticipated that the Transportation Security
    Administration (TSA) will continue to provide operational expertise on
    the grant programs through participation in pre-award management
    functions. These include determination of eligibility and evaluation
    criteria, solicitation and application review procedures, selection
    recommendations and post award technical monitoring.
        As of April 21, 2004, the Transportation Security Administration
    (TSA) surface transportation (i.e., maritime and land) had 120,
    including 23 for rail and mass transit, and 14 for the maritime
    environment TSA is reorienting its subject matter expertise as roles
    and missions are better defined between itself and other DHS
    components. As TSA expands its activities on in rail and mass transit
    security, for example, we would expect to have additional subject
    matter experts and few in other areas where such experts exist in other
    DHS components.

                               CAPPS II--TESTING

        Question. Also, of the funds requested for this program in the
    fiscal year 2005 budget request, what is requested solely for
    additional testing of the program--as opposed to implementation and
    operation of the system?
        Answer. There are two components to the plan for CAPPS II testing:
    testing with historical PNR data and full system testing that will take
    place once connectivity is established with an airline to test with
    live data. TSA estimates the cost associated with completing system and
    performance testing at $5 million. This involves testing the system
    ``end to end'' to validate the ability of the system to receive all of
    the different types of records from the airlines and post the results
    of the risk assessment on the boarding pass. Once system testing has
    been completed, performance testing is required to verify that the time
    required to complete each end-to-end transaction meets the system
    performance standards.

                               AIR CARGO SECURITY

        Question. On December 24th, 2003 six flights between Paris and Los
    Angeles were cancelled due to security concerns. In the week following
    the cancellation, U.S. officials ``significantly increased'' inspection
    of air cargo on foreign flights--a source of widespread concern as a
    potential mode of attack for terrorist.
        The vast majority of cargo carried on passenger aircraft still is
    not screened for potentially deadly threats. Their checked bags and
    carry-on luggage are screened--even their persons are submitted to
    oftentimes humiliating searches, but other forms of cargo carried in
    the belly of the plane are not. In fact, according to a September 2003
    report issued by the Congressional Research Service less than 5 percent
    of cargo placed on passenger airplanes is screened.
        The Aviation and Transportation Security Act requires that the
    agency ``provide for the screening of all passengers and property,
    including United States mail, cargo, carry-on and checked baggage, and
    other articles that will be carried aboard a passenger aircraft,'' yet
    TSA is primarily relying on an administrative process called the
    ``known shipper program'' to meet this requirement instead of
    physically screening the cargo.
        Sadly--even after this Committee and this Congress added funds in
    last year's budget to enhance research and test methods of inspection
    for air cargo--your budget fails to provide increased funds to address
    this very real threat. Mr. Secretary, why have no funds above the $85
    million Congress provided in fiscal year 2004 been requested for fiscal
    year 2005? Does the Bush Administration believe that the threat to air
    cargo is not real?
        Answer. DHS is committed to a strong air cargo screening program
    and its request bears this out. The Administration's fiscal year 2005
    budget request represents a significant increase over the fiscal year
    2004 request, and is consistent with the additional funds appropriated
    last year by Congress in excess of the fiscal year 2004 request, which
    are being used to accelerate TSA's air cargo security program. TSA has
    already taken a number of significant steps to reduce vulnerabilities
    in this arena, including prohibiting cargo from unknown shippers,
    significantly increasing the number of physical inspections of air
    cargo on passenger and all cargo aircraft, increasing its air cargo
    inspections workforce, strengthening the criteria for consideration as
    a known shipper, automating the validation of known shippers and
    indirect air carriers, and expediting research and development efforts
    to identify potential new technological solutions for the inspection of
    air cargo on passenger aircraft. TSA is also working closely with CBP
    to develop a targeting tool which will permit effective identification
    of high risk cargo with the ultimate goal of requiring the inspection
    of all such high risk cargo.
        TSA is committed to a threat-based, risk-managed approach to air
    cargo security. The Air Cargo Strategic Plan outlines a layered
    security strategy that does not rely on any single solution, but
    rather, includes measures that secure critical elements of the entire
    air cargo supply chain, with the ultimate goal of assessing the
    relative risk of air cargo and then focus existing resources on
    inspecting 100 percent of cargo that is determined to be of higher
    risk. Among the layers within the cargo security system are the Known
    Shipper program, Indirect Air Carrier certification system, procedures
    to secure cargo during transport to the airport, training of air
    carrier and Indirect Air Carrier personnel, and screening directives
    established in November 2003. TSA has expanded the Known Shipper
    database by involving more companies and collecting more information. A
    key change to the Known Shipper program will be the full deployment of
    TSA's pilot Known Shipper Automated Database. TSA has already begun to
    implement this automated database and expects full deployment by the
    end of the calendar year. TSA is committed to advancing evolving ideas
    and concepts that can be analyzed and implemented to make the cargo
    security system even more secure. TSA is also aggressively pursuing
    next generation technological solutions that will allow us to enhance
    security for the entire air cargo supply chain.
        Question. The fiscal year 2004 Homeland Security Appropriations Act
    called for the hiring of 100 new inspectors to begin a more rigorous
    focus on air cargo security. We are now halfway into the fiscal year,
    but I understand that TSA has only offered positions to five people.
    Why has TSA made so little progress on this important program over the
    last 5 months? Is hiring air cargo security inspectors not a high
    priority for TSA?
        Answer. The funding provided in the Department of Homeland Security
    Appropriations Act, 2004 (Public Law 108-90) enabled TSA to hire 100
    new cargo inspectors. All 100 cargo inspector positions have been
    selected, and paperwork is being processed by TSA Human Resources. We
    anticipate extending job offers to these applicants and bringing them
    on board within the next 2 months.

                    TSA: SLOW MOVEMENT OF APPROPRIATED FUNDS

        Question. The fiscal year 2004 Homeland Security Act was signed
    into law on October 1, 2003. Yet in the intervening six months, TSA has
    yet to obligate the $22 million Congress appropriated for trucking
    industry grants, the $17 million we provided for Operation Safe
    Commerce, the $10 million we provided for bus security grants, the $7
    million we provided for hazardous material grants, nor the $4 million
    we provided for nuclear detection and monitoring. Additionally, $50
    million still remains unobligated from the funds Congress provided for
    port security grants.
        Please respond for the record on when we can expect these funds to
    be obligated. The threat to these transportation modes is real and the
    delay in getting these funds out to the intended recipients does not
    lay with the Congress.
        Answer. In the coming months, TSA plans to request proposals for
    funding or announce awards for a number of programs. These include:
      --TSA anticipates issuing a Request for Applications (RFA) for both
            the fourth round of Port Security Grants Program ($50 million
            remaining from fiscal year 2004) and Intercity Bus Security
            grants by late spring, 2004, with final awarding of grants
            expected in late summer.
      --A fourth quarter fiscal year 2004 release of the RFA is anticipated
            for both the Highway Watch Program and Operation Safe Commerce,
            with final award anticipated in the fall.
      --TSA intends to announce Request for Proposals for the Truck
            Tracking Project in early summer. Final award is anticipated in
            early fall, 2004.
      --Award for Nuclear Detection and Monitoring is anticipated by mid-
            summer, 2004.

                         TSA FUNDING: ADEQUACY OF FEES

        Question. Your budget request for fiscal year 2005 assumes that you
    will receive $750 million in air carrier fees. The Congressional Budget
    Office estimates that only a total of $350 million of these fees is
    expected to be collected during the fiscal year. If that is correct,
    your budget request is already short by nearly $400 million. I
    understand that you have the authority administratively to require the
    collection of the total amount of $750 million of these fees. Do you
    intend to use that authority?
        If you do not intend to exercise your authority, this Committee
    certainly does not have the resources to fill that kind of a gap in
    funding. Will you be submitting a budget amendment to seek the
    additional $400 million? If you do intend to exercise this authority,
    please provide this Subcommittee with your schedule for announcing this
    change.
        Answer. The air carrier fee was established by Congress as a means
    to allow the Federal Government to offset some of the costs it assumed
    from the airlines when the responsibility for passenger and property
    screening shifted from those airlines to the Transportation Security
    Administration. The Aviation and Transportation Security Act set the
    maximum level of this fee at the cost that the airlines incurred for
    providing security screening in 2000.
        To assist TSA with determining what the airlines had spent on
    security screening prior to TSA assuming those functions, the agency
    required airlines to complete an extensive cost questionnaire on the
    costs the carriers incurred in 2000. Industry memorandums and
    Congressional testimony both pre and post 9/11 indicated that the
    airlines spent as much as $1 billion on security screening. Based on
    that information, TSA conservatively estimated that the industry's
    costs would be $750 million. However, the total reported by the airline
    industry through the cost questionnaires was around $350 million.
    Independent audits also could not validate the completeness of the
    industry's reported costs. As the air carrier fees are currently being
    paid based on the airline cost submissions, there is an approximately
    $400 million difference between fees being paid and costs originally
    reported by the industry.
        TSA is continuing to review the results of the audits and is
    working with the airlines to validate their cost data. Should the data
    be substantiated, TSA will consider the use of its administrative
    authority to allocate and obtain these fees. Other alternatives under
    consideration are the resubmission of the legislation proposed by the
    Administration early in the current Congress, as well as technical
    adjustments to TSA appropriations language that would mandate fee
    collections.

             INSUFFICIENT USE OF SCREENING EQUIPMENT--GAO TESTIMONY

        Question. On February 12, GAO's Director for Homeland Security and
    Justice, Cathleen Berrick, testified before the House Subcommittee on
    Aviation. In her testimony, she observed that while the TSA has made
    progress in its checked baggage processes, ``it continues to face
    challenges in attaining 100 percent screening using explosive detection
    systems 100 percent of the time.'' She notes that, ``Of the airports
    reporting that they were not screening 100 percent of checked baggage
    the number of consecutive days that they were not conducting this
    screening ranged between 1 to 371 days.''
        Rear Admiral Stone, what steps are you taking to remedy the
    deficiencies noted by the General Accounting Office? Is it the result
    of a lack of screeners, a lack of equipment, or a lack of sufficient
    funds to place the right number of screeners with the right equipment
    in the right locations?
        Answer. TSA is aggressively working to resolve both the equipment
    and staffing issues to ensure that we are able to conduct screening of
    100 percent of passengers' checked baggage for explosives at all U.S.
    airports. To that end, we are deploying additional equipment at five
    major airports and adding more than 1,400 baggage screeners to those
    airports where some baggage is screened through alternative methods
    allowed by law.
        During the next several months, TSA will also complete the
    development and deployment of a state-of-the-art modeling process that
    will define the staffing requirements, including those associated with
    baggage screening equipment, for each airport, as well as for the
    Agency as a whole.

                            TSA: INJURY AND ILLNESS

        Question. According to a Department of Labor study, workers at the
    Transportation Security Administration (TSA) suffered from more
    injuries and illnesses than employees at any other agency in the
    Federal Government last year. The TSA suffered more than 5 times as
    many job related injury and illness events as did their counterparts at
    other agencies. Nearly 20 percent of the 65,250 TSA employees at the
    time were hurt or sickened in the workplace last year, compared with
    only 3.7 percent of workers in the rest of the Federal Government. TSA
    employees were only 3.3 percent of the Federal workforce at the end of
    fiscal 2003. But their injuries and illnesses, 12,632 during that
    period, comprise more than 15 percent of all such incidents among
    government workers, according to the report.
        What are you doing to modify your screener training program to
    ensure that employees are protected from injuries in the work place?
    What thought, if any, has been given to using different equipment that
    might assist workers in screening baggage without the chance of serious
    injury?
        Answer. The Department of Labor reported that TSA had the highest
    injury and illness rate among Federal agencies in fiscal year 2003,
    measured by the number of employees injured filing claims with the
    Office of Worker's Compensation.
        About 70 percent of TSA's claims were related to baggage handling,
    which is very different than the work undertaken by most Federal
    agencies. TSA has compared its injury and illness rate with the rates
    found in private sector companies performing closely related
    activities, such as baggage and parcel handling, and found that the
    rates for that type of work were similar to TSA's experience.
        The high injury rate is partially attributable to the necessarily
    short time frame in which TSA was required to become operational. TSA's
    new baggage screening equipment had to be placed in airport space that
    was not designed to accommodate the equipment. Some operations must be
    performed in ergonomically unsuitable areas where there is insufficient
    space to perform safely repetitive baggage handling work. Eighty
    percent of claims related to baggage handling involved sprains and
    strains primarily to the back, but also to shoulders, knees and wrists.
        TSA is currently working to develop and promulgate a series of
    safety related training topics as part of the screener recurrent
    training program. A course on safe lifting techniques has already been
    fielded. Training media will include video and Web-based training.
    Specific courses in development include Bloodborne Pathogens Awareness,
    Hazard Communications, Materials Handling and Lock-out/Tag-out, General
    Safety, and Slips, Trips, and Falls. Safety Action Teams are being
    established at every airport and programs are underway to identify and
    train collateral duty safety and health representatives across the
    agency. Finally, TSA has initiated a program to conduct hazard
    assessments at all of its airports in order to identify additional
    areas where accident prevention actions are necessary.
        With the installation at some airports of new integrated baggage
    conveyor, in-line explosives detection systems, that greatly reduce
    manual baggage handling, some injury rates are already beginning to
    fall. In time, TSA anticipates that its efforts to field a
    comprehensive occupational safety and health program, establish a
    safety culture, train supervisors and employees, and make baggage
    handling system changes to minimize lifting, will result in significant
    improvement in TSA's injury rates.

                               LETTERS OF INTENT

        Question. In response to a question during the hearing, you
    indicated that upwards of 30 airports are seeking letters of intent
    (LOIs) with you. You also indicated that the Office of Management and
    Budget had limited the number of LOIs that you are able to enter into
    to eight. If your analysis of the 30 airports proves the validity of
    these requests, how much additional funding would be required to fund
    them?
        Answer. While numerous airports have expressed interest in LOI
    security funding TSA continues to use its LOI criteria, based on
    achieving and maintaining compliance with the 100 percent electronic
    screening requirement at all airports, to determine the allocation of
    resources. TSA is working with airports that will not be able to
    maintain compliance with the 100 percent electronic screening
    requirement because of increased passenger loads, increased and/or
    additional air carrier service, and/or airport terminal modifications
    and expansions. The President's Budget for fiscal year 2005 supports
    previously issued 8 LOIs for 9 airports, and assumes a 75/25 cost share
    formula as set forth in the Consolidated Appropriations Resolution,
    2003. TSA also supports airports that have not received an LOI, but
    where additional funding for equipment is needed to accommodate
    increased passenger loads and new air carrier service. TSA continues to
    evaluate situations where an in-line solution makes sense from the
    standpoint of security, efficiency, and reduced staffing needs.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye

        Question. The budget request includes $400 million for the purchase
    and installation of Explosive Detection System (EDS) machines. Letters
    of Intent (LOI) have been signed with eight airports for the
    reimbursement of construction costs associated with the integration of
    the new EDS machines for in-line baggage screening. It is my
    understanding that the $250 million requested for installation would
    only cover continued payment of the existing LOIs.
        How many airports are on your list for installation, and under the
    current approach how long would it take to install in-line EDS machines
    at the remaining airports on your list? What would it cost over the
    next 4 years to accelerate the program and install in-line EDS machines
    at all the airports on your list?
        Answer. TSA continues to use its LOI criteria, based on achieving
    and maintaining compliance with the 100 percent electronic screening
    requirement at all airports, to determine where resources will be
    allocated. TSA is working with airports that will not be able to
    maintain compliance with the 100 percent electronic screening
    requirement because of increased passenger loads, increased and/or
    additional air carrier service, and/or airport terminal modifications
    and expansions. The President's Budget for fiscal year 2005 supports
    previously issued LOIs for 9 airports, and assumes a 75/25 cost share
    formula as set forth in the Consolidated Appropriations Resolution,
    2003. TSA also continues to evaluate situations where an in-line
    solution makes sense from the standpoint of security, efficiency, and
    reduced staffing needs.
        Question. TSA currently operates under a statutory limit of 45,000
    full-time equivalent baggage and personnel screening employees. How has
    this limitation affected your ability to serve the flying public and
    ensure short wait times? TSA is required by this limitation to hire
    significant numbers of part-time employees. Has it been difficult to
    hire and retain part-time employees for these screening positions?
        Answer. TSA is managing to keep the workforce under the 45,000 FTE
    level by creating a more flexible workforce. TSA is better coordinating
    airline schedules and passenger load with staffing needs, is increasing
    the proportion of part-time to full-time screeners, and is
    strategically using its mobile national screener force to meet seasonal
    fluctuations in workload. TSA now has in excess of 15 percent of its
    screener workforce as part-time screeners, and TSA expects to have a
    part-time screener workforce of close to 20 percent by the end of the
    current fiscal year. Part-time screeners create additional operational
    flexibility when scheduling screeners to satisfy varying levels of
    demand. As a result of reducing excess capacity at periods of lower
    demand, TSA is seeking to make more FTEs available to the system as a
    whole during peak periods.
        While TSA is highly conscious of customer service concerns, the
    security of the nation's transportation system will always be our top
    priority. Staffing standards, accordingly, should be determined based
    on the goal of achieving the appropriate balance between world class
    security and world class customer service in operating environments
    unique at each airport. Throughout the workforce transformation
    process, our screeners have continued to meet world class standards for
    effectiveness and customer service. They have kept wait time consistent
    with previous performance across the system, while providing a level of
    courtesy that received an 86-percent approval rating according to the
    most recent survey. TSA is proud of the professionalism and dedication
    that its screeners demonstrate every day in the performance of their
    duties.
        Question. Section 1012 of the USA PATRIOT Act requires a background
    investigation of holders of Commercial Driver's Licenses (CDL) who seek
    to carry hazardous materials (hazmat). States must provide biographical
    and criminal history information and fingerprints to TSA on CDL holders
    seeking a state hazmat endorsement. The deadline for states to comply
    has been moved from November 3, 2003 to April 1, 2004, and again to
    December 1. However, to date, the TSA has not provided the states with
    sufficient guidance, including technical standards for the collection
    of fingerprints, to implement fingerprint-based background checks. In
    addition, no funding has been made available to the states to implement
    this program.
        What steps has TSA taken to implement the requirements of Section
    1012 and what is TSA's timeline to provide guidance to the states on
    the process and standards for fingerprint collection and transmittal of
    fingerprints to TSA by the states and notification of qualification by
    TSA back to the states?
        Answer. TSA has been working with the FBI to establish the
    technical standards and processes for the collection and transmission
    of driver fingerprints. Once these processes are finalized, they will
    be transmitted to the States. We estimate that these standards and
    processes will be provided to the States over the course of the next
    month.
        On April 1, 2004, Secretary Ridge sent a letter to each Governor
    outlining the current status of the Hazmat Truck Driver Program. In
    that letter, Secretary Ridge asked each Governor to provide TSA a State
    Point of Contact (POC) for this Program to facilitate communications
    between TSA and other organizations involved in this process. All
    fingerprint standards and processes will be provided to the States
    through their respective POCs.
        TSA has also been working with the American Association of Motor
    Vehicle Administrators (AAMVA) to develop a system for the transmission
    of biographical data to TSA for use in the security threat assessment
    process, and the subsequent results notification to the appropriate
    State and Federal authorities. Initial information related to this
    initiative has already been provided to the States. Additional
    information related to this aspect of the program will be provided to
    the States through their POC.
        Question. Is funding included in your budget request, or the
    request of any other agency to help states defray the cost of complying
    with Section 1012?
        Answer. TSA has identified limited funding in fiscal year 2004 to
    support some of the necessary infrastructure to support the Hazmat
    Truck Driver Program. However, an effective partnership between the
    Federal Government, the States and industry is both necessary and is
    currently being forged to develop and fund start-up solutions on a
    State-by-State basis. Longer term, the Hazmat Truck Driver Program will
    be fee based and TSA envisions that fees will support the program in
    its entirety. We anticipate working with the States and industry to
    develop the details of a fee rule, which will be published later in CY
    2004.
        Question. When will TSA be ready to accept and process State
    submitted fingerprints of commercial drivers seeking a hazmat
    endorsement?
        Answer. TSA will be ready to accept and process State submitted
    fingerprints no later than January 31, 2005 in accordance with the
    existing final rule. However, we do anticipate a limited number of
    pilot States beginning to submit fingerprints beginning in fiscal year
    2005. Working with these pilot States will allow TSA to apply ``lessons
    learned'' during the pilot to systems and processes associated with the
    submission of fingerprints. We anticipate that this technique will
    facilitate a much smoother start-up for the vast majority of States.
        Question. The budget justification submitted by TSA includes
    detailed information about the numbers and types of items confiscated
    by TSA employees at airport security checkpoints. In the last year, TSA
    has intercepted more than 2.8 million prohibited items and arrested 700
    people. Can you help me put that in context and tell me how many how
    many passenger screenings were performed last year? Also, of the 700
    arrests, how many convictions have there been?
        Answer. TSA performed approximately 500 million passenger
    screenings last year. TSA's records in the period February, 2002-
    February, 2004, show that 2,678 individuals were arrested for
    possessing a prohibited item that was discovered at a passenger
    screening checkpoint. The majority of arrests were made by State or
    local law enforcement agencies; only a small number were performed by
    Federal law enforcement authorities. The Department of Justice, along
    with State and local prosecuting authorities, are in a better position
    to ascertain the exact number of convictions.
                                     ______

               Questions Submitted by Senator Ernest F. Hollings

        Question. The budget for FTE's for full time positions was set at
    220 for the Transportation Security Administration's Maritime and Land
    Division, yet it is my understanding that to date, this Division is
    only operating with 160.
        You have a number of responsibilities, such as conducting criminal
    background checks, that are languishing. What is taking so long in
    hiring the remaining 60 Full Time Employee positions that, I understand
    are budgeted for the Transportation Security Administration's Maritime
    and Land Division but not yet hired?
        Answer. TSA is hiring to the level proposed in the fiscal year 2005
    President's Budget.
        Question. Right now, TSA has absolutely no staffing standards at
    airports. Wait times vary from nothing to hours, depending upon the
    airport. On March 9, 2004 the Washington Post said small airport
    security is no good and that you do not meet the 100 percent screening
    requirements of the law--yet, classified submissions by TSA continue to
    tell us that only a handful of airports have problems.
        You continue to support a cap on screeners, dooming the process to
    fail. When will you put in staffing standards that make senses (e.g., a
    maximum 10 minute wait that Secretary Mineta promised us)?
        Answer. TSA is managing to keep the workforce under the 45,000 FTE
    level by creating a more flexible workforce. TSA is working with air
    carries and airports to improve coordination of airline schedules and
    passenger loads with staffing needs, is increasing the proportion of
    part-time to full-time screeners, and is strategically using its mobile
    national screener force to meet seasonal fluctuations in workload. TSA
    expects to have a part-time screener workforce of close to 20 percent
    by the end of the current fiscal year. Part-time screeners create
    additional operational flexibility when scheduling screeners to satisfy
    varying levels of demand. As a result of reducing excess capacity at
    periods of lower demand, TSA is seeking to make more FTEs available to
    the system as a whole during peak periods.
        Throughout the workforce transformation process, our screeners have
    continued to meet world class standards for effectiveness and customer
    service. They have kept wait time consistent with previous performance
    across the system, while providing a level of courtesy that received an
    86-percent approval rating according to the most recent survey. Despite
    the dynamics in the workload, even during the holiday rush season and
    the recent Orange Threat Level period, our screeners have provided
    world class security and world class service for effectiveness,
    efficiency, and customer satisfaction. TSA is proud of the
    professionalism and dedication that its screeners demonstrate every day
    in the performance of their duties.
        Question. You also committed to putting in explosive detection
    systems--automated systems in line--when will that job be completed?
        Answer. TSA's top priority is security, and consequently, TSA will
    focus its available funds for EDS at those airports that require
    additional funding in order to comply with the requirement to conduct
    screening of all checked baggage using electronic means. Changes to
    passenger throughputs, terminal modifications, and airport expansions
    make fulfilling TSA's goal of 100 percent electronic baggage screening
    a constantly moving target. TSA balances many competing priorities for
    available funds and will continue to review its priorities to maximize
    the utilization of the funds available.
        Question. Airports are seeking long term letters of intent (LOI)
    from you to fund reconstruction for security projects. You gave out
    LOI's to 8 or 10 airports, but there are another 20 or so waiting. How
    much money do you need to get the job done this year? Miami, for
    example, is rebuilding the entire airport--a $4.8 billion project, that
    needs $200 million for security systems, but there is no money in your
    budget to meet that need.
        Answer. TSA continues to use its LOI criteria, based on achieving
    and maintaining compliance with the 100 percent electronic screening
    requirement at all airports, to determine where resources will be
    allocated. TSA is working with airports that will not be able to
    maintain compliance with the 100 percent electronic screening
    requirement because of increased passenger loads, increased and/or
    additional air carrier service, and/or airport terminal modifications
    and expansions. The President's Budget for fiscal year 2005 supports
    previously issued LOIs for 9 airports, and assumes a 75/25 cost share
    formula as set forth in the Consolidated Appropriations Resolution,
    2003. TSA also continues to evaluate situations where an in-line
    solution makes sense from the standpoint of security, efficiency, and
    reduced staffing needs.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

        Question. A recent GAO study concluded that the Computer-Assisted
    Passenger Prescreening System, or CAPPS II, is not ready for prime
    time. According to the report: ``The system as it currently exists
    offers only limited functionality in a simulated environment.'' I am
    concerned that the program's weaknesses may limit its effectiveness and
    it lacks sufficient protections for the civil liberties of ordinary,
    law-abiding travelers. I am also concerned by reports that the
    administration plans to force the airlines to hand over passenger data.
        Since I understand TSA plans to launch CAPPS II later this year and
    has requested a total of $60 million in fiscal year 2005 for further
    development of CAPPS II, I would like to know the following:
        How much has been spent by TSA on CAPPS II development in each
    fiscal year so far?
        Answer. Commitments/obligations on CAPPS II development to date
    (April 26, 2004) are as follows:

                            [In millions of dollars]
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Fiscal year 2002 & 2003.................................            58.4
    Fiscal year 2004 (to date)..............................            28.1
                                                             ---------------
          TOTAL.............................................            86.5
    ------------------------------------------------------------------------

        Question. How exactly does TSA plan to spend the additional $60
    million in the fiscal year 2005 budget request should it be
    appropriated by Congress?
        Answer. TSA intends to spend the $60 million in the following
    manner:

                            [In millions of dollars]
    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Facilities leases, Utilities and Maintenance............             3.3
    IT and Telecommunication................................             5.2
    Infrastructure support (security, FTEs, etc.)...........            10.8
    CAPPS II Development and Operations.....................            40.7
    ------------------------------------------------------------------------

        Question. What is TSA doing to address the shortcomings and
    vulnerabilities of CAPPS II as described in the GAO study and outlined
    in the January 14, 2004, letter Senator Feingold and I sent to
    Secretary Ridge and copied you?
        Answer. As indicated in the GAO report itself, the primary problem
    faced by CAPPS II at the present time is the fact that we have not yet
    been able to begin testing with actual data. The absence of this data
    has hindered our ability to answer each of the answers sufficiently for
    GAO, which uses strict auditing review procedures standards, to certify
    that program development in those areas is complete. We are confident
    that each of the points raised in the GAO report will be answered to
    your satisfaction prior to implementation of the system.
        Question. According to recent reports, the airline industry has
    indicated a willingness to participate in CAPPS II, provided that TSA
    complies with seven privacy principles. Has TSA agreed to these privacy
    principles? If not, please explain.
        Answer. TSA has no disagreement with the seven Passenger Privacy
    Principles recently released by the Air Transport Association (ATA).
    The principles are consistent with the Fair Information Principles that
    TSA used to develop its privacy management program for CAPPS II and the
    building block for the agency's privacy policies and practices.
        Question. Presidential Directive 63 called for the creation of
    private sector Information Sharing and Analysis Centers to protect our
    critical infrastructures from terrorist attack. At the request of the
    U.S. Department of Transportation, the Surface Transportation
    Information Sharing and Analysis Center (ST-ISAC) was formed. The ST-
    ISAC collects, analyzes, and distributes critical security and threat
    information from worldwide resources to protect its members' vital
    information and information technology systems from attack.
        Right now this valuable information is only available to paying
    members of the ST-ISAC. With the TSA seeking an $892 million funding
    increase for fiscal year 2005, why was funding not included in the TSA
    request to make the ST-ISAC information available to all public transit
    operators across the country--especially since most cannot afford new
    equipment and operators much less afford to subscribe to the ST-ISAC?
        Answer. DHS and TSA utilize numerous avenues for distributing and
    receiving information for the various transportation sectors. TSA's
    Transportation Security Operations Center (TSOC) receives information
    from ISACs as well as from multiple other sources. We provide
    information to the ISACs for distribution to their members since they
    have established communication methods with their members.
    Additionally, TSA is committed to establishing effective lines of
    communication to all stakeholders regardless of their membership with
    any particular ISAC. TSA is developing contacts lists for all of the
    non-ISAC stakeholders. As envisioned, all stakeholders would have
    access to general information. Specific persons would have access to
    sensitive information, provided they have signed non-disclosure
    agreements.
        Question. It has been reported that the Federal Government is
    spending $4.5 billion on aviation security this year but only $65
    million on rail security--even though 5 times more people take trains
    everyday than planes. The catastrophic Madrid bombings reflect that
    this reality is fraught with severe risks.
        Senator Hollings introduced a bill last week to allot $515 million
    for risk assessments and security improvements for our Nation's rail
    system. Unfortunately, he has introduced the bill twice before and it
    has gone nowhere.
        Last year a survey of transit agencies by the American Public
    Transportation Association (APTA) identified some $6 billion in unmet
    security needs that remain today.
        What is TSA's position on the $6 billion in unmet security needs
    described by APTA? And what does TSA expect to do to address those
    needs?
        Answer. Ensuring that our nation's transportation systems are
    secure must be accomplished through effective partnering between
    appropriate Federal, State, local and private industry entities. DHS is
    charged with responsibility for working to protect all modes of
    transportation, but it has consistently held that that this
    responsibility must be shared with Federal, State, local and private
    industry partners, many of whom were already in the business of
    providing security for their particular piece of the transportation
    puzzle. TSA's main charge, both under ATSA and now as part of the DHS
    family, is to help coordinate these efforts under the guidance of the
    Secretary and the Under Secretary for Border and Transportation
    Security, identifying gaps and working with appropriate partners to
    ensure that existing security gaps are filled.
        Recognizing this, the Department of Homeland Security (DHS) has
    requested substantial resources in fiscal year 2005 across the agencies
    within the Department involved with securing transportation modes other
    than aviation, including resources in the Coast Guard and CBP for ports
    and maritime security; in Customs and Border Protection (CBP) for cargo
    security; in Information Analysis and Infrastructure Protection (IAIP)
    for vulnerability assessments, intelligence, and infrastructure
    protection for all sectors including transportation; and in Emergency
    Preparedness & Response (EP&R) for emergency response to only name a
    few. In addition to working with other DHS components, TSA works
    closely with our sister Federal agencies outside of DHS to ensure that
    all government resources are maximized. For example, under the
    leadership of BTS and DHS, TSA is coordinating key standards-setting
    efforts in areas such as transit and rail security, and is working
    closely with modal administrations of the Department of Transportation
    to help leverage their existing resources and security efforts to
    accomplish security goals.
        Specifically, funds provided for transit and rail security in
    fiscal year 2003 and fiscal year 2004 total $215 million--$115 for
    transit security grants under the Urban Area Security Program, and $100
    million for upgrades to rail tunnels in the Northeast Corridor.
        Question. As you may know, law enforcement officials from New
    England and New York have been national leaders in establishing an
    initiative for cargo container security called Operation Safe Commerce
    Northeast (OSC Northeast.) OSC Northeast represents a comprehensive
    coalition of Federal agencies, State governments, and private sector
    businesses committed to the concept of enhancing border and
    international transportation security without impeding free trade and
    international commerce.
        The economy will face a grave disruption should a catastrophic
    event occur related to international trade corridors. We are very
    vulnerable along our Northern Border, and the OSC Northeast group would
    enhance the safety of cargo entering the United States through New
    England and Canadian ports. Therefore, I believe the TSA should better
    engage and utilize the resources of OSC Northeast.
        In light of administration's budget proposal to cut in half the $58
    million Operation Safe Commerce program--citing $28 million in unspent
    funds already approved by Congress for the program that may be
    redirected to overspending in other areas of TSA:
        Will TSA use some of these funds to expand the program to OSC
    Northeast since there are no restrictions on aiding just three ports in
    the second round of appropriations?
        Answer. First, it is important to note that TSA's final spend plan
    submission for fiscal year 2003 included all $58 million earmarked for
    Operation Safe Commerce. OSC Northeast was eligible to apply for OSC
    fiscal year 2002-03 funding through any of the three Load Centers,
    including the Port Authority of New York and New Jersey, but did not do
    so. OSC Northeast did apply for a port security grant, but its
    application was not selected. The OSC program is nearing completion. We
    expect to assess results starting this summer.
        Question. What steps are TSA taking to incorporate the efforts of
    OSC Northeast into our national port security strategy?
        Answer. The OSC Executive Steering Committee carefully reviewed the
    OSC Northeast report of November 2002. The review had a significant
    impact in guiding the current OSC efforts, including examination of
    security throughout entire supply chains, use of a systematic approach
    to container security (including multimodal activities), coordination
    with related initiatives, examination of costs and benefits of the
    selected solutions and the need for solutions to work for all modes of
    transportation.
                                     ______

                    Question Submitted by Senator Harry Reid

                   HAZARDOUS MATERIAL TRANSPORTATION FUNDING

        Question. Admiral Stone, the fiscal year 2004 Homeland Security
    appropriations law included $7 million for a hazardous material truck
    tracking program. The University of Nevada, Las Vegas is working with a
    national leader in truck tracking to establish a national center to
    track commercial trucks carrying hazardous material and has submitted a
    proposal to use a portion of this funding. When can we expect to hear
    about the allocation of the $7 million?
        Answer. The Transportation Security Administration (TSA) expects to
    solicit proposals on a competitive basis for the truck tracking
    initiative in the summer of 2004. All interested parties will be
    invited to submit proposals in response to this announcement.

                              SUBCOMMITTEE RECESS

        Senator Cochran. Admiral Collins and Admiral Stone, we
    appreciate very much your cooperation with our subcommittee.
    Our next hearing on the budget request for the Department of
    Homeland Security will be held on Tuesday, March 30, in this
    room, SD-124. At that time, the Commissioner of the Bureau of
    Customs and Border Protection, Robert Bonner; the Assistant
    Secretary of the Bureau of Immigration and Customs Enforcement,
    Michael Garcia; and the Director of the Bureau of Citizenship
    and Immigration Services, Eduardo Aguirre, will be here to
    discuss the budget for the programs and activities under their
    jurisdiction. Until then, the subcommittee stands in recess.
        [Whereupon, at 12 noon, Tuesday, March 23, the subcommittee
    was recessed, to reconvene at 10 a.m., Tuesday, March 30.]

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                            TUESDAY, MARCH 30, 2004

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10 a.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Thad Cochran (chairman) presiding.
        Present: Senators Cochran, Stevens, Shelby, Byrd, Leahy,
    and Murray.

                        DEPARTMENT OF HOMELAND SECURITY

    STATEMENTS OF:
            EDUARDO AGUIRRE, JR., DIRECTOR, U.S. CITIZENSHIP AND
                IMMIGRATION SERVICES
            ROBERT C. BONNER, COMMISSIONER, BUREAU OF CUSTOMS AND BORDER
                PROTECTION
            MICHAEL J. GARCIA, ASSISTANT SECRETARY, BUREAU OF IMMIGRATION
                AND CUSTOMS ENFORCEMENT

                   OPENING STATEMENT OF SENATOR THAD COCHRAN

        Senator Cochran. The hearing will please come to order.
    Today we continue our review of the President's fiscal year
    2005 budget request for the Department of Homeland Security. We
    will specifically consider the request for programs and
    activities of three of the department's agencies: Citizenship
    and Immigration Services, Customs and Border Protection, and
    Immigration and Customs Enforcement.
        I am pleased to welcome the Director of Citizenship and
    Immigration Services, Mr. Eduardo Aguirre; the Commissioner of
    the Bureau of Customs and Border Protection, Mr. Robert Bonner;
    and the Assistant Secretary of the Bureau of Immigration and
    Customs Enforcement, Mr. Michael Garcia. We thank you for
    submitting copies of your statements in advance of the hearing.
    These will be made a part of the record. And we invite you each
    to make any comments you think would be helpful to the
    committee's understanding of the budget request.
        Before asking the witnesses to proceed, however, I am happy
    to yield to Senator Byrd and other Senators who may wish to
    make opening statements.
        Senator Byrd.

                      STATEMENT OF SENATOR ROBERT C. BYRD

        Senator Byrd. Thank you, Mr. Chairman, comrades on the
    committee. You see, I am ahead of everybody else on the Hill.
    Fifty-one years on the Hill entitles me to call my friends here
    ``comrades.''
        Welcome to our distinguished witnesses. The men and women
    under your direction have a great impact on the safety of
    American citizens, as well as visitors to our country.
    Secretary Ridge has promoted the concept of one face at the
    border. And I support that concept. However, I remain concerned
    that there are real vulnerabilities facing us Nation that
    require immediate response.
        Last December, Secretary Ridge said, ``The strategic
    indicators, including al-Qaeda's continued desire to carry out
    attacks against our homeland, are perhaps greater now than at
    any point since September 11.'' On March 11, terrorists armed
    with backpacks filled with explosives coordinated an attack
    that resulted in the deaths of nearly 200 people in Madrid. I
    would expect that the administration would anticipate these
    kinds of threats and address such threats with a robust
    defense.

                        REVIEW OF THE PRESIDENT'S BUDGET

        Yet, as I review the administration's budget, America's
    defense is far too reliant on paper, on studies, and on
    reports, rather than on the layered defense that the President
    and the Secretary often describe in their homeland security
    speeches. Let me just give a few examples.
        Nearly 9 million commercial containers are brought into
    this country each year through our ports. Yet, only 5 percent
    of them are inspected. We have all heard these figures time and
    time again.
        On January 5, 2004, the new visa tracking system, known as
    US VISIT, began operation at 115 airports and 14 seaports.
    Customs and Border Protection inspectors are collecting data on
    visitors entering our country, but the Bush Administration
    still has no clear plan for confirming who is exiting the
    United States. We have no way of knowing whether aliens, who
    are supposed to have left the country, have in fact left the
    country.
        At the same time, we need to ensure that sufficient funds
    are provided to integrate the various existing biometric
    databases. We need to make sure that the US VISIT system and
    the Border Patrol IDENT system are compatible with the FBI's
    Integrated Automated Fingerprint Identification System. At our
    March 9 hearing, Secretary Hutchinson attempted to address this
    issue, but I believe that he fell short in his response.

                          NEED FOR INTEGRATED SYSTEMS

        We need to have integrated systems that can talk to each
    other. We must know whether an alien trying to come into this
    country, or already in this country, has a criminal history. By
    integrating these systems, CBP would know if an alien is a
    security risk and could refuse him entry into the country, or
    remove him from the country, or imprison him. We simply cannot
    be satisfied with the incompatible systems that result in
    murderers and other criminals walking through holes in our
    border security.

                         SHORTCOMINGS IN BUDGET REQUEST

        The Federal Air Marshal Service does not have sufficient
    resources this year to maintain the number of air marshals on
    targeted domestic and international flights. And because the
    Administration has proposed no increase for next year, a bad
    problem could become even worse next year.
        The President has proposed a sweeping amnesty for people
    already residing illegally in this country. Yet, the
    President's budget request includes only modest increases for
    programs that attempt to cope with our growing illegal alien
    population, and provides insufficient funds to robustly enforce
    our existing immigration laws. When I inquired of Secretary
    Ridge just how he would pay to implement the President's
    amnesty program, he could not provide an answer.
        I want to make sure that this subcommittee and this
    Congress provide real homeland security to the American people,
    not just assurances on paper. The President stubbornly has told
    this agency not to seek supplemental appropriations this year.
    Just last week we learned that, more than a year after setting
    up the new department, there still is not a complete accounting
    of the funds which have been made available for the operation
    of your agencies.

                                 HIRING FREEZES

        The department has imposed hiring freezes so that the
    department's accounts, along with its OMB overseers, can audit
    the books. Air marshals are not being hired. Inspectors at our
    ports of entry and criminal investigators are not being hired.
    We are 6 months into the fiscal year. I simply do not
    understand why the Administration has not proposed a solution
    to this problem. Homeland security cannot wait.

                            THE NATION IS VULNERABLE

        I have never claimed to be the Oracle at Delphi, but there
    are many times these days when I feel like Diogenes. I am
    looking for an honest man. I am seeking someone who can tell
    this President that this Nation is vulnerable and that this
    President leaves us vulnerable for another year.
        Time and again, my colleagues and I have tried to provide
    this department with the additional resources we believe it
    needs to surely provide security to the homeland. And time and
    again, this Administration has stiff-armed our efforts,
    labeling amendments for border security, port security, air
    cargo security, and rail security as wasteful spending.

                            ALLEGED BUDGET SHORTFALL

        I hope we can get to the bottom of this alleged budget
    shortfall for the department quickly. It is a problem not of
    Congress's making. I will be discussing many of these issues. I
    appreciate the fine work of our witnesses and the courageous
    men and women who work for you. I look forward to hearing from
    you.
        Thank you, Mr. Chairman.
        Senator Cochran. Senator Leahy.

                     STATEMENT OF SENATOR PATRICK J. LEAHY

        Senator Leahy. Thank you, Mr. Chairman. I could not help
    but think as I listened to both your statement and to Senator
    Byrd's statement, that the witnesses before us this morning all
    bear great responsibility for keeping our Nation secure. All
    three of you do. And we all thank you for your service.

                         HIRING FREEZES FOR ICE AND CBP

        But when we come together here today, I am concerned about
    the hiring freeze that is in place in part or in all of your
    agencies. I understand that the Bureau of Immigration and
    Customs Enforcement, ICE, the Bureau of Customs and Border
    Protection, CBP, are facing a budget shortfall of more than 12
    percent. It is really inexcusable to hear about a hiring freeze
    in critical national security agencies, especially after the
    administration has so stridently opposed efforts by Senator
    Byrd and others, many others, in Congress to make homeland
    security the priority that it needs in the national budget.
        We know full well that the administration budget's
    priorities ultimately is the White House prerogative and not
    yours. My criticism is not directed at you. But this morning
    the American people need to hear an explanation how this could
    have happened and what this freeze will mean to the missions of
    your agencies and what is being done in the meantime to protect
    the security of the American people.
        We ask these questions because, as Senator Byrd has pointed
    out so many times, under the Constitution the question of
    spending starts here in the Congress, not on the other end of
    Pennsylvania Avenue. We hold the purse strings.

             LAW ENFORCEMENT TRAINING CENTER IN WILLISTON, VERMONT

        Now I am glad that ICE is making increased use of the Law
    Enforcement Support Center, LESC, in Williston, Vermont. For
    years the LESC has done an excellent job of providing
    information to State and local police departments throughout
    the Nation regarding the immigration status and identities of
    aliens suspected, arrested, or convicted of criminal activity.
    I had the pleasure of joining Mr. Garcia there last summer.
        I recall at one point during the discussion we were talking
    to somebody about that it is open 24 hours, 7 days a week. What
    happened earlier that winter, one time we had a 3-foot snowfall
    overnight. And this got kind of puzzled looks. Well, everybody
    came to work, of course. I mean, what else would they do? It
    was only 3 feet. It kind of screwed up the parking lot, but
    everybody got to work.
        But I think that when it is done, including this work at
    ICE, Operation Predator, designed to catch sex offenders, I
    think that is extremely important. But I am also concerned that
    LESC may not receive the resources its needs to accomplish its
    additional workload. I hope that will be addressed today.

                  TRIPS AROUND THE COUNTRY TO VARIOUS OFFICES

        Incidentally, I know all of you make trips around the
    country to the various departments. Those are meaningful. I
    mentioned to Mr. Garcia earlier this morning, when I was coming
    out of mass on Sunday, somebody came up to me and said that
    they were there when he came through and was delighted that he
    actually took time and asked them what they do and how they do
    it, what is involved in their job. I am sure there were a whole
    lot of other people he asked. But this particular person
    remembered this. It was almost a year later.

                          CIS BUDGET REQUEST CONCERNS

        Now turning to Mr. Aguirre's agency, I am concerned about
    the President's proposed budget for Citizenship and Immigration
    Services, CIS.. The budget calls for a 40-percent cut in the
    amount of directly appropriated funds for CIS from the nearly
    $235 million appropriated for the current year. They are
    cutting it, Mr. Chairman, to $140 million for fiscal year 2005.
        Now this cut comes at a time where we are way, way, way far
    from fulfilling the President's own promise to reduce the
    average wait time for applicants for immigration benefits to 6
    months by 2006. It was a great speech. It was a great promise.
    I agree with the President entirely. But after making the
    speech, he did not cut the funds to make sure the promise could
    be realized.
        It also comes at a time when the President has proposed a
    worker program that would significantly increase the CIS
    workload. Yet another great speech, a large Hispanic
    population. But I guess it proved unpopular with some in the
    President's party, so we have not heard more about it. But we
    know it is still floating out there.
        In fact, I wrote to the President in January. I asked him
    to submit a legislative proposal to Congress for implementing
    his plan. He announced it with great fanfare. And I was curious
    just how it is going to be done. We only have a few real
    working days left in the Congress this year, and we have yet to
    receive a response.

                     INCREASE CAP FOR THE H2B VISA PROGRAM

        I would like to raise one other policy issue while Mr.
    Aguirre is here. I hope the CIS and the administration as a
    whole will support bipartisan efforts in Congress to increase
    the cap for the H2B visa program. Your department recently
    announced that the statutory cap for this program has already
    been reached, if I am correct. It is causing tourism-dependent
    businesses across the country to fear they will be unable to
    serve their customers this summer.

                               prepared statement

        I am enjoying with at least 13 of my colleagues, including
    Senator Stevens, the chairman of the full committee, to
    introduce S. 2252, the Save Summer Act of 2004. It would
    increase the cap for the current fiscal year by 40,000. I would
    urge the administration to support it.
        Mr. Chairman, I look forward to the testimony. I thank you
    for your usual courtesy and giving me a chance to make a
    comment.
        [The statement follows:]

                 Prepared Statement of Senator Patrick J. Leahy

        The witnesses before us this morning all bear great responsibility
    for keeping our Nation secure, and we thank you for your service. Yet
    as we come together today, there is a hiring freeze in place at all or
    part of each of your agencies.
        I understand that the Bureau of Immigration and Customs Enforcement
    (ICE) and the Bureau of Customs and Border Protection (BCBP) are facing
    a budget shortfall of more than 12 percent. It is outrageous to hear
    about a hiring freeze in critical national security agencies after the
    Bush Administration has so stridently opposed attempts by the Ranking
    Member and many, many others in Congress to make homeland security the
    priority that it needs to be in the national budget. We know full well
    that setting the Administration's budget priorities ultimately is the
    White House's prerogative, and not yours. But this morning the American
    people need to hear an explanation of how this could have happened,
    what this freeze will mean to the missions of your agencies, and what
    is being done in the meantime to protect the security of the American
    people.
        Meanwhile, I am glad that ICE is making increased use of the Law
    Enforcement Support Center (LESC), in Williston, Vermont. For years,
    the LESC has done an excellent job of providing information to state
    and local police departments throughout the nation, regarding the
    immigration status and identities of aliens suspected, arrested, or
    convicted of criminal activity. I had the pleasure of joining Mr.
    Garcia last summer at the LESC to announce an expansion of its role,
    including its work in ICE's Operation Predator, designed to catch sex
    offenders. At the same time, I am concerned that the LESC may not
    receive the resources it needs to accomplish its additional workload. I
    hope that Mr. Garcia will address those concerns today.
        Turning to Mr. Aguirre's agency, I am concerned about the
    President's proposed budget for Citizenship and Immigration Services
    (CIS). The budget calls for a 40 percent cut in the amount of directly
    appropriated funds for CIS, from the nearly $235 million appropriated
    for the current year, to $140 million for fiscal year 2005. This cut
    comes at a time when we are still far from fulfilling the President's
    promise to reduce the average wait time for applicants for immigration
    benefits to 6 months by 2006. It also comes at a time when the
    President has proposed a guest worker program that would significantly
    increase the CIS workload. Of course, the guest worker program may have
    simply fallen off the President's radar screen now that it has proven
    unpopular with some in his party. I wrote to the President in January
    and asked him to submit a legislative proposal to Congress for
    implementing his plan. Despite the ever-shrinking legislative year
    ahead of us, I have still not received a response.
        I would like to raise one other policy issue with Mr. Aguirre while
    he is here. I hope that CIS and the Administration as a whole will
    support bipartisan efforts in Congress to increase the cap for the H-2B
    visa program. Your department recently announced that the statutory cap
    for this program had already been reached, causing tourism-dependent
    businesses across the country to fear they will be unable to serve
    their customers this summer. I have joined with at least 13 of my
    colleagues--including the Chairman of the full committee--to introduce
    S. 2252, the Save Summer Act of 2004. This bill would increase the cap
    for the current fiscal year by 40,000. It is a necessary response to a
    critical and unexpected problem, and I urge the Administration to
    support it.
        I look forward to hearing your testimony.

        Senator Cochran. Thank you, Senator.
        Senator Shelby.

                     STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. Thank you, Mr. Chairman.
        First, Mr. Secretary, let me thank you for the bureau's
    efforts to stop the exploitation of children. I have worked
    with you and your predecessors for many years to ensure that
    the people that would take advantage of and seek to prosper
    from the exploitation of children are prosecuted to the fullest
    extent of the law. I remain committed to working with you to
    eliminate the threat to our children.
        In addition, I know you have been working with our partners
    at the National Center for Missing and Exploited Children. Let
    me encourage you to maintain that partnership. I think it has
    been very valuable and it works. The center is an invaluable
    asset, I think, in our quest to protect our children in
    America.

                               OPERATION PREDATOR

        I understand that Operation Predator is underway. And
    Senator Leahy alluded to that. I am interested in its progress
    and what the funding requirements are to maintain this
    important program in 2005. I am also interested in learning of
    any additional programs that are dedicated to eliminating
    crimes against children, I would appreciate it if you would
    take the time to go over some of these in your testimony or
    questions.

             NUMBER OF ILLEGAL ALIENS RESIDING IN THE UNITED STATES

        Among your many goals here is the charge to secure our
    borders, Mr. Director, and to control illegal immigration. I am
    told that the most current estimates place the number of
    illegal aliens in our country at over 8 million. I believe it
    is much more than that.
        Gentlemen, what is your best estimate on the number of
    illegal aliens currently residing in this country? How many new
    illegal aliens entered the country last year? Is that an
    increase or a decrease from the previous year? I fear that it
    is an increase. If we are so uncertain about the numbers, does
    that not seem to indicate that we are not doing enough to
    secure our borders and our homeland?

                                   OVERSTAYS

        Another major problem with our immigration system is the
    fact that many of these people currently counted as illegals
    actually entered the country legally, but have overstayed their
    visas. Do you have any recent numbers on visa overstays, given
    that this makes up a large part of our illegal population?
        Next, what is your agency doing right now, and what are you
    planning to do in the future, to ensure that this does not
    continue to be a problem? That is, they get a visa, they come
    in, they do not go back, and you do not know where they are.
    There must be a way to keep track of these folks.

           STEMMING THE FLOW OF ILLEGAL ALIENS INTO THE UNITED STATES

        I spent this past week conducting county meetings all over
    the State of Alabama, my State. Without fail, at every meeting
    I was asked what the Federal Government was doing to stem the
    flow of illegal aliens into the United States. Unfortunately,
    my answer to them was, ``obviously not enough.''
        What is the directorate doing to make our borders more
    secure and eliminate the influx of illegal aliens in this
    country? How many aliens have been detained and deported in the
    last year? I am asking these questions, and I hope you will
    touch on all of them.
        If a Mexican citizen looking for work can pay a fee to a
    coyote to traverse our border, what is to keep terrorists that
    will do us harm from doing the same thing? I have been told
    many times, and I believe it, that rewarding bad behavior only
    encourages more bad behavior. We learn that as children.
    Currently, if you break the law entering the United States, you
    get a job. Now that is not what the law provides, but it sure
    seems to be what is happening.
        I have serious concerns about the ramification of proposals
    that sound a lot like the amnesty of 1986. If the current
    proposals are put into effect, the criminal would not only get
    a job, but social security and welfare benefits as well. I have
    been told that the rate of illegal immigration actually
    increased after the 1986 amnesty. Is there any truth to that
    statement? Would you agree that we spend too much time and
    money on the vetting process for those following the paths to
    legal immigration, and not enough trying to catch those people
    who are willing to break the law and pay $50 to be at work in
    the States in a couple of days. What are we going to do, or
    what are you going to do, to rectify the problem?
        I know I have posed a number of questions here in a short
    time. And I hope you will address them.
        Mr. Chairman, thank you.
        Senator Cochran. Thank you, Senator.
        Senator Murray.

                       STATEMENT OF SENATOR PATTY MURRAY

        Senator Murray. Thank you, Mr. Chairman. I want to join all
    of my colleagues in welcoming our witnesses today. You have a
    tremendous task before you. And I want to thank you for your
    service.

                 $1.2 BILLION SHORTFALL CAUSE OF HIRING FREEZE

        I became increasingly concerned about the level of the
    President's budget request when I read that, according to the
    Wall Street Journal, a $1.2 billion shortfall has caused a
    hiring freeze within your agency. So I hope your testimony will
    clear up whether that is actually a computer glitch or an
    accounting error resulting from combing budgets from legal
    agencies or a real budget shortfall that this subcommittee will
    need to deal with.

                      SECURING LAND AND SEAPORTS-OF-ENTRY

        Mr. Chairman, my questions today will focus on the
    administration's plan for securing our ports of entry, both on
    land and our seaports. As we all know, many experts in the
    security arena, including some in your own department, have
    said that securing cargo coming into this country should be one
    of our Nation's highest priorities. I could not agree more. We
    absolutely need a coordinated plan for a nationwide cargo
    security regime.

                                  TURF BATTLES

        However, I have been very disappointed with the turf
    battles that have been going on between Customs, TSA, and the
    Coast Guard as to who is in charge of cargo security. So I will
    want to explore with Commissioner Bonner how he plans on
    working under Secretary Hutchinson to implement each of the
    Department of Homeland Security's port and security programs
    into one coordinate regime.

                                CUSTOMS OFFICERS

        I am also interested to hear how our Customs and Border
    Protection (CBP) officers are being received overseas and the
    level of cooperation foreign customs agents are provided within
    programs like CSI and C-TPAT. I will also have questions about
    the implementation of security technology, such as radiation
    portal monitors at our ports of entry.
        Mr. Chairman, as always, I look forward to an informative
    hearing. I will have more specific topics to discuss with our
    witnesses during the question and answer period.
        Thank you very much.
        Senator Cochran. Thank you, Senator.
        Senator Stevens.
        Senator Stevens. Mr. Chairman, thank you very much. I have
    come to hear the testimony. No questions.
        Senator Cochran. Thank you very much, Senator.
        We are now ready to proceed. Mr. Aguirre, we will be glad
    to hear from you any opening statement that you have or
    comments in explanation of the President's budget request for
    your agency.

                       STATEMENT OF EDUARDO AGUIRRE, JR.

        Mr. Aguirre. Good morning, Chairman Cochran and Ranking
    Member Byrd and members of the subcommittee. My name is Eduardo
    Aguirre. And I have the honor of serving as the first Director
    of the U.S. Citizenship and Immigration Services within the
    Department of Homeland Security.
        In previous congressional testimony, I have shared my story
    of having arrived to the United States as a 15-year-old
    unaccompanied minor from Cuba. My parents sent me here to
    escape a repressive regime and to experience the freedoms and
    opportunities found only in America. I became a product of the
    legal immigration track, the very system that I am now charged
    with fundamentally transforming.
        We are a welcoming . And hard work and patriotism of our
    immigrants has made our Nation prosperous. We seek to continue
    to improve the administration of immigration benefits for the
    more than 6 million applicants who legally petition USCIS every
    year. Last year, upon creation of the USCIS, a team of 15,000
    and I embraced a simple but imperative mission, making certain
    that the right applicant receives the right benefit in the
    right amount of time or preventing the wrong individuals from
    obtaining our benefits.

                                THREE PRIORITIES

        We established three priorities that guide every aspect of
    our work: Eliminating the immigration benefit application
    backlog, improving customer service, while enhancing national
    security. As we mark our institutional 1-year anniversary, I am
    particularly pleased with the progress we have made and the
    professionalism exhibited by our employees day in and day out,
    while mitigating security threats that we know to be real and
    relentless.

                            ACCOMPLISHMENTS TO DATE

        To date, we have initiated online options for two
    application types, as well as case status updates. And we will
    be adding six more applications in May, which will account for
    over 50 percent of our work. We have established the Office of
    Citizenship. We have eliminated lines at some of our highest
    volume offices, and much more.
        USCIS is one of the largest fee-funded agencies in the
    Federal Government, charging fees from a variety of benefits
    from individuals seeking to enter, reside, or work in the
    United States. Therefore, the actual cash flow for our business
    operations vary from year to year with the number of
    immigration benefit applications received.

                               BACKLOG REDUCTION

        Mr. Chairman, as you know too well, backlogs from
    immigration benefit applications began to grow during the
    1990s, seeing an overall 77-percent increase from fiscal year
    1993 to fiscal year 2001. Beginning with fiscal year 2002,
    President Bush pledged and the Congress supported a multi-year
    $500 million initiative to attain the universal 6-month
    processing time standard by fiscal year 2006 for all
    immigration benefit applications while providing quality
    service to all customers.
        The President's fiscal year 2005 budget request seeks an
    additional $60 million in appropriated funds to boost the total
    dedicated to backlog reduction efforts to $160 million. The
    overall budget request for USCIS is $1.711 billion, which is
    $140 million in discretionary appropriated funds and $1.571
    billion in fees.
        The old INS developed a comprehensive backlog elimination
    plan prior to September 11, 2001, to achieve this goal. And we
    initially realized significant improvements in fiscal year
    2002. Processing times for applications averaged by type
    between 3 and 72 months. By the end of the year, these same
    averages were reduced to between 1 and 26 months. However, as
    we all know, September 11, 2001, profoundly affected our
    business operations, employees, and stakeholders. New guidance
    was issued. Security background checks were enhanced. And new
    processes were implemented. Already, many applications were
    subject to fingerprint and background checks. The enhanced
    checks instituted in July 2002 represents an additional set of
    name checks against a variety of workout databases housed in
    the Interagency Border Inspection System, which is also called
    IBIS.

                                SECURITY CHECKS

        Approximately 35 million security checks were performed
    last year by our agency. This change in the way we process
    immigration benefit applications has meant higher processing
    costs for USCIS. We make no apologies for our commitment to the
    integrity of the immigration system. And we will not cut a
    single corner or compromise security to process an application
    more quickly. We are making America safer against security and
    criminal threats one background check at a time.

                             SECURITY ENHANCEMENTS

        To ensure that our backlog does not increase further, we
    are currently seeking to adjust our fee schedule through the
    regulatory process by recovering costs associated with
    comprehensive security enhancements instituted after September
    11, 2001. The cost of these security enhancements is about $140
    million annually or $21 per application.

                                 NEW PRIORITIES

        The fee adjustments will also support new priorities, such
    as establishing a refugee corps and establishing the new Office
    of Citizenship. In addition, USCIS will develop study materials
    and teaching guides to ensure that the process of preparing for
    naturalization is more meaningful, as well as developing
    standardized testing procedures.
        We fully realize that increased funding along will not
    enable us to realize our goals. We are taking a hard look at
    the way we currently conduct our business. We are aggressively
    working to modernize our systems and increase our capacity
    through the reengineering of processes to include developing
    mechanisms to interact with customers in a more forward-
    reaching manner.

                          NEW BACKLOG ELIMINATION PLAN

        We are now in the process of finalizing a new backlog
    elimination plan that will outline changes to our business
    processes and which will set forth our revitalized mission of
    delivering immigration service in the future.

                            TEMPORARY WORKER PROGRAM

        On January 7, as has been mentioned here before, President
    Bush courageously confronted a broken system, one that has been
    ignored for too long. From the East Room of the White House, he
    called for Congress to deliver true reform and a new temporary
    worker program that facilitates economic growth, enhances
    national security, and promotes compassion. Many have asked how
    USCIS would implement its part of the President's temporary
    worker program should Congress pass the legislation.
        One of the principles of the President's proposed program
    is that it should be simple and user friendly, thus one that
    can be effectively administered. The President's proposal calls
    for aliens present in the United States as of January 7, 2004,
    to pay a processing fee upon enrolling in the program. USCIS
    anticipates recovering the cost of processing the applications
    through collections of a processing fee, as it is done
    currently with most immigration applications. The processing
    fee will be set based on a full cost recovery.

                               prepared statement

        Mr. Chairman, this concludes my prepared remarks. Thank you
    for your invitation to testify before this committee. And I
    look forward to your questions.
        [The statement follows:]

                  Prepared Statement of Eduardo Aguirre, Jr.,

        Good afternoon Chairman Cochran, Ranking Member Byrd and Members of
    the Subcommittee. My name is Eduardo Aguirre and I have the honor of
    serving as the first Director of U.S. Citizenship and Immigration
    Services, within the Department of Homeland Security.
        We are a welcoming Nation, and the hard work and patriotism of our
    immigrants has made our Nation prosperous. We seek to continue to
    improve the administration of immigration benefits for the more than
    six million applicants who petition USCIS on an annual basis.
        We continue to commit ourselves to building and maintaining an
    immigration services system that provides information and benefits in a
    timely, accurate, consistent, courteous, and professional manner; while
    preventing ineligible individuals from receiving benefits. Put more
    simply, it is our job to make certain that the right applicant receives
    the right benefit in the right amount of time, while preventing the
    wrong individuals from obtaining our benefits.
        USCIS is one of the largest fee-funded agencies in the Federal
    government--charging fees for a variety of benefits from individuals
    seeking to enter, reside, or work in the United States. Therefore, the
    actual cash flow for our business operations, including a network of
    250 local offices, Application Support Centers, Service Centers, Asylum
    Offices, National Customer Service Call (NCSC) Centers, Forms Centers,
    and Internet portals, varies from year to year with the number of
    immigration benefit applications received.
        In any typical work day, our workforce of 15,500 (one-third of whom
    are contractors) will:
      --Process 140,000 national security background checks;
      --Receive 100,000 web hits;
      --Take 50,000 calls at our Customer Service Centers;
      --Adjudicate 30,000 applications for immigration benefits;
      --See 25,000 visitors at 92 field offices;
      --Issue 20,000 green cards; and
      --Capture 8,000 sets of fingerprints and digital photos at 130
            Application Support Centers.
        USCIS has established three priorities: (1) eliminating the
    immigration benefit application backlog, (2) improving customer
    service, while (3) enhancing national security. In our first year of
    operation we have: initiated on-line options for a few application
    filings and case status updates; established the Office of Citizenship;
    eliminated lines at some of our highest volume offices; introduced a
    toll-free customer service help line; streamlined the Certificate of
    Citizenship process for internationally adopted children; developed a
    more secure travel document for permanent residents; and fleshed out
    our leadership team.
        Backlogs of immigration benefit applications began to grow during
    the 1990s. Overall, there was a 77 percent increase from fiscal year
    1993 to fiscal year 2001. The primary factors contributing to the
    backlogs were a dramatic increase in the number of applications and
    petitions received, delays in securing funding and positions to process
    this increasing number of applications, the lengthy 2 amount of time it
    takes to recruit, hire and train adjudicators, and the lack of a
    comprehensive approach to monitoring, supporting and maintaining timely
    processing.
        Beginning in fiscal year 2002, the President pledged, and the
    Congress supported, a multi-year $500 million initiative to attain a
    universal 6-month processing time standard for all immigration benefit
    applications while providing quality service to all customers. We
    developed a comprehensive Backlog Elimination Plan prior to September
    11, 2001 to achieve this goal. The Plan called for improvements to
    processes and expanded quality assurance efforts designed to achieve a
    high level of performance. We initially realized significant
    improvements. In fiscal year 2002, processing times for applications
    averaged, by type, between 3 and 72 months. By the end of the year,
    these same averages were reduced to between one and 26 months.
        However, September 11, 2001 profoundly affected our business
    operations, employees, and stakeholders. New guidance was issued,
    security background checks were enhanced, and new processes were
    implemented, including conducting interviews for the National Security
    Entry Exit Registration System (NSEERS) Program.\1\ Additionally, since
    July 2002, we formally enhanced our security background checks on the
    processing of all immigration benefit applications to ensure that those
    who receive immigration benefits have come to join the people of the
    United States in building a better society and not to do us harm.
    ---------------------------------------------------------------------------
        \1\ Program transferred to BTS in November of 2003.
    ---------------------------------------------------------------------------
        The process of performing enhanced security checks has been
    designed to compare information on applicants, and other beneficiaries
    as appropriate, who apply for an immigration benefit against various
    Federal lookout systems. The enhanced check instituted in July 2002
    represents an additional set of name checks against a variety of
    lookout databases housed in the Interagency Border Inspection System
    (IBIS). Already, many applications were subject to fingerprint and
    background checks.
        The purpose of conducting security checks is to help law
    enforcement agencies identify risks to the community and/or to national
    security and to prevent ineligible individuals from obtaining
    immigration benefits. On the vast majority of applications, we perform
    two checks; one when the application is initially received, and one at
    the time of adjudication. Approximately 35 million security checks are
    performed annually.
        In most of these cases (some 97 percent), the checks take only a
    few minutes. In the event of a ``hit'', however, we must hold that
    application without resolution until the security issue at hand is
    resolved. Last fiscal year, we processed a little over six million
    immigration benefit applications. Approximately 7 percent of the
    applications processed resulted in an initial security hit, and after
    further scrutiny, 2 percent resulted in confirmed security or criminal
    threat matches.
        This change in the way we process immigration benefit applications
    has meant higher processing costs for USCIS because the costs of
    performing these checks were not factored into the existing fee
    schedule. As a result, existing resources have been diverted to perform
    the additional security checks until the fees could be adjusted to
    cover these costs. Although the security enhancements have meant longer
    processing times in some categories and a significant growth in the
    application backlog, USCIS has taken the position that security
    absolutely will not be sacrificed in our search for increased
    efficiency. USCIS will continue to coordinate and identify suspected
    benefit fraud cases and refer them to ICE for enforcement action.
        Our intra-government coordination demonstrates that our approach
    realizes the intended results. By way of example, within the last month
    our background check procedures identified individuals wanted for
    murder in Portland and sexual assault in Miami. We are making America
    safer against security and criminal threats, one background check at a
    time.
        I believe that the President's fiscal year 2005 budget will set us
    on the right path toward enhancing immigration services. The budget
    includes a total for USCIS of $1.711 billion, $140 million in
    discretionary appropriated funds and $1.571 billion in fees, and seeks
    an additional $60 million to boost the total dedicated to backlog
    reduction efforts to $160 million. Our overall goal is to achieve a 6-
    month processing time standard for all immigration benefit applications
    by fiscal year 2006.
        To ensure that our backlog does not increase further, we are
    currently seeking to adjust our fee schedule through the regulatory
    process by recovering costs associated with comprehensive security
    enhancements instituted after September 11, 2001. The annual cost of
    these security enhancements are about $140 million or about $21 per
    application.
        The fee adjustments will also support new activities such as
    establishing a refugee corps to improve the quality of refugee
    adjudications and establishing the new Office of Citizenship \2\ to
    promote instruction and training on citizenship responsibilities to
    both immigrants and U.S. citizens. The Office of Citizenship is
    developing initiatives to target immigrants at two critical points on
    their journey toward citizenship: when they obtain permanent resident
    status and as they begin the formal naturalization process. In the
    past, the Federal government provided few orientation materials for new
    immigrants. In contrast, CIS will reach out to new immigrants at the
    earliest opportunity to provide them with information and tools they
    need to begin the process of civic integration. In addition, CIS will
    develop study materials and teaching guides to ensure that the process
    of preparing for naturalization is meaningful, so that immigrants who
    choose to become U.S. citizens have a real understanding of the
    commitment they are making when they take the Oath of Allegiance to the
    United States. The establishment of a Refugee Corps will provide a
    strong and effective overseas refugee processing program able to
    fulfill the U.S. Refugee Program's humanitarian objectives and more
    efficiently identify inadmissible persons and those who are of national
    security interest.
    ---------------------------------------------------------------------------
        \2\ As required by the Homeland Security Act of 2002.
    ---------------------------------------------------------------------------
        We fully realize that increased funding alone will not enable us to
    realize our goals. We are taking a hard look at the way we currently
    conduct our business. We are aggressively working to modernize our
    systems and increase our capacity through the reengineering of
    processes, the development and implementation of new information
    technology systems, and the development of mechanisms to interact with
    customers in a more forward-reaching manner. For example, USCIS has
    recently eliminated the backlog of applications for the Certificate of
    Citizenship on Behalf of an Adopted Child with a program that
    proactively provides parents the certificate.
        We are now in the process of finalizing a new Backlog Elimination
    Plan that will outline changes to our business processes, and which
    will set forth our revitalized vision of delivering immigration
    services in the future.
        Additionally, we are examining the standard of knowledge in the
    current citizenship test to ensure that prospective and new citizens
    know not only the facts of our Nation's history, but also the ideals
    that have shaped that history.
        The project management team for this initiative recently met with
    over a dozen historians, civics experts, and adult educators to discuss
    the redesign of the U.S. history portion of the naturalization test
    with the goal of making the test more meaningful, substantive, and
    fair. This group is examining the meaning of significant events that
    occurred in our Nation's history, and is exploring ways in which
    naturalization candidates may better retain the significance of these
    events. Recognizing that many Americans have strong beliefs about what
    our new citizens should know about our country, we plan to publish the
    proposed test content in the Federal Register and ask for public
    comment. We believe that many Americans would like to have a say in
    what we are asking our new citizens to learn, and we are eager to hear
    from them. We look forward to briefing you and other Members of
    Congress on our proposed new citizenship test content and receiving
    your feedback, as well.
        In a related effort, this same team is working to redesign the
    current citizenship testing methodology in an effort to ensure more
    uniform results. Currently, a candidate in Los Angeles is, in all
    likelihood, not tested the same way or asked the same questions as a
    candidate taking the same exam on the same day in Boston. Therefore, we
    are developing standardized testing procedures so that applicants can
    be assured that they are experiencing an equitable testing process.
        We do not want to make the test more difficult. We do not want to
    make it less difficult. We want to make it more meaningful in a way
    that does not have an adverse impact on any particular group of
    applicants. Therefore, we will carefully pilot test the revised
    English, history, and government tests before implementing them. And,
    we will continue to consult with our stakeholders to solicit their
    input.
        Our plan is to implement the new test and testing process in 2006.
    Given the importance of the ultimate benefit for those tested--U.S.
    citizenship--this process is not one that can or should be rushed. We
    are committed to improving the current process and to improving it in
    the right way.
        As we celebrate our institutional 1-year anniversary, USCIS has
    stood up an organization of which we are very proud. We have
    established a leadership team, improved many of our operational
    processes, and continue to strive to make further improvements. The
    funding requested in the President's fiscal year 2005 budget request is
    an important factor in continuing to improve the service we can offer
    our customers.
        This concludes my prepared remarks. I thank you for the invitation
    to testify before this committee and I would be happy to answer any
    questions.

        Senator Cochran. Thank you, Mr. Aguirre.
        Mr. Bonner, we will be glad to hear from you now.

                   STATEMENT OF COMMISSIONER ROBERT C. BONNER

        Mr. Bonner. Yes, Mr. Chairman. Thank you. Senator Byrd,
    other members of the subcommittee, I am pleased to be here to
    discuss the Customs and Border Protection, or CBP, 2005 budget
    request. Let me just make a couple of observations. First of
    all, one of the most important ideas of the reorganization into
    the Department of Homeland Security was to do, as Secretary
    Ridge put it, create one face at the border, one agency for our
    borders to manage and secure the borders of our country. And
    that started on March 1, 2003, just over a year ago.
        When all of the immigration inspectors of the former INS,
    all the agriculture border inspectors from the Department of
    Agriculture, all of the border patrol agents merged with the
    bulk of the U.S. Customs Service to form the Bureau of Customs
    and Border Protection, an agency within the Department of
    Homeland Security, responsible for managing and securing our
    Nation's borders.
        CBP is the largest and perhaps one of the most profound
    actual mergers of people and functions taking place as a result
    of the Department of Homeland Security reorganization. The
    number of employees in CBP equals about one-fourth of all the
    employees of the Department of Homeland Security. And that is
    not particularly surprising when one considers the importance
    of the security of our borders to the security of our homeland.
        By unifying the border agencies we are, and we will be,
    more effective and more efficient than we were when border
    responsibilities were literally fragmented among four different
    entities or agencies of our government, reporting to three
    different departments of our government, which is the way we
    were organized before March 1, 2003, before the creation of the
    Department of Homeland Security.
        And I will also report to this subcommittee that we have
    made great progress towards successfully completing this
    historic merger.
        In the last year alone, I have selected one port director
    for each and every one of the 300 plus ports of entry to the
    United States. We no longer have two or three different port
    directors for agriculture, immigration, and customs. We have
    one port director at all ports-of-entry into this country.

                                 CBP INSPECTORS

        We have provided antiterrorism training for all CBP
    inspectors and equipped all front line inspectors with
    radiation detection devices. We have implemented unified
    primary inspections at our international airports. So for the
    first time, we are performing a primary inspection, not just
    for immigration, but for all purposes, immigration, customs,
    and agriculture purposes. No more running the gauntlet of three
    different agencies when you enter the United States at one of
    our international airports.

    INTEGRATION OF PASSENGER ANALYSIS UNITS AND CONSOLIDATED ANTITERRORISM
                             SECONDARY EXAMINATIONS

        We have integrated our passenger analysis units and
    consolidated our anti-terrorism secondary examinations, so that
    all of our customs and immigration expertise and authorities
    are brought to bear, and are used in identification,
    questioning, and searching of potential terrorists arriving at
    our borders.

      NEW CBP UNIFORM FOR ALL CBP INSPECTORS AND CREATED AN OFFICE OF THE
                                 BORDER PATROL

        We have rolled out a new CBP uniform for all of CBP
    inspectors at our ports of entry. All 19,000 CBP inspectors
    will be in this new uniform by July of this year. And many of
    them already are. And we have integrated the border patrol in
    CBP by creating an Office of the Border Patrol. We have revised
    the border patrol's national strategy to reflect the priority
    mission of CBP and the Department of Homeland Security. And we
    have implemented portions of that by stationing now over 1,000
    border patrol agents at our northern border sectors.

                            PRIORITY MISSION OF CBP

        The priority mission of CBP is preventing terrorists and
    terrorist weapons from entering our country, but we recognize
    that to do that mission we need to carry it out without
    stifling the flow of legitimate trade and travel that is so
    vital to our country's economy and to our way of life. Those do
    not have to be mutually exclusive and we are pursuing smart
    border initiatives to make them mutually reinforcing.
        For example, rather than physically inspecting the
    approximately 23 million containers that arrive by sea, rail,
    and truck into the United States yearly, which would be
    tantamount to closing our borders down and shutting down our
    economy, we have taken measures to identify the high-risk
    containers and inspect them rapidly, using state-of-the-art
    technology when they arrive at our seaports or our land
    borders.
        We are obtaining electronic data on virtually all shipments
    that are coming to the United States. And we are using that
    data in our automated targeting system to identify all
    potentially high-risk containers, particularly for the
    terrorist threat. And we are inspecting all high-risk
    containers for terrorist weapons using our non-intrusive
    inspection technology and our radiation detection technology.

                         CONTAINER SECURITY INITIATIVE

        We are also, though, employing a layer defense which is an
    extended border strategy. And that is through the Container
    Security Initiative. We are pushing our zone of security beyond
    our physical borders by placing our personnel overseas to work
    with other governments to target, identify, and inspect their
    high-risk containers destined for the United States, and
    destined for our seaports before they are loaded aboard vessels
    at foreign seaports.
        I am not going to discuss this chart I put up here but that
    chart indicates in a nutshell that already countries, 38
    foreign ports, have agreed with us to deploy and implement the
    Container Security Initiative. And we have already moved out
    rapidly and have implemented, by stationing our personnel
    overseas as CSI targeters at 18 foreign seaports. And, of
    course, we are not stopping there. We are going to continue to
    expand the container security initiative.

                  CUSTOMS TRADE PARTNERSHIP AGAINST TERRORISM

        We also, under the Customs Trade Partnership Against
    Terrorism, we are working with the private sector to increase
    the security of their supply chains, literally from the foreign
    loading docks to our ports of entry into the United States.

                        FISCAL YEAR 2005 BUDGET REQUEST

        Our budget request, Mr. Chairman, for 2005 for program
    increase is $190 million. That includes funding for the
    container security initiative to continue its expansion,
    funding to expand the Customs Trade Partnership Against
    Terrorism. There is some significant funding for radiation
    detection equipment to further expand our portal radiation
    monitors and other detection equipment at our ports of entry
    into the United States to better detect against radiological
    and even nuclear weapons.

                               PREPARED STATEMENT

        There is funding for the enhancements of our automated
    targeting system, as well as for surveillance and sensoring
    technology for the border patrol, and some funding for UAVs to
    deploy and operate Unmanned Aerial Vehicles to better detect
    illegal crossings at our borders.
        So I want to thank you, Mr. Chairman and members of this
    committee, for the support you have given already to Customs
    and Border Protection. And in working together, I am confident
    that we will succeed in better securing our borders against the
    terrorist threat.
        That concludes my statement, Mr. Chairman. And I will
    answer any questions at the appropriate time that you or this
    subcommittee may have.
        [The statement follows:]

                     Prepared Statement of Robert C. Bonner

                           INTRODUCTION AND OVERVIEW

        Chairman Cochran, Ranking Member Byrd, Members of the Subcommittee,
    it is a privilege and an honor to appear before you today to discuss
    Customs and Border Protection's (CBP) fiscal year 2005 budget request.
        I want to begin by expressing my gratitude to the Committee on
    Appropriations for the support it provided for important initiatives
    implemented by CBP last year. That support enabled CBP to make
    significant progress in protecting our country against the terrorist
    threat. I also want to thank Congress for the support it provided in
    creating the new Department of Homeland Security, and the new Customs
    and Border Protection agency within that Department. As the head of
    CBP, I look forward to working with you to build on these successes.
        The priority mission of CBP is to prevent terrorists and terrorist
    weapons from entering the United States. That extraordinarily important
    priority mission means improving security at our physical borders and
    ports of entry, but it also means extending our zone of security beyond
    our physical borders--so that American borders are not the first line
    of defense.
        And we must do this while continuing to perform our traditional
    missions well. These missions include apprehending individuals
    attempting to enter the United States illegally, stemming the flow of
    illegal drugs and other contraband, protecting our agricultural and
    economic interests from harmful pests and diseases, protecting American
    businesses from theft of their intellectual property, regulating and
    facilitating international trade, collecting import duties, and
    enforcing U.S. trade laws. In fiscal year 2003, CBP processed 26.1
    million trade entries, collected $24.7 billion in import duties, seized
    2.2 million pounds of narcotics, and processed 412.8 million
    pedestrians and passengers and 132.2 million conveyances.
        We must perform all of this important security and border-related
    work without stifling the flow of legitimate trade and travel that is
    so important to our nation's economy. In other words, we have ``twin
    goals'': Building more secure and more efficient borders.
        Our total program increase request for fiscal year 2005 is $223
    million. These funds will help CBP fulfill its priority mission of
    preventing terrorists and terrorist weapons from entering the United
    States. As Commissioner, I will also devote needed funds to support the
    automation and information technology programs that will improve
    overall operations of the agency, and I will devote funds to support
    the traditional missions for which CBP is responsible.
        Mr. Chairman, although I will touch on each of these areas in my
    statement, and outline the actions CBP has taken or is planning to take
    in each, I want to point out that in many cases, funds spent in one
    area have a direct and positive impact on other areas. For example,
    funds spent on automation and information technology provide invaluable
    assistance to our priority mission of preventing terrorists and
    terrorist weapons from entering the United States. Also, funds spent on
    our priority mission often result in improvements in our effectiveness
    and efficiency in carrying out our traditional missions, such as
    interdicting narcotics, and vice versa.
        By way of summary of the fiscal year 2005 budget for CBP, I can
    tell you that the program increases we are requesting include:
      --$25 million for the Container Security Initiative, which will
            support the continued expansion of the program, including the
            stationing of CBP personnel in additional key international
            seaports to examine high-risk cargo before it is placed on
            ships bound for the United States;
      --$15 million for the Customs-Trade Partnership Against Terrorism to
            increase supply chain security and expedite the clearance of
            legitimate trade;
      --$50 million for Radiation Detection and Non-Intrusive Inspection
            Technology to detect weapons of mass destruction;
      --$21 million for Targeting Systems Enhancements to identify high-
            risk travelers and goods for inspection while allowing the vast
            majority of law abiding travelers and commerce to continue
            unimpeded;
      --$64 million for Border Patrol Surveillance and Sensor Technology
            for the expansion of the remote video system along the southern
            and northern borders to detect illegal crossings and to
            increase the effectiveness of agents responding to such
            crossings;
      --$10 million for Unmanned Aerial Vehicles to develop, procure,
            deploy, and operate a system of unmanned aerial vehicles to
            support the Border Patrol by detecting and monitoring illegal
            border crossings; and
      --$5 million to support the International Trade Data System (ITDS) to
            revolutionize the way international trade data is collected,
            disseminated, and used.
        In my statement, I will discuss these programs and others that CBP
    has been working on during the past year. I would like to begin,
    though, with a brief update for the Subcommittee on the status of CBP
    after 1 year.

                    CUSTOMS AND BORDER PROTECTION AT 1 YEAR

        On March 1st, the Department of Homeland Security celebrated its 1
    year anniversary as a Department. The anniversary marked the successful
    transfer of approximately 42,000 employees from the U.S. Customs
    Service, the Immigration and Naturalization Service, and the Animal and
    Plant Health Inspection Service (APHIS) to the new Customs and Border
    Protection agency in the Department of Homeland Security. CBP is the
    largest actual merger of people and functions within the Department of
    Homeland Security. Indeed, about one-fourth of the personnel of DHS are
    housed within CBP. That is not surprising considering how important the
    security of our borders is to the security of our homeland.

    One Face at the Border
        To create CBP, on March 1, we took a substantial portion of U.S.
    Customs and merged that with all of the immigration inspectors and
    Border Patrol from the former INS, and inspectors from the Department
    of Agriculture's APHIS. This means that for the first time in our
    country's history, all agencies of the United States Government with
    significant border responsibilities have been integrated and unified
    into a single Federal agency responsible for managing, controlling and
    securing our Nation's borders.
        At CBP, we are creating, as Secretary Ridge has called it, ``One
    Face at the Border''--one border agency for our country. In the year
    following its creation, CBP has made significant strides toward
    unification. And America is safer and its border are more secure than
    they were when border responsibilities were fragmented in three
    different departments of government, as they were before March 1,
    2003--before the creation of the Department of Homeland Security.
        On March 1, 2003, CBP designated one Port Director at each port of
    entry and put in place a single, unified chain of command. This was the
    first time there has ever been one person at each of our nation's ports
    of entry in charge of all Federal Inspection Services. And in terms of
    an immediate increase in antiterrorism security, on Day One, all
    frontline, primary inspectors at all ports of entry into the United
    States were equipped with radiation detection devices. Since March 1,
    2003, all inspectors have also received antiterrorism training.
        Last year, we began rolling out unified CBP primary inspections at
    international airports around the country, starting with U.S. citizens
    and Lawful Permanent Residents. Unified primary means that the CBP
    inspector in the booth will conduct the primary inspection for all
    purposes--immigration, customs, and agriculture. Launched at Dulles,
    Houston, JFK, Newark, LAX, Atlanta, Miami, San Francisco, unified
    primary is now operational at all major international airports. This is
    a major step forward in eliminating the process of travelers
    potentially having to ``run the gauntlet'' through three separate
    inspection agencies. Although legacy customs and immigration inspectors
    have assumed interchangeable roles at the land border ports of entry
    for years, this is the first time unified primary has been done on a
    national scale at our country's airports.
        Along with unified primary, we have also developed and are
    implementing combined anti-terrorism secondary which leverages the
    expertise and authorities of both legacy customs and immigration to
    conduct a joint secondary inspection of passengers deemed high-risk for
    terrorism. CBP has also begun to coordinate and consolidate our
    passenger analytical units--the units that identify potential high-risk
    travelers for inspection. Again, this brings together the customs and
    immigration experience and authority to more effectively and
    efficiently identify and interdict individuals who pose a possible
    terrorist risk.

    Unifying Symbols and the CBP Officer Position
        Since July 2003, we have begun rolling out a new CBP uniform and
    patch for all CBP inspectors at our Nation's ports of entry. It will
    replace the three different customs, agriculture, and immigration
    inspectional uniforms and patches. The new uniform and patch represent
    our most visible unifying symbols to the American public. The new
    uniform is being implemented in four phases. In the first phase,
    completed as of October 1, 2003, all CBP managers and supervisors
    converted to the new uniform. Other CBP uniformed personnel will be
    phased in at various points with implementation scheduled to be
    complete by July of this year.
        All of these actions are helping us unify and become more effective
    as an agency. Perhaps our most significant step toward achieving ``One
    Face at the Border,'' though, was announced by Secretary Ridge on
    September 2, 2003: the rollout of the new ``CBP Officer'' position. As
    of October, 2003, we stopped hiring and training legacy ``immigration''
    or ``customs'' inspectors and began hiring and training a new group of
    ``CBP Officers,'' who will be equipped to handle all CBP primary and
    many of the secondary inspection functions, in both the passenger and
    cargo environments. We are also deploying CBP Agriculture Specialists
    to perform more specialized agricultural inspection functions in both
    these environments.

    Integrated Training
        Training is a very important component to the roll out of the CBP
    Officer. We have created a new 14 week, 71-day basic course that
    provides the training necessary to conduct primary processing and to be
    familiar with secondary processing of passengers, merchandise, and
    conveyances in all modes of transport--air, sea, and land. The new CBP
    Officer course was built from the 53-day basic Customs inspector course
    and the 57-day basic Immigration inspector course, with redundancies
    removed, and with additions to address anti-terrorism and CBP's role in
    agriculture inspection. The training also supports the traditional
    missions of the legacy agencies integrated in CBP. Our first CBP
    Officers were hired on September 22, 2003, and they immediately started
    training at the Federal Law Enforcement Training Center (FLETC).

    Enhanced Security Between Ports of Entry
        We have also worked very hard to integrate the Border Patrol into
    CBP and simultaneously to improve the security of our country between
    the ports of entry. We have revised and refocused the Border Patrol's
    National Strategy, which had previously been focused on preventing the
    flow of illegal aliens and drugs between ports of entry on our border
    with Mexico. It now includes an aggressive strategy for protecting
    against terrorist penetration, at both our northern and southern
    borders.
        And we have started implementing this Strategy. On 9-11, there were
    only 368 authorized positions for Border Patrol agents for the entire
    northern border. In the last year, we have added almost 500 agents to
    the northern border, giving us more than 1,000 total--exceeding the
    goal I set soon after March 1, 2003. This staffing increase will better
    secure our border against terrorist penetration.
        But we are doing more than just adding staffing. We are adding
    sensors and other technology that assist in detecting illegal crossings
    along both our northern and southern borders, including Remote Video
    Surveillance (RVS) systems. These RVS systems are real-time remotely
    controlled force enhancement camera systems, which provide coverage
    along the northern and southern land borders of the United States, 24
    hours per day, 7 days a week. The RVS system significantly enhances the
    Border Patrol's ability to detect, identify, and respond to border
    intrusions, and it has a deterrent value as well.
        And we have seen gains in security by integrating the Border Patrol
    into CBP. For example, the Office of Field Operations and the Office of
    the Border Patrol are now able to quickly and easily share equipment
    and information to support one another, and have done so on many
    occasions, whether it be the use of radiation detection equipment at
    higher threat conditions, or the use of truck imaging equipment to
    detect and deter human smuggling.
    meeting our twin goals: building more secure and more efficient borders
        As the single, unified border agency of the United States, CBP's
    mission is vitally important to the protection of America and the
    American people. In the aftermath of the terrorist attacks of September
    11th, we have developed numerous initiatives to meet our twin goals of
    improving security and facilitating the flow of legitimate trade and
    travel. Funds from the fiscal year 2005 budget will help us expand
    those initiatives and to begin new ones to ensure further protection of
    both the American people and the American economy. Our strategy in
    implementing these initiatives involves a number of factors, including:
    (A) constantly improving and expanding our targeting systems to better
    screen more people and goods entering and departing the United States;
    (B) pushing our ``zone of security outward'' by partnering with other
    countries; (C) pushing our ``zone of security outward'' by partnering
    with the private sector; (D) deploying advanced inspection technology
    and equipment at our ports of entry to detect weapons of mass
    destruction; and (E) deploying advanced detection and monitoring
    equipment between our ports of entry to detect illegal crossings.

    Enhancing our ability to identify high-risk people and cargo
        Information is one of the most important keys to our ability to
    increase security without stifling legitimate trade and travel. Good
    information enables us to more accurately identify--or target--what is
    ``high risk,'' defined as a potential threat, and what is low risk or
    absolutely no risk whatsoever. The separation of high risk from no risk
    is critical because searching 100 percent of the cargo and people that
    enter the United States would unnecessarily cripple the flow of
    legitimate trade and travel to the United States. What is necessary and
    advisable is searching 100 percent of the highrisk cargo and people
    that enter our country. To do this, we need to be able to identify what
    is high risk, and do so as early in the process as possible. CBP has
    several programs and initiatives that help us accomplish that task.

                Advance Electronic Information
        Since September 11th, CBP has taken numerous steps to ensure that
    it has the information it needs, at the right time, to identify all
    high-risk people and shipments destined for the United States. As a
    result of these efforts, and the strong support of the Congress, CBP
    now has, among other authorities, the statutory authority to require
    Advance Passenger Information and Passenger Name Record data on all
    people flying into and out of the United States, as well as advanced,
    electronic manifest data on cargo destined for or departing the United
    States. CBP has worked aggressively to promulgate and implement
    regulations pursuant to these enabling statutes. For example, we are
    currently implementing regulations requiring advance, electronic
    manifest (or similar) data on virtually all cargo coming into the
    United States by any mode (rail, truck, aircraft, vessel), whereas this
    data was previously provided on a voluntary, and very limited basis.
    These requirements should be fully implemented by early fiscal year
    2005.

                National Targeting Center (NTC)
        The NTC began around the clock operations on November 10, 2001,
    with a priority mission of providing tactical targeting and analytical
    research support for Customs' anti-terrorism efforts. As personnel from
    Customs, the INS, and the USDA came together on March 1, 2003, under
    the umbrella of CBP, the NTC mission broadened commensurately with the
    CBP role in support of Homeland Security.
        The NTC is primarily staffed by CBP Officers and analysts that are
    experts in passenger and cargo targeting for air, sea, and land
    operations in the inbound and outbound environments. The NTC develops
    tactical targets--potentially high-risk people and shipments that
    should be subject to a CBP inspection--from raw intelligence, trade,
    travel, and law enforcement data. NTC also supports CBP field elements,
    including Container Security Initiative (CSI) personnel stationed in
    countries throughout the world, with additional research assets for
    passenger and cargo examinations.
        In January 2003, the NTC staff relocated to a state-of-the-art
    facility. The new facility is designed to accommodate representatives
    from all CBP disciplines, including representatives from the Office of
    Border Patrol, the Office of Intelligence, and the Office of
    Information and Technology, as well as liaison staff from the law
    enforcement and intelligence communities. The NTC has developed liaison
    with the Office of Naval Intelligence and the U.S. Coast Guard via an
    exchange of personnel with the National Marine Intelligence Center. NTC
    has also exchanged personnel with the Transportation Security
    Administration, the Department of Energy, and provided targeting
    expertise to the DHS Operations Center.
        The funding sought in fiscal year 2005 will enable the NTC to
    continue to expand its infrastructure and personnel to meet the needs
    of CBP as we see continued increases in passengers and commercial
    shipments coming to the United States. It will also enable the NTC to
    continue to play a central role in interagency activities related to
    identifying highrisk people and cargo.

                Automated Targeting System
        The Automated Targeting System (ATS), which is used by NTC and
    field targeting units in the United States and overseas, is essential
    to our ability to target high-risk cargo and passengers entering the
    United States. ATS is the system through which we process advance
    manifest and passenger information to pick up anomalies and ``red
    flags'' and determine what cargo is ``high risk,'' and therefore will
    be scrutinized at the port of entry or, in some cases, overseas.
        The funding increases sought for ATS in the fiscal year 2005 budget
    will allow for the continued improvement of the system as well as
    provide it with the capacity to process the electronic data related to
    the ever-increasing number of people and goods entering the United
    States. For example, the funding will allow us to develop and implement
    a version of ATS that, for the first time, will be able to identify
    potentially high-risk travelers in passenger vehicles. It will also be
    used to upgrade our passenger targeting system by improving the amount
    of government data that the system can access and analyze as well as
    provide us with the capacity to train more people on the use of the
    system. On the cargo side, the funding will permit ATS to increase its
    capacity and upgrade its capabilities by utilizing cutting edge
    information analysis technologies developed by CBP and the private
    sector.

    Pushing our Zone of Security Outward--Partnering with Other Countries
                Container Security Initiative (CSI)
        To meet our priority mission of preventing terrorists and terrorist
    weapons from entering the United States, I believe CBP must ``push our
    zone of security outward''--so that our borders are not the first line
    of defense to keep terrorists and terrorist weapons out of the United
    States. We have done this by partnering with other countries on our
    Container Security Initiative (CSI), one of the most significant and
    successful homeland security initiatives developed and implemented
    after 9-11.
        Almost 9 million cargo containers arrive at U.S. seaports annually.
    Because of the sheer volume of sea container traffic and the
    opportunities it presents for terrorists, containerized shipping is
    uniquely vulnerable to terrorist attack. Under CSI, which is the first
    program of its kind, we are partnering with foreign governments to
    identify and inspect high-risk cargo containers at foreign ports,
    before they are shipped to our ports and pose a threat to the United
    States and to global trade.
        The four core elements of CSI are:
      --First, identifying ``high-risk'' containers, using ATS and the 24-
            hour rule, before they set sail for the United States.
      --Second, pre-screening the ``high-risk'' containers at the foreign
            CSI port before they are shipped to the United States.
      --Third, using technology to pre-screen the high-risk containers,
            including both radiation detectors and large-scale imaging
            machines to detect potential terrorist weapons.
      --Fourth, using smarter, ``tamper-evident'' containers--containers
            that indicate to CBP officers at the port of arrival whether
            they have been tampered with after the security screening.
        CSI continues to generate exceptional participation and support.
    The goal for the first phase of CSI was to implement the program at as
    many of the top 20 foreign container ports--in terms of volume of cargo
    containers shipped to United States seaports--as possible. Those ports
    account for nearly 70 percent of all cargo containers arriving at U.S.
    seaports. Today, the governments representing 19 of the top 20 ports
    have agreed to implement CSI, and I am confident that we will reach
    agreement with the 20th port very soon.
        We announced the second phase of CSI in June 2003. Under CSI Phase
    II, we will implement CSI at other foreign ports that ship a
    significant volume of cargo to the United States, and that have the
    infrastructure and technology in place to support the program. We have
    already signed CSI agreements with Malaysia, Sweden, South Africa, and
    Sri Lanka. Once we have Phase II implemented, we anticipate that CSI
    will cover approximately 80 percent of the containers coming to the
    United States.
        Right now, CSI is operational in the following locations:
    Rotterdam, the Netherlands; Le Havre, France; Bremerhaven and Hamburg,
    Germany; Antwerp, Belgium; Singapore; Yokohama, Japan; Hong Kong;
    Gothenburg, Sweden; Felixstowe, United Kingdom; Genoa and La Spezia,
    Italy; Busan, Korea; Durban, South Africa; and Port Kelang, Malaysia.
    These locations account for nearly 70 percent of all cargo containers
    destined for the United States.
        I want to express my gratitude to the Committee members for their
    support of CSI in fiscal year 2004. With the $25 million increase in
    funding that we are requesting for CSI in fiscal year 2005, we will
    have CSI in place and operational at as many as 40 seaports around the
    world.

                Immigration Control Officers (ICOs)
        Over the last few years, we have also started applying the concept
    underlying CSI, i.e., pushing our zone of security beyond our borders,
    to the movement of people. This effort originated with the INS and its
    Immigration Control Officer (ICO) program. Through CBP, this effort is
    continuing, and being refined to better address the terrorist threat.
        The roles and responsibilities of the ICOs are to: (1) seek to
    prevent the onward movement of people positively identified as
    presenting a security threat to the carrier or passengers on
    international flights destined to the United States; (2) disrupt and
    deter the smuggling of special interest aliens, or fraudulently
    documented and otherwise inadmissible aliens destined to the United
    States; (3) provide advance notice of passengers on onward transit
    airports and destination airports whose true identity and purposes
    warrant closer inspection; (4) collect law enforcement intelligence on
    known and suspected smugglers and smuggling facilitators; (5) seek,
    through cooperation with host government law enforcement agencies and
    U.S. law enforcement agencies, the apprehension and prosecution of
    smugglers, facilitators and other identified criminal aliens; and (6)
    provide training in fraudulent detection, migration trends, passenger
    assessment and related topics to United States and host government law
    enforcement, immigration and carrier personnel. The ICOs carry out
    their responsibilities in accordance with the Code of Conduct for
    Immigration Liaison Officers of the International Air Transport
    Association.
        Canada, Australia, the United Kingdom and the Netherlands have ICOs
    stationed around the world. In concert with our international partners,
    the INS launched Operation Global Shield in October 2002 with the
    deployment of officers to more than a dozen locations, including major
    transit hubs in Central and South America, Europe and the Far East.
    This was a very successful effort. Operation Global Shield resulted in
    2,971 interceptions in a 5 month period.
        CBP is now building on the lessons learned from Operation Global
    Shield as well as the experiences of our international partners to
    refine the ICO concept to better respond to the threat of international
    terrorism. The United States currently has over 70 legacy immigration
    personnel overseas, many of whom are engaged in ICO activities, but not
    on a full time basis. At CBP, we will be working with these personnel
    to refine their ICO work to ensure that we prevent potential terrorists
    from boarding aircraft destined for the United States. We will also be
    putting in place a new, refined ICO program in Warsaw, Poland in the
    near term to test and refine our antiterrorist measures before
    expanding the program to other locations.

    Pushing our Zone of Security Outward--Partnering with the Trade
                Customs-Trade Partnership Against Terrorism (C-TPAT)
        The Customs-Trade Partnership Against Terrorism (C-TPAT) is a
    voluntary partnership between CBP and industry to secure international
    supply chains from end to-end. Through C-TPAT, participants develop and
    maintain secure supply chains from the foreign factory floor to the
    ultimate destination in the U.S. CBP, in return, offers C-TPAT
    shipments expedited processing and provides C-TPAT participants with
    other benefits.
        The program is rigorous. In order to join C-TPAT, a company must
    conduct a self-assessment of its current supply chain security
    procedures using C-TPAT security guidelines developed in partnership
    with logistics and security experts from the trade. A participant must
    also commit to increasing its supply chain security by addressing any
    vulnerabilities that exist. Perhaps most importantly, participants also
    make a commitment to work with their business partners and customers
    throughout their supply chains to ensure that those businesses also
    increase their supply chain security. By leveraging the influence of
    importers and others on different participants in the supply chain, C-
    TPAT is able to increase security of U.S. bound goods at the time of
    container stuffing. This reach--to the foreign loading dock--is
    critical to the goal of increasing supply chain security.
        Although C-TPAT is a partnership, we are not simply taking the
    participants at their word when it comes to their supply chain
    security. As a former President once said: ``Trust, but verify.''
    Applying this lesson, we have created a cadre of specially trained
    supply chain security specialists to validate the commitments made by
    C-TPAT participants--to ensure that they are increasing supply chain
    security as they have promised CBP. These specialists meet with
    personnel from C-TPAT participants and their business partners and
    observe the security of their supply chains, including security at
    overseas loading docks and manufacturing plants. Through this process,
    we work with C-TPAT participants to identify ways that they can further
    increase their supply chain security and we ensure that companies that
    are not honoring their commitments lose their C-TPAT privileges.
        C-TPAT is currently open to all importers, cross-border air, sea,
    truck, and rail carriers, brokers, freight forwarders, consolidators,
    non-vessel operating common carriers (NVOCCs), and U.S. Marine and
    Terminal operators. We are currently enrolling certain foreign
    manufacturers in the C-TPAT program as well, and we will continue to
    develop ways to include this important element of the supply chain in
    the program. The intent is to construct a supply chain characterized by
    active C-TPAT links at each point in the logistics process.
        As of March 12, 2004, the C-TPAT participation and validation
    numbers are as follows:

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                          Oldest
                                                                    Security    Certified   Insufficient   Responses     Security   Validations  Validations
                                                       Partners     Profile      Partners     Security        Sent     Profile Not   Initiated    Completed
                                                                    Received                  Profiles                   Reviewed
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Importers......................................        3,519        2,434        1,580           277        1,857           41          305           65
    Carriers.......................................          998          803          519            90          609           34          183           40
    Brokers/Forwarders.............................        1,205          934          759           109          868           31          208          106
    Foreign Manufacturers..........................          118           58           45             1           46           21            0            0
    Marine Port Auth. & Terminal Op................           41           32           23             4           27           36           22           10
                                                    --------------------------------------------------------------------------------------------------------
          Total....................................        5,881        4,261        2,926           481        3,407          N/A          718          221
    --------------------------------------------------------------------------------------------------------------------------------------------------------

                Free and Secure Trade (FAST)
        Building on C-TPAT, we have created the Free and Secure Trade
    (FAST) program with Canada and Mexico. This program increases the
    supply chain security of goods moving across our land borders and also
    facilitates the movement of legitimate commerce by aligning customs
    processes on both sides of the border and offering the most expedited
    customs processing available on the land border. To be eligible for
    FAST processing, importers, carriers, and manufacturers (on the
    southern border) must participate in C-TPAT and must use a FAST-
    registered driver. Because each participant must meet C-TPAT supply
    chain criteria and the driver must be vetted by CBP (including
    exhaustive database checks and a personal interview), the FAST program
    substantially increases the security of supply chains across our
    northern and southern borders. And because FAST relies on advanced
    electronic data transmissions and transponder technology, CBP can offer
    FAST shipments the most expedited clearance procedures available today.
    With these procedures in place, CBP can focus its security efforts and
    inspections where they are needed most--on high-risk commerce.
        FAST is currently operational at 11 major northern border crossings
    and 2 major southern border crossings. The program will expand to
    additional locations in fiscal year 2005.
        I would like to thank the Committee for its consistently strong
    support for C-TPAT and FAST. The $15 million funding increase we have
    sought for C-TPAT in fiscal year 2005 will enable us to continue to
    expand both programs by enrolling additional participants. It will also
    allow us to add a substantial number of supply chain security
    specialists to our ranks, thereby ensuring that as the program grows,
    we will be able to conduct an appropriate number of validations. As a
    result, we will substantially increase the security of our
    international supply chains.

    Using Technology to Detect Weapons of Mass Destruction at our Ports of
            Entry
        As trade increases, CBP's reliance on Non-Intrusive Inspection
    (NII) technology to secure the borders becomes more and more critical.
    Only by using NII technology to speed the inspections process for
    weapons of mass destruction and contraband can CBP meet its twin goals
    of increasing security and at the same time facilitating trade.
        CBP uses various technologies in different combinations to
    substantially increase the likelihood that a nuclear or radiological
    weapon or weapons grade material will be detected. In addition, CBP
    uses NII technology to detect and interdict narcotics, currency and
    other contraband secreted in large containers and commercial shipments.
    Technologies deployed to our nation's land, sea and air ports of entry
    include largescale X-ray and gamma-imaging systems--systems that can
    image the contents of an entire container in seconds. These systems
    include the Vehicle and Cargo Inspection System (VACIS), Mobile VACIS,
    Truck X-ray, Mobile Truck X-ray, Rail VACIS, Mobile Sea Container
    Examinations Systems and the Pallet Gamma-ray System. In September
    1996, our first large-scale NII system, a Truck X-ray, became
    operational in Otay Mesa, California. Today, we have 145 large-scale
    NII systems deployed.
        In addition, we have developed and begun implementing a national
    radiation detection strategy. Pursuant to that Strategy, we are
    deploying nuclear and radiological detection equipment to include
    personal radiation detectors (PRDs), radiation portal monitors (RPMs)
    and next generation radiation isotope identifier devices (RIIDs). In
    combination with our layered enforcement strategy--working overseas to
    prevent the proliferation of nuclear materials and to detect them
    before they are shipped to the United States--and our use of multiple
    inspection technologies, these tools currently provide CBP with
    significant capacity to detect nuclear or radiological materials. Our
    fiscal year 2005 request for $50 million would provide CBP with the
    funding to continue to purchase and deploy the technologies needed to
    implement its national radiation detection strategy.

    Using Technology to Detect and Monitor Illegal Crossings Between our
            Ports of Entry
                Integrated Surveillance Intelligence System (ISIS)
        ISIS is a critical part of CBP's strategy to build smarter borders.
    By using remotely monitored night-day camera and sensing systems, the
    Border Patrol can better detect, monitor, and respond to illegal
    crossings. This, in turn, is critical to the Border Patrol's ability to
    increase its apprehension capabilities, particularly along our northern
    border. As a result, the deployment of ISIS is a critical component of
    the Border Patrol's revised National Strategy to prevent terrorists
    from entering the United States and to gain control of our nation's
    borders.
        ISIS consists of three independent components: (1) the remote video
    surveillance (RVS) camera system; (2) sensors; (3) the Integrated
    Computer Assisted Detection (ICAD) database. The RVS system integrates
    multiple color, thermal and infrared cameras, which are mounted on
    various structures, into a single remote controlled system. The network
    of sensors consists of seismic, magnetic and thermal devices used to
    detect and track intrusions. ICAD software components assist in the
    coordination and data collection of agent deployment in response to
    sensor alarms.
        The $64.1 million in ISIS funding sought in 2005 would enable CBP
    to broaden substantially its ISIS coverage of the northern and southern
    borders--to deploy the system where no ISIS coverage currently exists.
    This is important because Border Patrol experience has shown that in
    locations where ISIS is deployed, fewer agents can do a better job of
    securing the border. ISIS acts as an important force-multiplier that
    allows Border Patrol agents to remotely monitor the border and respond
    to specific illegal border crossings rather than having to exhaustively
    patrol an area adjacent to the border. By contrast, Border Patrol
    operations without ISIS support are not only less effective, they are
    more resource-intensive and less safe for Agents.

                Unmanned Aerial Vehicles (UAVs)
        Like ISIS, Unmanned Aerial Vehicles (UAVs) are both an important
    part of the smarter border strategy and an essential element of the
    Border Patrol's revised National Strategy. UAVs equipped with
    sophisticated on-board sensors have the potential to provide
    unparalleled surveillance capability. UAVs provide long-range
    surveillance. As a result, they are especially effective force-
    multipliers because they have the capacity to remain on station much
    longer than other airborne assets, and are particularly useful for
    monitoring remote land border areas where patrols cannot easily travel
    and infrastructure is difficult or impossible to build.
        UAVs will perform missions involving gathering intelligence on
    border activities was well as conducting surveillance over open water
    along the Gulf Coast, the Florida peninsula and the Great Lakes region
    on the northern border. The high endurance of the larger classes of
    UAVs permits uninterrupted overnight or around-the-clock coverage, and
    the size and operating altitudes can make UAVs effectively undetectable
    by unaided human senses. UAVs will also contribute to enforcement
    effectiveness and officer safety by providing communications links for
    coordinating multiple units on the ground is important in remote border
    operating areas.
        The $10 million in funding sought for UAVs will enable CBP to
    capitalize more fully on the UAV research that has taken place in a
    military context, and to apply UAVs in support of the Homeland Security
    mission. The funding would allow CBP to deploy and operate a system of
    unmanned aerial vehicles in support of the Border Patrol and other
    components of Customs and Border Protection. The use of UAVs will
    complement the other intrusion detection and intelligence gathering
    components of the border surveillance network to meet the mission of
    stopping the illegal entry of terrorists, smugglers and others into the
    United States.

                       AUTOMATION/INFORMATION TECHNOLOGY

        Mr. Chairman, no discussion of a successful strategy to protect the
    American people and the American economy in the 21st century would be
    complete without consideration of the central importance of automation
    and information technology to CBP's mission.
    Automated Commercial Environment
        The Automated Commercial Environment (ACE) is an important project
    for CBP, for the business community, for our country, and for the
    future of global trade. If done properly, it will reform the way we do
    business with the trade community. It will also greatly assist CBP in
    the advance collection of information for targeting high-risk cargo to
    better address the terrorist threat. And in doing so, it will help us
    expedite the vast majority of low-risk trade.
        The successful implementation of ACE has been and continues to be
    one of my top priorities as Commissioner. Increasing support from
    Congress and the Administration for ACE has been essential to the
    development of the new system. Funding of $319 million in fiscal year
    2004 has enabled us to continue development and begin to deliver on the
    first installment of ACE benefits to the trade community. Indeed, since
    my testimony last year, I can tell you that the development of ACE and
    the efforts to put its capabilities to work on America's borders have
    continued full throttle while CBP works with the Homeland Security
    Investment Review Group to analyze the existing IT systems being used
    by DHS agencies, identify redundant technology investments, and plan
    for the DHS's IT architecture. Among many other accomplishments, this
    past year brought ACE release to the public for the first time.
    Currently, 50 importer accounts and related CBP personnel have access
    to the ACE Secure Data Portal to conduct their CBP business
    transactions on-line. This portal provides reliable, secure, highspeed
    access to critical information. When fully deployed, this will be the
    basic tool by which all users within the trade community and government
    access ACE.
        I want to thank Congress again for its past support of ACE. The
    continued support of ACE with $322 million in funding for fiscal year
    2005 will enable us to keep pace with our schedule for ACE releases in
    2004 and 2005. Those include:
      --Summer 2004.--Release 3 (Account Revenue: Periodic Statements and
            Payments): Initial account revenue will be enabled, allowing
            accounts to centralize payment processing and utilize periodic
            statement and payment capabilities as well as ACH Credit and
            Debit.
      --Winter 2005.--Release 4 (Truck Manifest and e-Release): Cargo
            Processing will be introduced with the implementation of
            Automated Truck Manifest and Preferred & eRelease for trucks.
            This will allow for quicker entry for pre-filed and pre-
            approved cargo.
                International Trade Data System (ITDS)
        One important, fully integrated component of ACE is the
    International Trade Data System (ITDS). The ITDS initiative is an e-
    Government strategy being designed developed, and deployed jointly with
    ACE that will implement an integrated, government-wide system for the
    electronic collection, use, and dissemination of the international
    trade transaction data required by the various trade-related Federal
    agencies.
        ITDS will simplify and streamline the regulation, promotion, and
    analysis of international trade. It will also assist importers,
    exporters, carriers, and brokers in complying with Federal trade,
    transportation, and other regulations by streamlining business
    processes. ITDS is customer focused and will serve as the government's
    ``single window'' into international trade data collection and
    distribution.
        In conjunction with ACE, ITDS will also improve risk assessment. By
    centralizing and integrating the collection and analysis of
    information, ACE will enhance CBP's ability to target cargo, persons,
    and conveyances. The trade data will allow for advanced inter-agency
    assessment of risks and threats to determine which goods and people
    must be scrutinized. In addition, Through ACE, the ITDS will be capable
    of linking the government's law enforcement and other databases into
    one large-scale relational database that tracks all commerce crossing
    our borders. ITDS thus extends the functionality of ACE by bringing
    together critical security, public health, public safety, and
    environmental protection agencies under a common platform.
        The $5 million increase we are requesting in the fiscal year 2005
    budget for ITDS will allow us to ensure integration of ITDS with key
    Federal agencies, and keep us on schedule to have full functionality
    rolled out by winter 2006-2007.

                           OTHER TRADITIONAL MISSIONS

        Although CBP's priority mission is preventing terrorists and
    terrorist weapons from entering the United States, we know that we
    must--and will--accomplish that priority mission while continuing to
    perform our traditional missions well. Included among those missions
    are our responsibilities for interdicting drugs, apprehending 16
    individuals who enter the United States illegally, regulating and
    facilitating international trade, and protecting U.S. agricultural and
    economic interests from harmful pests and diseases.

                Drug Interdiction
        Our counterterrorism and counternarcotics missions are not mutually
    exclusive, and one does not necessarily come at the expense of the
    other. The initiatives we have put in place to prevent terrorists and
    terrorist weapons from entering the United States have enabled us to be
    more effective in seizing other illegal contraband, including illegal
    drugs. Indeed, one of the first results we saw after implementing ATS
    for commercial trucks on the land border was a large narcotics seizure
    from a targeted shipment. And, it is worth noting that the lessons we
    have learned in our battle against international drug trafficking will
    help us in the fight against international terrorism.
        It would be a grave mistake for drug traffickers and other
    criminals to misinterpret our focus on terrorism as a weakening of
    resolve on other fronts. If anything, we have made life even more
    miserable for drug smugglers as we have intensified our overall
    presence along America's borders. Our heightened state of security
    along America's borders has strengthened, not weakened, our
    counternarcotics mission. As we have added staffing for both inspectors
    at the ports of entry and Border Patrol Agents between the ports of
    entry, acquired more inspection technology, conducted more questioning
    of travelers, and carried out more inspections of passengers and goods
    in response to the terrorist threat, we have seized greater amounts of
    narcotics. In fiscal year 2003, for example, we seized more than 2.2
    million pounds of illegal drugs, and made some of the largest
    individual seizures ever recorded by officers safeguarding our borders.
        Effective coordination between inspectors at the ports of entry and
    agents who carry out investigative activities is essential to the
    success of our counternarcotics mission. For that reason, CBP will
    continue to cooperate closely with special agents from U.S. Immigration
    and Customs Enforcement to carry out this mission.
    Apprehending individuals entering illegally between the ports of entry
        The Office of the Border Patrol is specifically responsible for
    patrolling the 6,000 miles of Mexican and Canadian international land
    borders and 2,000 miles of coastal waters surrounding the Florida
    Peninsula and the island of Puerto Rico. Its primary task is securing
    America's borders between official ports of entry by preventing the
    illegal entry of people, goods, and contraband across our borders.
        The Border Patrol relies on agents, enforcement equipment (such as
    a fleet of specialized aircraft and vehicles of various types),
    technology (such as sensors and night vision cameras), tactical
    infrastructure (such as roads and vehicle barriers), and intelligence
    to carry out its mission. Applied in the correct combination, these
    resources can effectively deter, detect, monitor, and respond to
    illegal border crossings, as we have seen in locations such as the San
    Diego Sector and during operations such as Desert Safeguard.
        In fiscal year 2003, the Border Patrol played a key role in
    safeguarding the United States from the entry of terrorists, criminals,
    and illegal immigrants. Among the 931,557 people apprehended by the
    Border Patrol in fiscal year 2003 were:
      --Two Indian aliens illegally in the United States who were wanted in
            Canada for attempted murder after they allegedly tied-up,
            tortured, doused in gasoline, and lit a person on fire;
      --One of the ten most wanted criminals in Texas;
      --An Iranian citizen illegally in the United States with an extensive
            criminal history and who may have been involved in bomb making
            and other serious illegal activity at the time of his arrest at
            the San Clemente checkpoint;
      --A Turkish citizen illegally in the United States who may have been
            involved in serious illegal activity at the time of his arrest
            at McAllen International Airport; and
      --An alleged resident of the United Arab Emirates illegally in the
            United States who may have been involved in serious illegal
            activity at the time of his arrest in Louisiana.
        Building on these gains, and drawing on the lessons we learned
    during Desert Safeguard, CBP is working with other agencies and the
    Mexican Government to implement the Arizona Border Control Initiative
    this year. Under this initiative, CBP will substantially reduce the
    number of illegal entries that occur in Arizona this year and, as a
    result, will reduce the number of deaths that occur as aliens try to
    cross the Arizona desert during the warmest months of the year.
    Preventing individuals from entering illegally at the ports of entry
        With respect to preventing individuals from entering the country
    illegally at the ports of entry, CBP continues to stop hundreds of
    thousands of people a year who are inadmissible into the United States
    for a variety of reasons, including prior immigration violations,
    criminal history, or the possession of false or fraudulent documents.
        We are helped in this effort by our close work with the Department
    of State to ensure CBP inspectors have the tools they need to verify
    the identity of visa holders and the authenticity of visas issued by
    the Department of State. Data on holders of immigrant visas is
    transferred electronically to ports of entry. When the electronic
    record is updated to reflect an immigrant's admission at a port of
    entry, that data is transferred electronically to the Bureau of
    Citizenship and Immigration Services (CIS) for production of a
    permanent resident card and creation of the immigrant file.
        More importantly, with the successful implementation of US VISIT at
    our international airports earlier this year, CBP officers now have
    access to photographs and data transmitted electronically by the
    Department of State relating to holders of nonimmigrant visas. This
    permits officers on the primary line to review visa application data
    and verify the identity of the holder. This has virtually eliminated
    the possibility that a traveler could use a false or fraudulent visa to
    enter the United States.

    Regulating and facilitating international trade
        CBP maintains responsibility for regulating and facilitating
    legitimate international trade. As I mentioned earlier, many of the
    initiatives CBP implements serve the twin goals of increasing security
    and facilitating trade. With the right level of industry partnership
    and the right combination of resources, we can succeed not only in
    protecting legitimate trade from being used by terrorists, we can
    actually build a better, faster, more productive system of trade
    facilitation for the U.S. economy.
        We have continued to work with the trade on these matters over the
    past year, and we will continue to do so in the year ahead. For
    example, we worked with all segments of the maritime trade to make
    changes to the 24-hour rule and our computer systems to better
    facilitate the movement of sea containers in our domestic seaports and
    to inland destinations. We also worked very closely with the trade to
    craft and implement our Trade Act regulations, and we will continue
    this process during the rest of this year. Finally, we have partnered
    with the trade and technology companies to design and test a smarter,
    more secure sea container. More importantly, members of the trade are
    using this container. Through C-TPAT, we have partnered with several
    large importers to begin using these containers, and we expect to see
    their use rise substantially in the months ahead.

    Protecting U.S. agricultural and economic interests and the food supply
        CBP now overseas the enforcement of the laws and regulations
    pertaining to the safe importation and entry of agricultural food
    commodities into the United States. The traditional goals of the
    Agriculture Inspections (AI) program have been to reduce the risk of
    introduction of invasive species into the United States, protect U.S.
    agricultural resources, maintain the marketability of agricultural
    products, and facilitate the movement of lawabiding people and
    commodities across the borders. Accordingly, inspecting potentially
    high-risk travelers and cargo is critical to keeping the prohibited
    items out of the United States, monitoring for significant agricultural
    health threats, encouraging compliance with regulations, and educating
    the public and importers about agricultural quarantine regulations.
        With the creation of CBP, the AI program has expanded its focus to
    include a new priority mission of preventing potential terrorist
    threats involving agriculture. Indeed, the threat of intentional
    introductions of pests or pathogens as a means of biological warfare or
    terrorism is an emerging concern. To address this threat and to enhance
    its traditional AI missions, CBP has already begun using the Automated
    Targeting System, and its collective expertise regarding terrorism and
    agriculture, to strengthen our ability to identify shipments that may
    pose a potential risk to our agricultural interests.
        In addition, CBP has worked closely with the Food and Drug
    Administration (FDA) to implement the Public Health Security and
    Bioterrorism Preparedness and Response Act of 2002 to guard against
    threats to the food supply. In the last several months, we have
    modified our electronic data collection systems to collect data from
    the trade required under the Bioterrorism Act, implemented a joint
    risk-management system for food shipments with FDA that builds off or
    Automated Targeting System, and commissioned CBP officers to utilize
    FDA authorities in certain circumstances at the ports of entry. These
    efforts have built on our priority and traditional missions to make the
    food supply more secure, and will be supported in part by the targeting
    funding sought in the fiscal year 2005 budget.

                                   CONCLUSION

        Mr. Chairman, Members of the Subcommittee, I have outlined a broad
    array of initiatives today that, with your assistance, will help CBP
    continue to protect America from the terrorist threat while fulfilling
    our other traditional missions. Because of your support, and because of
    the creation of DHS and CBP, we are far safer today than we were on
    September 11th. But our work is not complete. With the continued
    support of the President, DHS, and the Congress, CBP will succeed in
    meeting the challenges posed by the ongoing terrorist threat and the
    need to facilitate ever-increasing numbers of legitimate shipments and
    travelers.
        Thank you again for this opportunity to testify. I would be happy
    to answer any of your questions.

        Senator Cochran. Thank you, Mr. Bonner.
        Mr. Garcia, you may proceed.

                         STATEMENT OF MICHAEL J. GARCIA

        Mr. Garcia. Thank you, Mr. Chairman. Good morning. Good
    morning, Senator Byrd, distinguished members of the
    subcommittee. It is a pleasure to be with you today to discuss
    the President's fiscal year 2005 budget request for the
    Department of Homeland Security's U.S. Immigration and Customs
    Enforcement. The request of just over $4 billion reflects the
    vital role ICE plays in the Department's overall mission of
    ensuring the security of the American people.
        A little more than 1 year ago, ICE was formed by combining
    the investigative and intelligence arms of the former INS and
    the U.S. Customs Service, including Air and Marine operations,
    as well as the Federal Protective Service and more recently the
    Federal Air Marshal Service. By integrating these once-
    fragmented resources, the Department of Homeland Security not
    only created the second largest investigative agency in the
    Federal Government, but it also created a dynamic and
    innovative new law enforcement organization focused on homeland
    security, specifically border security, air security, and
    economic security.
        Senator Byrd mentioned that we are looking at the
    vulnerabilities facing this. And the primary mission of ICE and
    the Department of Homeland Security is to detect and address
    those vulnerabilities in our national security, whether those
    vulnerabilities expose our financial systems to exploitation or
    our borders to infiltration.

                      ACCOMPLISHMENTS WITHIN THE PAST YEAR

        Earlier this month, the dedicated men and women of ICE
    joined me in celebrating our 1-year anniversary and our many
    accomplishments within the past year. I will highlight only a
    few.
        ICE is protecting U.S. economic security. And since last
    March, ICE financial investigations have yielded more than
    1,300 arrests and seized more than $150 million in assets.
        In July, ICE launched Cornerstone, a comprehensive
    initiative that forms a new partnership with the financial,
    commercial, and trade sectors to identify and mitigate U.S.
    economic vulnerabilities.
        Last fall, ICE launched Ice Storm, a comprehensive
    initiative to combat violent human smuggling organizations
    along the southwest border, with particular focus on Arizona.
    Ice Storm has resulted in more than 2,000 administrative and
    criminal arrests, 170 indictments, and the seizure of more than
    80 weapons and $2 million. Local police credit Ice Storm with
    the more than 30-percent drop in homicides in the Phoenix area
    in the last quarter of 2003 compared to the same period of a
    year ago.

                               OPERATION PREDATOR

        Senator Shelby mentioned Operation Predator. That is an
    operation we launched last July with the secretary. We targeted
    child sex predators worldwide under this operation, which fuses
    the authorities and resources of virtually every ICE component
    into a comprehensive campaign against child sex predators. To
    date, Operation Predator has produced unprecedented results
    with the arrest of more than 2,000 child sex predators
    nationwide.

                          FEDERAL AIR MARSHALS SERVICE

        The ICE Federal Air Marshals Service became a distinct ICE
    division in November of 2003. ICE agents are being cross-
    trained as Federal air marshals, giving ICE FAMS a cadre of
    trained agents for use when needed. Since September 11, ICE
    FAMS have provided security on hundreds of thousands of
    flights, protected millions of passengers, flown millions of
    miles. Their efforts have helped keep the U.S. civil aviation
    sector free of terrorism since September 11, 2001.

                        FISCAL YEAR 2005 BUDGET REQUEST

        The President's fiscal year 2005 budget will continue to
    strengthen ICE's efforts to protect the homeland through the
    unique investigative and enforcement tools of this agency. The
    proposed 2005 budget and plan to enhance the department's
    commitment to securing the homeland is designed to build upon
    the strong foundation I have just described. The President's
    2005 budget request seeks over $4 billion for ICE, $320 million
    more than 2004, an increase of 8 percent.
        The requested increases include $186 million for ICE to
    fund improvements in immigration enforcement both domestically
    and overseas, including the more than doubling of current
    worksite enforcement efforts, increased resources to combat
    benefits fraud and investigate violations of the SEVIS and US
    VISIT systems, and approximately $100 million increase for the
    detention and removal of illegal aliens. Detention or removal
    illegal aliens present in the United States is critical to the
    enforcement of our immigration laws. And the requested funding
    will expand ongoing fugitive apprehension efforts, the removal
    from the United States of jailed illegal aliens, and additional
    detention and removal capacity.
        Critical to the removal process is ICE's ability to
    effectively litigate cases before the immigration court. The
    budget includes our request for $6 million enhancement to
    provide additional attorneys to keep pace with an increasing
    caseload. Our budget also seeks $14 million to support our
    international enforcement efforts related to immigration,
    including enabling ICE to provide visa security by working
    cooperatively with U.S. consular offices to review these
    applications.
        The budget request also seeks $40 million in total
    enhancement for Air and Marine operations, for long-range
    radar, and increased P-3 flight hours.

                 RECONCILIATION OF THE FISCAL YEAR 2004 BUDGET

        Many challenges lie ahead, including reconciliation of the
    2004 budget, as was mentioned earlier today, and the mapping
    issues that go with that. These are serious issues, and this is
    a serious undertaking. I very much appreciate the support of
    the subcommittee members. It is a great responsibility. We are
    committed to protecting the homeland with new approaches to old
    problems and new approaches to the new challenges we face after
    September 11.

                               PREPARED STATEMENT

        We are committed to managing the transition, as
    Commissioner Bonner mentioned, of the INS distribution of
    assets, as well as the Customs breakup. This is a very complex
    reorganization. And in it we are also committed to being
    fiscally responsible.
        I look forward to working with you, Mr. Chairman and
    members of this subcommittee. This concludes my prepared
    statement. I would be happy to answer any questions you might
    have at this time.
        Senator Cochran. Thank you, Mr. Garcia.
        [The statement follows:]

                    Prepared Statement of Michael J. Garcia

    Introduction
        Good morning Chairman Cochran, Senator Byrd, and distinguished
    Members of the Subcommittee. It is a pleasure to be with you today to
    discuss the President's fiscal year 2005 budget request for the
    Department of Homeland Security's (DHS) U.S. Immigration and Customs
    Enforcement (ICE). This $4.011 billion request reflects the vital role
    ICE plays in the Department's overall mission of ensuring the security
    of the American people and our way of life.
        A little more than one year ago ICE was formed by combining the
    investigative and intelligence arms of the former Immigration and
    Naturalization Service (INS) and the U.S. Customs Service, including
    Air and Marine Operations, as well as the Federal Protective Service
    and the Federal Air Marshal Service. By integrating these once
    fragmented resources, the Department of Homeland Security not only
    created the second largest investigative agency in the Federal
    government, but it also created a dynamic and innovative new law
    enforcement organization uniquely and exclusively focused on homeland
    security--specifically border security, air security, and economic
    security.
        The primary mission of ICE and the Department of Homeland Security
    is to detect and address vulnerabilities in our national security--
    whether those vulnerabilities expose our financial systems to
    exploitation or our borders to infiltration. With its enhanced ability
    to investigate immigration and customs violation--for example our
    ability to target human smuggling alongside of narcotics, weapons, and
    other forms of smuggling and follow the illicit money trail wherever it
    may lead--ICE is in a unique position to enforce our homeland security
    missions in ways never before possible.
        Earlier this month the dedicated men and women of ICE joined me in
    celebration of our one-year anniversary and our many accomplishments
    within the past year. This, of course, could not have been accomplished
    without the support of Congress and the fiscal year 2004
    Appropriations. Our accomplishments this year are many but I will only
    highlight a few:
        Targeting Child Sex Predators Worldwide.--Operation Predator fuses
    the authorities and resources of virtually every ICE component into a
    comprehensive campaign against child sex offenders. To date, Operation
    Predator has produced unprecedented results with the arrest of more
    than 2,057 child sex predators nationwide.
        Protecting U.S. Economic Security.--Since last March, ICE financial
    investigations have yielded more than 1,330 arrests and seized $154
    million in assets. In July, ICE launched Cornerstone, a comprehensive
    initiative that forms a new partnership with the financial, commercial
    and trade sectors to identify and mitigate U.S. economic
    vulnerabilities.
        Tracking down Arms, Money, and Artifacts in Iraq.--ICE deployed the
    first-ever civilian team of agents to Iraq in support of Operation
    Iraqi Freedom. The agents secured 75 silkworm missiles in Iraq that
    could have been used against coalition forces. They recovered $32
    million in cash withdrawn by Saddam Hussein's son just before the war
    and recovered 39,400 manuscripts and more than 1,000 treasures looted
    from the Iraqi National Museum.
        Dismantling Violent Human Smuggling Organizations.--Last fall, we
    launched ICE Storm, a comprehensive initiative to combat violent human
    smuggling organizations along the Southwest border--with a particular
    focus on Arizona. In its first 180 days, ICE Storm resulted in more
    than 700 criminal and administrative arrests, 90 indictments and the
    seizure of 46 assault weapons and nearly $2 million. Local police
    credited ICE Storm with a more than 30 percent drop in homicides in the
    Phoenix area in the last quarter of 2003, compared to the same period
    the previous year.
        Enhancing Civil Aviation Security.--The ICE Federal Air Marshal
    Service (FAMS) became a distinct ICE division in November 2003. ICE
    agents are being crosstrained as air marshals, giving ICE FAMS a cadre
    of trained agents in times of need. ICE also signed an agreement with
    the U.S. Secret Service that increases flight coverage. Since 9/11, ICE
    FAMS have provided security on hundreds of thousands of flights,
    protected millions of passengers and flown millions of miles. Their
    efforts have helped keep the U.S. civil aviation sector free of
    terrorism since 9/11.
        Apprehending and Removing Criminal Aliens from the United States.--
    Since March 1, 2003, ICE's Detention and Removal Office (DRO) has
    removed more than 52,684 criminal aliens and 40,802 non-criminal
    aliens. DRO detains more than 230,000 aliens each year. ICE's DRO has
    more than 18 fugitive absconder teams across the Nation and created a
    ``Most Wanted'' list of the most dangerous criminal aliens. In the
    first 2 weeks, ICE captured or confirmed the removal of all 10 of the
    original 10 ``Most Wanted.''
        Improving Security at U.S. Federal Facilities.--The transfer of the
    Federal Protective Service to ICE has provided FPS with access to
    information never before at its disposal, enabling it to perform its
    mission more effectively. ICE FPS secures more than 8,800 federally
    owned and leased facilities. In fiscal year 2003, ICE FPS seized or
    stopped the entry of more than 108,800 weapons and other items. During
    the same period, ICE FPS officers made more than 2,800 arrests and
    covered more than 2,100 demonstrations.
        Securing Critical Airspace in the U.S., While Protecting Land and
    Sea Borders.--ICE's Air and Marine Operations (AMO) division has
    dramatically increased its role in homeland security missions while
    maintaining its traditional drug interdiction and law enforcement
    efforts. AMO created a permanent National Capital Region branch that
    provides 24/7 airspace security coverage over the Washington, DC area.
    AMO provided airspace security coverage during ``Orange Alert'' threats
    and events like the State of the Union address and Super Bowl. All the
    while, AMO assets were involved in drug and alien smuggling operations
    that seized more than 76,000 pounds of cocaine, 335,000 pounds of
    marijuana, and arrested more than 980 individuals.
        Harnessing Intelligence to Further Enforcement Efforts.--ICE's
    Intelligence Division integrated the intelligence components of the
    former Immigration and Naturalization Service and the U.S. Customs
    Service into a robust force that supports the enforcement needs of all
    ICE operational divisions. ICE Intelligence vetted roughly 60,000
    commercial airline passengers and crewmembers through a multi-stage
    process during the ``Orange Alert'' terror threat level during December
    2003 and January 2004 period.
        ICE continues to pursue its homeland security mission by building
    upon the traditional missions, resources, authorities and expertise of
    the legacy agencies it inherited. ICE is bringing new approaches to
    traditional areas of law enforcement and creating enforcement programs
    in response to its homeland security mission. The President's fiscal
    year 2005 Budget will continue to strengthen ICE's efforts to protect
    the homeland through its unique investigative and enforcement tools.
    Budget Request for fiscal year 2005
        The proposed fiscal year 2005 budget--a plan to enhance the
    Department's commitment to securing the homeland--is designed to build
    upon the strong foundation I have described. The President's fiscal
    year 2005 Budget request seeks $4.011 billion for ICE, $302 million
    more than fiscal year 2004, which represents an increase of 8 percent.
    This request for ICE includes resources to support border, air and
    economic security activities. These funds will also reduce
    infrastructure vulnerability, promoting safe and secure Federal
    properties for both employees and visitors. The remaining budget
    discussion will cover the major program areas: Investigations,
    Detention and Removal Operations, Air and Marine Operations, Federal
    Protective Service and the Federal Air Marshal Service, as well as our
    requested fiscal year 2005 budget enhancements.
        The Office of Investigations.--Budget request includes $1.046
    billion for the investigations and intelligence programs. These
    resources will advance national security and homeland defense against
    terrorist cells and their supporters in the United States through
    enhanced cooperation and integration with other Federal law enforcement
    agencies and the intelligence community. The Investigations program
    protects our homeland by, among other things, dismantling terrorist
    financing networks, by identifying and remediating vulnerabilities in
    the financial system that could be exploited by terrorist
    organizations, preventing the importation of weapons of mass
    destruction and other instruments of terror into the United States,
    disrupting narcotics smuggling and money laundering organizations,
    enforcing embargoes, trade agreements, and sanctions imposed by the
    U.S. government against foreign countries, and safeguarding children
    against exploitation through crimes involving pornography, sex tourism,
    and forced child labor.
        The President's fiscal year 2005 Budget request seeks $78 million
    in total enhancements for the Investigations Program. This includes:
      --$23 million/200 FTE for Worksite Enforcement. Consistent with the
            goals of the President's proposed new temporary worker program
            to match willing foreign working workers with willing U.S.
            employers, enforcement of immigration laws against companies
            that break the law and hire illegal workers will increase. This
            increase will more than double the level of resources devoted
            to traditional worksite enforcement.
      --$16 million/65 FTE for Compliance Teams. As part of its overall
            immigration enforcement strategy, ICE will continue to analyze
            data generated through the Student and Exchange Visitor
            Information System and US VISIT program in an effort to detect
            individuals who are in violation of the Nation's immigration
            laws. This enhancement will increase funding for ICE's SEVIS
            and US VISIT compliance efforts by over 150 percent.
      --$14 million/90 FTE for International Affairs. Pursuant to Section
            428 of the Homeland Security Act of 2002 and the Memorandum of
            Understanding between the Departments of Homeland Security and
            State, ICE's fiscal year 2005 budget includes an increase of
            $10 million to support a new Visa Security Unit (VSU). The VSU
            and DHS staff stationed at overseas posts, including Saudi
            Arabia, will work cooperatively with U.S. Consular Officials to
            promote homeland security in the Visa process. In addition, an
            increase of $4 million is requested to replace funding
            previously provided through the Immigration Examinations Fee
            Account.
      --$25 million to support Benefit Fraud. Immigration fraud poses a
            threat to national security and public safety because it
            enables terrorists, criminals, and illegal aliens to gain entry
            and remain in the United States and diverts resources and
            benefits from legitimate claimants. In cooperation with the
            U.S. Citizenship and Immigration Service (USCIS), ICE's goal is
            to detect, combat, and deter immigration fraud through
            aggressive, focused, and comprehensive investigations. This
            enhancement will provide stable funding to ICE's benefits fraud
            program by replacing funding previously provided through the
            Immigration Examinations Fee Account.
        The President's fiscal year 2005 budget requests $1.209 billion for
    detention and removal activities, which represents an increase of $125
    million from fiscal year 2004. Although this is an increase for the
    detention and removal program, we project a decrease in revenue
    collected in the Breached Bond/Detention Fund. Consistent with ICE's
    10-year Detention and Removal Strategic Plan, these resources will be
    used to enhance public safety and national security by ensuring the
    departure from the United States of removable aliens.
        The funding will also help ICE meet its detention needs. Since
    1994, the average daily population of detainees has grown to more than
    20,000, from less than 6,000. This rapid growth was a result of
    expanded enforcement capabilities and changes in detention requirements
    resulting from the Illegal Immigration Reform and Immigrant
    Responsibility Act of 1996. The fiscal year 2005 budget request will
    support the use of state and local detention facilities, the eight
    Service Processing Centers, the seven contract detention facilities,
    and joint DHS/Bureau of Prison facilities to detain those aliens
    subject to removal.
        Our overall objective, however, is the removal of aliens unlawfully
    present in the United States, not their detention. In fiscal year 2003,
    ICE removed more than 140,000 individuals including 76,000 criminal
    aliens.
        ICE is also committed to aggressively tracking, apprehending, and
    removing fugitive aliens, those who have violated U.S. immigration law,
    been ordered deported by an immigration judge, then fled before the
    order could be carried out. This budget request will allow ICE to
    continue its efforts to fulfill that commitment through the Fugitive
    Operations Initiative.
        The President's fiscal year 2005 Budget request seeks $108.2
    million in total enhancements for the Detention and Removals Program.
    This includes:
      --$30 million/140 FTE for the Institutional Removal Program (IRP).
            The IRP is designed to ensure that aliens convicted of crimes
            in the United States are identified, processed, and, where
            possible, removed prior to their release from a correctional
            institution. This enhancement will further ICE's plans to
            expand the program nationally to all Federal, State, and local
            institutions that house criminal aliens, while ensuring more
            efficient processing and case management.
      --$50 million/118 FTE for Fugitive Operations. The resources
            requested are to continue the implementation of the National
            Fugitive Operations Program (NFOP), established in 2002, which
            seeks to eliminate the existing backlog and growth of the
            fugitive alien population over the next six years.
      --$11 million/30 FTE for Alternatives to Detention. This initiative
            provides the resources to establish additional non-traditional
            family and female detention settings and establish community
            supervision operations. This will provide effective supervision
            of persons released into the community during immigration
            proceedings or while awaiting removal in certain circumstances
            while reducing costs and ensuring compliance.
      --$5 million/14 FTE for detention bed space. An increase in bed space
            to accommodate the higher volume of apprehended criminal
            aliens. With this additional funding, ICE will enhance its
            ability to remove illegal alien--particularly those convicted
            of crimes while in the United States.
      --$6.2 million for Caribbean Region Interdiction. Pursuant to
            Executive Order, the Department of Defense, Homeland Security
            and State share responsibility for responding to the migration
            of undocumented aliens in this region. The resources requested
            will support the Department's share of the cost of housing
            migrants as they await determination of any immigration claims.
      --$6 million/40 FTE for the Legal Program Backlog Elimination. During
            fiscal year 2001 and fiscal year 2002, the Legal Program saw an
            average increase of 19,200 cases in the backlog of matters in
            Immigration Court. To keep pace with the increased number of
            cases, additional attorneys and support staff are required.
            This enhancement will provide a funding increase of more than
            20 percent to ICE's backlog elimination program.
        The fiscal year 2005 President's budget also seeks $373 million in
    Air and Marine Operations (AMO) appropriations. AMO maintains a fleet
    of 133 aircraft and 82 vessels to protect the Nation and the American
    people against the terrorist threat and the smuggling of narcotics and
    other contraband. Aircraft are also used in support of ICE's combined
    investigation work.
        An essential element of these deployments is the work carried out
    by the Air and Marine Operation Center (AMOC), located in Riverside,
    California. This state-of-the-art center is linked to a wide array of
    civilian and military radar sites, aerostats, airborne reconnaissance
    aircraft and other detection assets, which provide 24-hour, seamless
    radar surveillance throughout the continental United States, Puerto
    Rico, the Caribbean, and beyond. AMOC allows ICE to identify, track,
    and support the interdiction and apprehension of those who attempt to
    enter U.S. airspace with illegal drugs or terrorist objectives.
        The President's fiscal year 2005 Budget request seeks $40.5 million
    in total enhancements for Air and Marine Operations. This includes:
      --$28 million for Increased P-3 Flight Hours. P-3 aircraft are
            critical to interdiction operations in the source and transit
            zones as they provide vital radar coverage in regions where
            mountainous terrain, expansive jungles and large bodies of
            water limit the effectiveness of ground-based radar. This
            request will increase P-3 flight hours from 200 to 600 per
            month.
      --$12.5 million for Long Range Radar. Primary Long Range Radar
            provides position information (geographic/altitude) of airborne
            objects and flight data information to civil aviation, defense,
            and law enforcement agencies. ICE uses the radar to receive
            data for drug interdiction efforts along the southern border.
        The fiscal year 2005 budget request includes $478 million in
    reimbursable authority for the activities of the Federal Protective
    Service (FPS). The FPS provides for the security and related law-
    enforcement functions at more than 8,800 Federal facilities/buildings
    across the Nation. These funds will support several initiatives
    designed to protect Federal facilities from terrorist attacks,
    including a nationwide K-9 bomb detection program and another aimed at
    improving our capability to respond to weapons of mass destruction. FPS
    will also be able to improve its communication capabilities and enhance
    its intelligence sharing processes.
        The fiscal year 2005 budget request includes $613 million in
    Federal Air Marshals Service appropriations.\1\  The FAMS transferred
    from the Transportation Security Administration (TSA) to ICE in
    November 2003. This movement of the FAMS to ICE will significantly
    increase the number of Federal law enforcement agents to deploy during
    times of increased threats to aircraft ultimately providing a surge
    capacity during increased threat periods or in the event of terrorist
    attack. To date, 176 ICE agents have gone through FAMS training and we
    anticipate training up to 800 by the end of the fiscal year. This
    cross-training creates a ``surge capacity'' to effectively deal with
    specific threats related to aviation security. And, on February 25,
    2004, ICE and the U.S. Secret Service entered into an agreement that
    will bolster U.S. aviation security by providing a ``force multiplier''
    to ICE's FAMS. Under the terms of the agreement, the Secret Service
    will provide the ICE FAMS with travel information for armed personnel
    traveling on U.S. commercial flights during their normal course of
    business and will enable the ICE FAMS the flexibility to deploy their
    Federal Air Marshals to a wider range of flights, while providing
    greater flexibility to conduct FAMS missions at maximum levels based on
    its concept of operations.
    ---------------------------------------------------------------------------
        \1\ The President's Budget reflects a transfer of $10 million from
    the Federal Air Marshals Service (FAMS) program to Science and
    Technology (S&T) for research and development. This consolidation of
    research and development funding in S&T will provide for greater
    oversight of research and development activities in the Department and
    enhance service to FAMS. This funding will be devoted to FAMS air-to-
    ground Communications project.
    ---------------------------------------------------------------------------
    Conclusion
        The fiscal year 2005 budget request for the ICE supports the
    President's National Strategy for Homeland Security, the framework for
    accomplishing our complex mission to protect the homeland, and ICE's
    mission to enforce immigration and customs law, locate and remove
    aliens unlawfully present in the United States, protect jobs for those
    who are legally eligible to work, maintain a nationwide anti-smuggling
    program, enforce laws against money-laundering and child pornography,
    and protect Federal property and air security.
        While many challenges lie ahead, we continue to build and foster a
    premier law enforcement agency from the powerful tools and authorities
    we have been given. The men and women of ICE stand ready to continue to
    build a successful organization for the present and future. The fiscal
    year 2005 budget request provides the resources to enable ICE to manage
    its responsibilities and continue its work to secure the homeland to
    protect and serve the American people.
        I look forward to continuing to work with you to accomplish these
    objectives while continuing to manage a world class law enforcement
    organization to protect this Nation against anyone who would do it
    harm. We are committed to preventing terrorist attacks and reducing
    systemic vulnerabilities that threaten the security of the country.
        Mr. Chairman and Members of the Subcommittee, this concludes my
    prepared statement. I would be happy to answer any questions you may
    have at this time.

                              SHORTFALL IN FUNDING

        Senator Cochran. I hope that during the first round of
    questions we will be able to limit our time to 5 minutes each.
    And that will give us all an opportunity to ask a second round
    of questions, if that is the wish and pleasure of the senators
    on the subcommittee.
        Let me start by bringing up this issue of the shortfall in
    funding. In the Congressional Quarterly yesterday, Monday,
    March 29, there is an article that discusses this and carries
    some quotations from administration officials, a spokesman from
    the Border and Transportation Security Directorate, which
    suggested that there is not an actual shortfall in the funding.
    And the official, Dennis Murphy, is quoted as saying, ``We're
    projecting that the spending rate may need to be slowed down.
    And we just need to take the foot off the accelerator a bit.''
        My question is: Is that an appropriate assessment in the
    judgment of this panel? I notice that it may be that not all of
    your agencies are affected by this. But I think Mr. Bonner's
    and Mr. Garcia's are.
        Mr. Bonner, what is your reaction to that?
        Mr. Bonner. First of all, I do not want to parse words
    here, but, I mean, there is not an actual shortfall, but there
    is a potential shortfall. Let me just say from the----
        Senator Cochran. Press the button on your mike.
        Mr. Bonner. Maybe it is just not close enough, Senator. Is
    that better?
        Senator Cochran. Yes.
        Mr. Bonner. Okay. I was just saying that without trying to
    parse words too carefully here, I think it is more appropriate
    to characterize this as a potential shortfall, not an actual
    shortfall. And the reason I say that is, I am going to speak
    just from the perspective of Customs and Border Protection
    here. And that is that as part of what I do as a manager of the
    agency every year is to, at the end of the first quarter, I
    take stock, I get a report from my budget office as to where we
    stand. And I was concerned after the end of the first quarter
    review that with the rate of spending as to whether or not we
    were going to be within budget at the end of the year and not
    be deficient.
        And secondly, the possible impact of the reconciliation of
    budget allocations between, potentially between, CBP and ICE,
    which is something, by the way, I believe that will be
    completed by the Department in the next several weeks. But I
    was concerned about that. And as a prudent manager of Customs
    and Border Protection, I directed that we curtail
    nonoperational travel, that we curtail nonoperational overtime,
    not overtime that is related to mission performance here. And I
    also believe that we should have a temporary suspension of
    hiring, except for Border Patrol agents at Customs and Border
    Protection, so we could get a clear picture of our spending
    rate and our budget.
        And when I say temporary, I mean temporary. And that is
    that we would suspend--and we are just starting this. It would
    be a short suspension that could literally be several weeks.
    And then I would be hopeful that we would be able to resume
    hiring. I do not know. I mean, this will depend upon what our
    budget picture looks like when we take stock in 3 or 4 weeks.
        But on the positive side, I do want to tell this
    Subcommittee that we did move out at the beginning of the year
    aggressively in terms of hiring new employees at Customs and
    Border Protection. And we have already hired, so any suspension
    here does not affect what we have already hired. We have
    already hired 2,700 employees. And these include 1,500
    Inspectors, CBP Inspectors, 800 Border Patrol agents, and some
    other personnel.
        And we are also looking very closely at the attrition rate
    here in terms of--right now, that looks pretty encouraging in
    terms of both the Border Patrol agents and CBP Inspectors. The
    attrition rates right now, if this holds up, are lower than
    projected. They are as low, by the way, this year as 5.5
    percent right now for Border Patrol agents. And I think some of
    you know that the attrition at the Border Patrol was close to
    20 percent just 2 years ago, when it was part of the INS.
        So again, all that we are doing here is we are looking at
    this very, very closely. And we are making some temporary
    adjustments. And we will then have to make some decisions as to
    whether or not we can resume hiring or whether we have to
    suspend it further. But that would be my overall assessment,
    Mr. Chairman.

                                  ICE RESPONSE

        Senator Cochran. Thank you.
        Mr. Garcia, what about the Bureau of Immigration and
    Customs Enforcement that you are responsible for? What is the
    effect of this on your agency?
        Mr. Garcia. Yes, Mr. Chairman. A similar effect to what
    Commissioner Bonner was describing. We have imposed a temporary
    hiring freeze. There is no category within ICE that is exempt
    from that at the moment. We have been hiring up to the point of
    the end of the first quarter and imposed this, again looking
    down the road, looking at the spending rate.
        But from the perspective of my agency, we are very much
    concerned with mapping issues, distribution issues,
    particularly in the IT context, services being provided, and
    mapping funding to the provision of those services are very
    complicated issues, if you look at the size of the legacy
    agencies that were involved, the services that were provided,
    and the split that we have accomplished very successfully. You
    can appreciate the complexity of those issues.
        We are very much watching that process, optimistic that we
    will, working together, have firmer numbers within the next
    several weeks, that we can then reassess, as Commissioner
    Bonner said, again look at spending rates, look at the harder
    numbers, and see what are the steps that we need to take to be
    fiscally responsible, which may not, and we all hope will not,
    include a hiring freeze.

               POSTPONING OR DEFERRING OF ANY PROGRAM INITIATIVES

        Senator Cochran. Have either one of you had to postpone or
    defer any program initiatives, any activities that would defer
    initiatives that you had already planned or put in place? Have
    you postponed doing anything that you intended to do?
        Mr. Bonner. We have not at CBP. And I hope we do not have
    to. But we have not at this point.
        Senator Cochran. Mr. Garcia, what about you?
        Mr. Garcia. None of the new programs or operations. We have
    not gone forward with the 2004 enhancements as of yet.

                               IMMIGRATION SYSTEM

        Senator Cochran. Thank you.
        Senator Byrd. Our immigration system is underfunded and
    understaffed. The Bureau of Immigration and Customs Enforcement
    has just over 13,000 criminal investigators to locate and
    remove 8 million to 11 million illegal aliens. This is one
    among many responsibilities. Following the passage of the 1986
    amnesty for 2.7 million illegal aliens, the INS had to open
    temporary offices, hire new workers, and divert resources from
    enforcement areas in order to process amnesty applicants. The
    result was chaos that produced rampant fraud.
        The backlog of immigrant applications is larger today, 6
    million and rising. The President's amnesty proposal would dump
    another 8 million immigrant applications onto an already
    beleaguered immigration system. It took only 19 temporary visa
    holders to slip through the system to unleash the horror of the
    September 11 attacks. The President's amnesty would shove 8
    million illegal aliens through our security system, many of
    whom have never gone through any background check.
        If there are no new resources in the budget to implement
    the President's amnesty proposal, implementation of the reform
    proposal would create incredible stresses on an already
    stressed border security system. It is a recipe for disaster.

                       FUNDING FOR ENFORCEMENT ACTIVITIES

        While I note that your budget has several modest proposals
    to deal with the existing enforcement shortcomings, would you
    inform the subcommittee how much additional money is included
    in the President's budget to implement your enforcement
    activities in support of the President's amnesty proposal?
        This question is for Mr. Garcia.
        Mr. Garcia. Thank you, Senator Byrd. As a starting point,
    looking at the 2005 enhancements, we do have $23 million for
    worksite enforcement related to the possibility of a temporary
    worker program. But I think there is a much more complex
    approach to whatever legislation, if any, is ultimately passed,
    which would be, one, we have split the INS apart and now have a
    mission focus on enforcement both at the border and in the
    interior, and a separate services bureau focused on providing
    that service.
        We have made tremendous strides in that reorganization,
    focusing a very powerful enforcement tool on the enforcement
    mission within ICE and within CBP. We have reorganized within
    ICE. We have moved, are in the process of moving, excuse me,
    the Institutional Removal Program out of investigations and
    into Detention and Removal, which will free up additional
    investigative resources within that division.
        All of these pieces moving forward look at how do we place
    integrity within our immigration system? How do we enforce visa
    security, US VISIT, our compliance enforcement operation, which
    we have again asked for an enhancement for in 2005. This is a
    complex, comprehensive approach to the shortcomings that you
    have described, Senator. So I cannot point to you one place in
    our budget where we would address any proposed legislation or
    where we would address specific shortcomings of the past. We
    are taking a comprehensive approach to those problems.
        I would also add that we are very much alert to the
    possibility of fraud within the immigration system. I have
    taken steps to address that already. And we will very much look
    to participate in the process of crafting legislation that can
    ensure that whatever benefits or whatever program is designed
    gets to the people it was intended to get to.
        I was a prosecutor in the Nineties. I prosecuted cases
    involving benefits fraud in some very unfortunate context. I
    know the risks firsthand. And I would very much feel the
    responsibility to participate in that process, to look at how
    that program is crafted and what steps we can build into it to
    make it less susceptible to fraud.
        Mr. Aguirre. Senator, may I tag along to that, if I could?
        Senator Byrd. Please.

                                    BACKLOG

        Mr. Aguirre. Just a couple of comments. One, the backlog,
    Senator, is not 6 million. We have 6 million pending cases. But
    of those, 3.6 are backlog. In other words, they are behind our
    normal processing time. Now, that is plenty, but it is not 6
    million.

                            TEMPORARY WORKER PROGRAM

        You mentioned the President's proposal as an amnesty. I do
    not consider it so. In fact, I think it is not an amnesty. I
    think it is a temporary worker program that would identify
    these 8 million individuals and would put them within a legal
    program where we would be allowed to do background checks.
    Indeed, these individuals are not within our radar scope today,
    but would be once they apply.
        And there is mention about the fact that there is no
    provision in our Bureau for the President's proposal. Of
    course, there is not, because we are waiting for the Congress
    to flesh out, if you will, the details of the proposed
    legislation so that we can then put a fee that would be matched
    against the cost of processing these applicants. So in other
    words, once the Congress acts, and we certainly hope the action
    will come forth, we will match whatever work is required behind
    that legislation to charge the applicants for the cost of
    processing that application.
        Senator Byrd. I appreciate your comments. I am of the
    opinion that the President's new alien amnesty program is quite
    ill-advised. If you are requesting any new resources, how much
    extra would be needed to implement this sweeping amnesty?
        Mr. Aguirre. Senator, are you finished with your question?
        Senator Byrd. Yes. Anyone.
        Mr. Aguirre. I am sorry. I did not want to interrupt.
        We are requesting additional resources, but not in relation
    to the President's initiative on the temporary worker program.
    The temporary worker program awaits congressional action. And
    until such time as the Congress tells us exactly what the
    Congress wants us to do, we really cannot build a program to
    suit it. Once that program is identified, we will cost it out.
    And there will be a fee associated with that. I expect that the
    fee will be 100 percent covering the cost of the program.
        Senator Byrd. Mr. Garcia.
        Mr. Garcia. Yes, Senator Byrd. As I mentioned earlier, we
    have asked for $23 million in worksite enforcement really to
    position ourselves, one, in an important area of enforcement
    for us, but to also set the stage, so to speak, for working
    with Congress on whatever legislation is passed and looking at,
    again, that integrity of the system, the counter-fraud efforts,
    that will match up with an effective temporary worker program,
    whatever the scope of that program is ultimately decided upon.
        Senator Byrd. My time is up.
        Senator Cochran. Yes, sir.
        Senator Leahy.

                     LAW ENFORCEMENT SUPPORT CENTER BUDGET

        Senator Leahy. Thank you, Mr. Chairman.
        Mr. Garcia, to go back to the Law Enforcement Support
    Center, and as I said, I am very happy with those areas,
    especially Operation Predator among others, when I heard from
    law enforcement agencies and others around the country of the
    support they have gotten from that and how helpful it is to
    them, I want to keep it helpful. Having begun my public career
    in law enforcement, I am very sensitive to what their needs
    are.
        The President's budget proposal did not include a specific
    budget for the LESC. I would assume that the base budget from
    this year will be continued the upcoming year. But the demand
    increases all the time. How do you make sure that--I mean, the
    demand--the more--the LESC, success breeds success. The more
    they accomplish, they more they are heard about from other law
    enforcement, the more they get called upon, I think--I do not
    have the exact figures here, but I know you would find that the
    requirements and the requests continue to go up.
        How are you going to do that? How are you--if the budget is
    the same, how are you going to keep up with the requests?
        Mr. Garcia. Thank you, Senator Leahy. A number of points.
    First, the obvious point is the LESC really is the crown jewel
    of our State and local cooperation efforts, tremendous
    facility, has seen an increase in responsibility, increase in
    workload, and an increase in the incredibly important
    information it puts out to the field.
        You mentioned an increase in inquiries. They were up about
    175,000 this year over the year before, an incredible number
    showing, I think, the realization on the part particularly of
    State and local officials of what a service the LESC can
    provide. We are committed to continuing to provide that service
    and enhancing our capability to do that.
        You are right, the LESC budget is built into the base
    budget for the Office of Investigations. We have also set aside
    money, and I believe we have briefed some of your staff members
    on enhancements for the facility itself of up to, I believe, $5
    million for enhancements to that facility. We are also putting
    new programs within LESC. We recently moved the Central States
    Command Center from Chicago to Vermont, recognizing how
    efficient it is to have that all under one roof.
        As we move programs, we move money with them. We mentioned
    Predator. We have set up the 800 hotline there in Vermont,
    incredibly successful. And I will give one example. We got a
    call into that hotline in Vermont, a citizen call, saying they
    believed that somebody was abusing minors in a house and that
    that person may have had AIDS. We responded with the local
    officials--it was in Massachusetts--out of Vermont to the local
    officials with our ICA agents, arrested the individual, charged
    him with sexual offenses against minors. And we launched an
    immigration detainer, because in fact he was an illegal alien.
    An example of the capability of the LESC, the response
    capability, and then the actual public safety benefit of that
    response. We are committed to expanding upon that capability.
    And I think the LESC is going to grow in importance.
        And as you mentioned, Senator, as it does, we will look at
    the OI budget, we will look at resources we have allocated for
    these programs, and we will look at our ability to do that out
    of the LESC in more effective ways.
        The example I give of the LESC benefit all the time is, a
    State trooper pulls somebody down, flags someone down on the
    side of a road. He is by himself. He is approaching that car.
    That trooper can call the LESC 24 hours a day, 7 days a week,
    and find out if that person in the car is a reentering felon.
    Is that not information that trooper would want to know as they
    approach a car in the middle of the night on the side of a
    highway?
        That is the type of service the LESC can provide. And
    again, Senator, we are committed to working with you, with
    Congress, to ensure that that center maintains a central role
    in supporting our colleagues and in supporting those new
    programs like Operation Predator.
        Senator Leahy. Well, I appreciate that. It is a sad story
    you tell of the situation in Massachusetts. Unfortunately, as
    you know and I know, it occurs in too many places. We all wish
    it did not occur at all. But to the extent it occurs, let us be
    thankful we can move quickly to stop it from continuing.

                         GUEST WORKER PROGRAM CONCERNS

        Mr. Aguirre, I heard your answer to the question--I am
    still a little bit concerned--on this guest worker program of
    the President. You said if we passed this, we will assume that
    there will then be a request for funds to do it. But it is--I
    think we are getting kind of the cart before the horse. We are
    still waiting for the President's proposal. I mean, it is the
    President's proposal. It is not a congressional proposal. The
    President is the one who made the speech. It was done with a
    great deal of fanfare.
        Are we going to get a proposal from the White House? I
    mean, I and others have asked for this for several months now.
    Are we going to get a request for a proposed legislation, or
    has the White House shelved this proposal?
        Mr. Aguirre. Well, no, Senator, I think the White House has
    not shelved this proposal. I think the White House was very
    serious on January 7, when the President issued his call to the
    Congress to act. Subsequent to that, during the State of the
    Union and probably at least a dozen times that I can count, the
    President has mentioned again and again that he expects the
    Congress to act on his initiative.
        Now the way I understand government, of course, I am coming
    from the private sector only 3 years ago, I see the Congress as
    enacting the legislation and I see the Administration as
    administering the legislative----
        Senator Leahy. Well, usually when the President has a
    proposal, especially one that they announce with such great
    fanfare, they actually send it up here. Other than the speech
    and the press releases and the handouts at selected fund
    raisers, we have not seen any legislation. Are we going to get
    legislation?
        Mr. Aguirre. Well, Senator, the legislation that I have
    seen has been a number of bills that have been introduced by
    various members of the Congress. My understanding is that the
    legislation was expected to come from within the Congress, not
    from the White House. But the point is, Senator, I guess if you
    are looking to the substance----

                            BACKLOG REDUCTION ISSUE

        Senator Leahy. If that is the case and the President has
    also promised to reduce the average wait time for applicants
    for immigration benefits to 6 months, if you have these two
    goals, I mean, this is an enormous, enormous increase in work.
    Why is there not any money being requested for either one of
    these things, either to get rid of the backlog or for this
    guest worker program of the President's?
        Mr. Aguirre. Well, yes, Senator. If I may take them one at
    a time, I think the backlog is one that we have finally begun
    to get some traction on it. There will be a backlog reduction/
    elimination plan that will be coming to the Congress in the
    coming weeks. We expect to fulfill the President's commitment
    that I have inherited to eliminate the backlog by September of
    2006.
        As you very well know, after 9/11, that took a serious
    setback. And we are correcting that. And with the reallocation
    or repatriation, if you will, of many of the adjudicators that
    were sent on to do something else, I think we are going to get
    some traction here. We have already found some of our district
    offices meeting the backlog reduction. And we are continuing on
    as well.
        I separate the backlog reduction initiative from the
    President's temporary worker proposal because I think they are
    apples and apples. I think we will be able to implement the
    program based on the Congress legislation that will be
    innovative, that will be technologically efficient, that will
    allow us to process people----
        Senator Leahy. But you need more funds.
        Mr. Aguirre. I think we will need more funds through the
    fees that will be joining the application.
        Senator Cochran. Senator, your time has expired.
        Senator Leahy. Thank you.
        Senator Cochran. Senator Shelby.
        Senator Leahy. I have some other questions for the next
    round.
        Senator Cochran. Absolutely. Sure.
        Senator Shelby.
        Senator Shelby. Thank you, Mr. Chairman.

             NUMBER OF ILLEGAL ALIENS RESIDING IN THE UNITED STATES

        Secretary Garcia and gentlemen, I asked this other in my
    opening statement. What is your best estimate, Mr. Secretary,
    of the number of illegal aliens currently residing in the
    United States of America?
        Mr. Garcia. Senator, you mentioned some of the numbers
    earlier. The number, I think, that is posted on the website is
    7 million. I have the 8 million number as well. I think it
    again reinforces----
        Senator Shelby. You do not really know, do you, honestly?
        Mr. Garcia. I think, Senator, it again reinforces your
    point that it is a very difficult number to identify because of
    what you are trying to quantify.
        Senator Shelby. Is that an increase or a decrease, say,
    from the previous year?
        Mr. Garcia. I could not give you that answer, Senator. I do
    not mean to be evasive. I do not know. I think it would be
    difficult to answer.
        Senator Shelby. Mr. Bonner, do you have a judgment on that?
        Mr. Bonner. My judgment is that the numbers of illegal
    aliens that are successfully entering the United States has
    marginally decreased.
        Senator Shelby. And what do you base that on?
        Mr. Bonner. I base that on the fact that the Border Patrol
    apprehensions--most, of course, the illegal migration, the
    spigot, if you will, is the southern border. The Border Patrol
    apprehensions last year were 931,000 illegal aliens
    apprehended. The vast, vast majority of that was at our border
    with Mexico. I believe that that number is to some extent a
    surrogate for the number of people that have successfully and
    illegally crossed our border. And that apprehension number, has
    been steadily declining for several years.
        Now by the way----
        Senator Shelby. How do you get to the high number of 7, 8,
    perhaps 10 million? You know, we do not know the exact number.
        Mr. Bonner. Yes. It is estimated between----
        Senator Shelby. If you are stopping everybody at the
    border, how are they getting in?
        Mr. Bonner. We are certainly not stopping everybody at the
    border.
        Senator Shelby. I know that.
        Mr. Bonner. No question about it. I mean, right now we have
    the Arizona border, which is substantially where there is mass
    migration taking place virtually every day. That is why we have
    instituted the Arizona Border Control Initiative, to get
    control of that.
        But I would say this. If you look over the past number of
    years, we have, through Border Patrol increases, Border Patrol
    sensoring technology, I believe with the adding of UAVs and
    some sensoring technology in this budget, we are getting
    marginally better control over our border in terms of illegal
    migration. Now does that mean nobody is getting through?
        Senator Shelby. You used the word ``marginally.''
        Mr. Bonner. Well, we need to do a lot better.
        Senator Shelby. Okay.
        Mr. Bonner. And it is very difficult to estimate the
    numbers of illegal aliens that have gotten through and that are
    adding to that base of illegal aliens that are residing
    illegally in the United States. But I would say that there is
    some reason to believe that we have gotten somewhat better
    control of the border. And I say this anecdotally.
        Senator Shelby. Sure, you do.
        Mr. Bonner. Let me just tell you that I know that if you
    take significant parts, of the California border and the Texas
    border, where there have been substantial increases in Border
    Patrol staffing, improvements in the sensoring and technology
    that is being used to detect illegal crossings, that we have
    better control over a lot of the segments of our southern
    borders than we did going back, say, 5 to 10 years ago.
        We have to, by the way, we have to get better. I do not
    mean to say this nirvana here.
        Senator Shelby. I know that. I know that.
        Mr. Bonner. So it is very hard to say. Probably 60 percent,
    by the way, is the estimate of the----

                             ADEQUACY OF RESOURCES

        Senator Shelby. Do you have enough resources? This was
    asked by Senator Byrd and others. Do you have enough resources
    to do the job to protect our borders considering that there are
    probably 7 to 10 million illegal aliens in this country?
        Mr. Bonner. If we cannot--do we have enough resources? We
    have, by the way, through this subcommittee and through the
    Congress and the President's request, we have been adding
    resources. We have a request here for a very significant amount
    of funding for better sensoring technology to control better
    parts of our border.
        I am very sanguine about the prospects through the use of
    unmanned aerial vehicles. For the first time, the Border Patrol
    is pioneering the use of UAVs. We will start that later this
    year, I believe, at the Southwest border. But it will give us
    much better detection capability against illegal migration
    across our Southern border. Potentially, as you know, because
    of the terrorist threat, we also need to be concerned about the
    Northern border, as well.
        Senator Shelby. Absolutely both.

                          IS THE CHALLENGE TOO GREAT?

        Mr. Bonner. So we are moving in the right direction. But it
    is an extremely difficult thing. I actually think, by the way,
    if I could add, I think the President's temporary worker----
        Senator Shelby. It is the challenge. I respect all three of
    you. And I know you are dedicated here.
        Mr. Bonner. Yes, sir.
        Senator Shelby. But is the challenge too great to win?
        Mr. Bonner. No.
        Senator Shelby. In other words, we are losing. We are
    losing the war on illegal aliens now, if there are 7 to 10
    million people here illegally that never had a background
    check, you do not know anything about them. And they are coming
    here. They are staying here. They are working here. And what
    does that say to the people who come here legally and go
    through the hoops?
        Mr. Bonner. Well, I think----
        Senator Shelby. Like you did, sir.
        Mr. Bonner. Well, perhaps Dr. Aguirre can respond to that.
    But I just want to say, Senator, that we can do this. We are, I
    believe, getting greater control over the border. We need to do
    that. If we cannot cut off the spigot for illegal migration
    coming in, well, we cannot ever address this problem seriously.
    Then we have to figure out what to do with the 7, 8, or 10
    million illegals that are here in this country and figure out
    what is the best, from a point of view of practicality,
    realism, and policy, what is the best approach to that problem.

                               OVERSTAYS ON VISAS

        Senator Shelby. And what about--before my time expires,
    maybe you can answer afterward. What about the overstay on
    visas? People come here legally, millions of people come to
    this country legally. What do you do to track those people once
    they are here? How do you know they have gone back unless there
    is a central system checking?
        Mr. Bonner. Customs and Border Protection is to prevent
    them from entering. And ICE has the responsibility----
        Senator Shelby. Mr. Garcia.
        Mr. Bonner [continuing]. To remove them, if we have failed.
        Mr. Garcia. Thank you, Senator. We have the enforcement
    side of US VISIT that has been mentioned earlier. Last year,
    when we stood up ICE, we created a compliance enforcement unit,
    basically to put that integrity in the system. It looks at US
    VISIT. It looks at SEVIS, where we have had problems with
    students coming in, students not going to school, not
    attending, dropping out.
        Senator Shelby. Sure.
        Mr. Garcia. We have made tremendous progress on that.
        Senator Shelby. That is how a lot of the terrorists got
    here. They came here legally, did they not?
        Mr. Garcia. One of the Trade Center----
        Senator Shelby. Some of them overstayed their visas.
        Mr. Garcia. The driver of the World Trade Center bombing of
    the van in 1993 was a student who had come here on a student
    visa, had never gone to school. We take that very seriously. We
    have prioritized the leads using intelligence, using other
    information. We vet those at Headquarters, and we send those
    out into the field. We have been doing that for some time now.
    We are seeking additional funding in 2005 for that program.
        Asa Hutchinson and I both believe that it is incredibly
    important in maintaining that integrity in the system, in
    addition to its national security implications.
        Senator Shelby. Thank you, Mr. Chairman.
        Senator Cochran. Senator Murray.

                  LESSONS LEARNED FROM OPERATION SAFE COMMERCE

        Senator Murray. Mr. Bonner, at the 2002 Western Cargo
    Conference, you said, and I quote, ``The American people on the
    global trading system are more secure, if we screen cargo
    containers that present a high risk for terrorism as early as
    possible and certainly before they reach U.S. shores.''
        I really agree with that. And I am pleased that the two
    most prominent cargo security programs within Customs, C-TPAT
    and CSI, seek to push out our borders to foreign ports. Those
    programs will eventually help expand our various cargo security
    programs into a standard system for sending goods throughout
    the world. But they are not going to get the job done alone. We
    have now spent $58 million on a program called Operation Safe
    Commerce, which is working to test the security of 19 different
    supply chains running through 5 different ports, which
    compromise the 3 largest load centers in the country. In fact,
    more than 80 percent of our cargo goes through those ports.
        I think it is really imperative that we are able to learn
    from all of our port security programs. And we need to tie them
    together and rapidly instituted a large-scale operationally
    cargo security program in the United States.
        Commissioner Bonner, would you tell the committee how you
    are planning to implement the lessons that we have learned from
    Operation Safe Commerce into an overall cargo security
    standard?
        Mr. Bonner. I would be happy to do that, Senator. You and I
    have worked a lot on this issue. But first of all, Operation
    Safe Commerce has been a very valuable test bed for different
    kinds of technologies that would be useful in better securing
    the movement of particularly ocean-going cargo containers from
    various places in the world to the United States. And as you
    indicated I think earlier, 8 to 9 million ocean-going cargo
    containers arrive at our U.S. seaports annually, including some
    of our major ports on the West Coast like Seattle and Tacoma.
        But the approaches to take the lessons there to develop and
    essentially to improve even more the supply chain security
    regimen. And there are two key elements to that. One is, and I
    believe we can do this through the Customs Trade Partnership
    Against Terrorism, leveraging U.S. importers and foreign
    suppliers to increase essentially the point of loading security
    to meet best practices and standards at the point that the
    containers are actually loaded at foreign manufacturers'
    facilities, whether that is in Asia or Europe or elsewhere.
        And secondly, using the lessons from Operation Safe
    Commerce to develop best practices and minimal standards, if
    you will, for a smarter, more secure container to be used in
    terms of the movement of those goods to the U.S. seaports. And
    when I say a smarter container, I mean one that, at the
    minimum, can be read by U.S. Customs and Border Protection
    Inspectors either upon arrival or at the CSI ports, as we
    expand those to more and more ports overseas, to determine
    whether it has been tampered with enroute.
        So those are at least a couple of the things that we are
    looking at to see if we cannot implement to improve the overall
    security of global trade and movement of cargo to the United
    States.

                    REPORT DUE AT THE END OF THE FISCAL YEAR

        Senator Murray. So we expect a report from them by the end
    of this fiscal year. And you are going to be using the
    information that they have learned from that to get to some
    kind of security standard.
        Mr. Bonner. It is still being evaluated. But I certainly
    intend to. I believe, based upon the preliminary reports I have
    obtained, that there are some very useful things that have been
    done that are going to inform us and help guide us to an
    improved security of the movement of cargo.
        Senator Murray. Okay. Well, I do want to work with you on
    that. There is still $17 million to go out. They have spent a
    great deal of time, our taxpayers dollars and money on this.
    And I think we can learn a lot from them. We want to make sure
    it is used and used wisely.

           INSTALLATION OF RADIATION PORTAL DEVICES AT PORTS OF ENTRY

        Commissioner, let me also ask you, Customs is beginning the
    process of installing these radiation portal devices at ports
    of entry throughout the Nation. It seems to me it is a little
    bit late to check for radiation. Both the ports of Seattle and
    Tacoma are located right next to our downtown businesses and
    residential areas. And a ship bound for these ports travels
    through the Puget Sound before they get there. They pass by a
    major refinery compound, three Navy bases that each home port
    nuclear powered vessels, and a major petroleum tank farm.
        Why have you decided, at least initially, not to push out
    the borders when it comes to this kind of technology? And can
    you tell us if you plan on deploying these monitors to foreign
    ports that are participating in C-TPAT?
        Mr. Bonner. I think our objective and our intention is to
    do both. In other words, we are talking about a layered defense
    in-depth strategy. But we do want to do everything we can,
    particularly given the catastrophic consequences of
    radiological weapons, to improve our ability to detect them
    when they are arriving at our borders. And this is, of course,
    our land borders. We have already deployed now almost 250
    radiation portal monitors, very sensitive radiation detection
    equipment, along many places on our land border, particularly
    Canada. We are now expanding to seaports and so forth.
        But at the same time, we want to make sure that containers,
    through the Container Security Initiative, as part of the
    security screening of those containers that are identified as
    posing potential risk for terrorist threat; and that is,
    potentially risk that a terrorist organization like the al-
    Qaeda could have concealed a weapon in those containers, that
    they are not only run through the large-scale X-ray scanning
    equipment, which is important to detect weapons, and
    potentially weapons of mass destruction, but they are also run
    through radiation detection. And that is part of CSI.
        Now, part of radiation detection is radiation isotope
    identifiers, handheld devices, and the like. We have at one
    foreign port, working with the Department of Energy, we are
    doing what I call ``CSI plus'', which is to deploy radiation
    portal detection systems that have the capacity for being not
    only very sensitive, but detecting potentially every container
    moving into that foreign port, including all containers that
    are ultimately outbound to the United States. And we have done
    that, working with the Department of Energy. And I give the
    Department of Energy much credit here but working in tandem
    with our U.S. Department of Energy, we have done that at the
    first CSI port, which is the Port of Rotterdam.
        And I do not know that that has been implemented yet, but I
    expect that it is going to be implemented within the next month
    or so. And so we do see that is what we want to do. If we can
    get these foreign seaports to install more sophisticated
    radiation detection equipment, it is something we want to do.
    We have started that. We have a long way to go.

                     PACIFIC NORTHWEST NATIONAL LABORATORY

        Senator Murray. Okay. As you know, the Pacific Northwest
    National Laboratory is the contracting authority for installing
    those devices. Can you give us a quick update of their
    performance and how the project is progressing?
        Mr. Bonner. Well, my assessment is that they have been
    very, very helpful to us in terms of helping Customs and Border
    Protection select the most appropriate and best radiation
    detection equipment that makes sense for a port environment. In
    the port environments, there are several port environments.
    There is the land border port environment and there is the
    seaport and the like.
        So, they have been very helpful with us in terms of
    assisting us in terms of the testing and the selection and the
    actual installation of this equipment to make sure that we have
    the kinds of protocols that resolve when you do get a radiation
    hit. And we do get hits on these things, that we can determine
    quickly whether it is an innocent radiation-emitting source or
    whether it is something that we need to be concerned about.
        Senator Murray. Well, that goes to another question I had.
        Senator Cochran. Senator, your time has expired.

                                     PORTS

        Senator Murray. Could I just follow up on his last comment?
    Because we have heard from a number of people in the ports that
    they want to know what happens when there is a positive reading
    from these devices and what the protocol is, you know, whether
    the facilities shut down and who is in charge of making those
    decisions. And if you could share with us what that is?
        Mr. Bonner. There is a protocol and I will make sure that
    all of our CBP port directors make sure they have had that
    discussion within the context of the port security committees
    that exist at each port with the Coast Guard.
        Senator Murray. Good. Thank you.
        Senator Cochran. Thank you, Senator.

                       REQUEST FOR DETENTION AND REMOVAL

        Mr. Garcia, one of the largest increases requested by your
    bureau is for detention and removal of people who are illegally
    in the country. It is an increase of $108 million, just about
    10 percent for this activity. Could you tell us what the
    specific needs are here and how you will use those additional
    funds?
        Mr. Garcia. Certainly, Senator. Detention and Removal is a
    very important program, a very important tool in enforcing
    immigration laws and maintaining the integrity of that
    immigration system that we were talking about earlier. A number
    of programs, I believe, were neglected in the past,
    particularly the Institutional Removal Program and the Alien
    Absconder Program.
        If you look at the funding enhancements for 2005, that is
    about $80 million of the dollar amount that you were speaking
    about. Institutional removal goes into the prison facilities,
    Federal, State, and also local facilities, and makes sure that
    we process illegal aliens or aliens subject to removal who are
    in those facilities. They could be very violent inmates,
    inmates with a history of violent criminal activity, predators,
    child sex predators.
        We have done a good job in the past of reaching the Federal
    facilities, according to a GAO report, a fairly good job at the
    State level, and a not very good job, and one we need to make
    much improvement on, on a local level. We are looking to
    transfer that program out of Investigations into the Detention
    and Removal Division, where I strongly believe it belongs, and
    increase our capability to place those inmates into the system
    at an earlier time period so that we streamline the process and
    make it more efficient, so we are holding those inmates for
    less time before they are ultimately removed from the United
    States.
        In fiscal year 2003, ICE removed 140,000 people from the
    United States. That is a very large number. It is a very large
    system. It needs improvement. The money in this request for
    enhancements will go towards that and making it more efficient.
        Fugitive Operations. The number of fugitives estimated in
    the country range up to 400,000. Those are people with final
    orders of deportation who have not complied. A subset of that,
    about 40,000, again an estimate, criminal aliens who have not
    complied with final orders of removal.
        We are very aggressively using fugitive alien teams to go
    after those absconders. We are prioritizing again, looking at
    the public safety value, going after those with a criminal
    record. Again, the biggest public safety value, we have a top
    ten list. We have been very successful advertising.
        This money will go to increasing those Fugitive Operations
    Teams, we call them, 30 additional teams across the United
    States. So it is really again that comprehensive approach to
    looking at integrity of the system and recognizing that an
    important part of that is the detention removal system.

            COOPERATION OF LOCAL AND STATE LAW ENFORCEMENT OFFICIALS

        Senator Cochran. Are you successful in getting the
    cooperation of local and State law enforcement officials in
    helping you achieve your goals?
        Mr. Garcia. Yes, Senator. Again, you have to look at the
    are. And there is a wide range of options available. At one
    side of the spectrum is States that want to actively
    participate in enforcement. And there is a provision, 287G it
    is called, for doing that, where we provide training to local
    officials. And we did it in Senator Shelby's State most
    recently.
        The LESC that I spoke about earlier provides another
    opportunity for cooperation. Anti-gang work, we have been very
    successful working in Chicago, L.A., Charlotte in anti-gang
    work, working with State and local officials. So there is a
    very wide spectrum to that cooperation.
        I believe that the Institutional Removal context is an area
    where we can do more working with the States. It is a benefit
    to both. It makes our work more efficient, where the States
    will flag or bring to our attention inmates who should be in
    our system. And we can remove those criminal aliens from
    probation or parole systems that cost the State money in terms
    of supervisory dollars. So I think that is an area where we are
    going to move much more aggressively in the State and local
    cooperation area.

                    ACKNOWLEDGEMENT OF HARD WORK AND SUCCESS

        Senator Cochran. Well, I want to commend you for the hard
    work and the good job you are doing, your bureau is doing. I
    think we have seen a lot of new initiatives developed and a lot
    of success stories that have not gotten the attention they
    probably should have.
        Mr. Garcia. Thank you, Senator.

    UPDATING CITIZENSHIP PROCESSES AND LOOKING AT THE TEST THAT IS GIVEN TO
                 THOSE SEEKING CITIZENSHIP IN THE UNITED STATES

        Senator Cochran. Mr. Aguirre, I know that you are in the
    process of updating citizenship processes and looking at the
    test that is given those who are seeking to obtain citizenship
    in our country. Could you tell us a little about what you are
    doing in that area and whether there are any additional funds
    requested to support those activities?
        Mr. Aguirre. Well, yes, Senator. Thank you. As mandated by
    Congress, we have instituted an Office of Citizenship, which is
    actually responsible for the citizenship aspect of immigration
    or, if you will, the naturalization aspect of immigration. That
    office is looking at various aspects. One, we are trying to
    make the test of citizenship a better process. It is a good
    process now, but I think it can be improved.
        We have gone through a pilot project last year to look at
    better ways to deal with the English portion of the test and
    see how we can have a more meaningful process. That pilot is
    now back. We have had some very good reports from some of the
    NGOs. And we are trying to fine tune and see how we can make it
    better.
        Additionally, there is a provision for history and civics,
    which is also part of the test that an applicant must go
    through before they are granted naturalization. We are looking
    at ways to see if we can make it a more meaningful approach
    where the questions are not the end, but the end is the
    learning and the question is part of the component. And to that
    end, sir, we are working with academicians. We are working with
    historians. We are working with the Department of Education to
    see how we can do the learning a more meaningful aspect,
    particularly since many of these applicants are slow in their
    English knowledge. We want to see how we can improve their
    understanding of what it is to be an American, not only from an
    historical standpoint, but also the civic responsibilities that
    one assumes when they become a citizen. That is all part of the
    element. And yes, sir, we do have an inclusion in our budget to
    accommodate that.
        Senator Cochran. Thank you very much.

          REQUEST FOR THE CUSTOMS TRADE PARTNERSHIP AGAINST TERRORISM

        Mr. Bonner, there is a request for an additional $15
    million to expand the Customs Trade Partnership Against
    Terrorism. Could you tell us how these resources are going to
    be used and what the purpose of that program is?
        Mr. Bonner. Yes, Senator, Mr. Chairman. It is essentially
    twofold. One is to be able to expand the validation of the C-
    TPAT partners. In other words, they enter into a commitment
    with U.S. Customs and Border Protection to take certain mission
    measures, best practices, to improve their supply chain
    security literally from their foreign vendors to our ports of
    entry. And we want to, as the old saying of some former
    President was ``trust, but verify.'' So we are expanding our
    validation capability, so we are doing more validation.
        And as we validate, more people understand that this is not
    window dressing. This is serious stuff. If you are going to get
    expedited treatment upon arrival, you need to take these
    measures that you have committed to take. So part of it is for
    that. Part of it is to further expand the base of C-TPAT
    partners. We already have 5,900 companies, including many of
    the major U.S. importers that are part of C-TPAT. In fact, the
    importers alone are about 3,500. These are major importers that
    account for over 40 percent or more of the all of the incoming
    cargo coming into the United States. So it also will be funding
    to expand and administer the program.
        Senator Cochran. Thank you.
        Senator Byrd.
        Senator Byrd. I believe, Mr. Chairman, that this will
    complete our series of hearings, will it not?

                           KUDOS FOR CHAIRMAN COCHRAN

        I want to thank you Mr. Chairman for conducting these
    hearings as you have. It should also be noted that the chairman
    always calls on the other members of the committee to ask
    questions, and then he allows a second go-around. He does not
    ask his questions until the other members have asked their
    questions, and sometimes it is 2 hours before he asks his
    questions. So, that courtesy should not be overlooked. I have
    observed it, and I thank the chairman for the courtesies that
    he continually extends to the other members of the committee.
    He is a good chairman. He is not only fair to his colleagues on
    the committee, but he is also very fair and considerate of the
    witnesses.

     IS THERE MONEY IN THE PRESIDENT'S BUDGET TO IMPLEMENT THE PRESIDENT'S
                               AMNESTY PROPOSAL?

        Earlier, Senator Shelby asked whether there is money in the
    President's budget to implement the President's amnesty
    proposal. I do not believe that we got a complete answer, and
    this is nobody's fault. Mr. Aguirre said that immigration
    services would be paid for with the new fees. I accept that.
    But we did not hear, I do not believe, from Mr. Garcia or Mr.
    Bonner.
        Certainly there would be higher costs for security
    background checks, for guest worker enforcement, for removal of
    aliens, for workplace enforcement, and for increased travel
    across the borders. The modest increases in the budget will
    barely keep up with current needs. What will the increased
    costs be, if the President's amnesty program is approved? And
    why are these funds not in the budget?
        Mr. Bonner, do you want to take a shot at that question?
        Mr. Bonner. Well, first of all, you are right, Senator
    Byrd. There are no funds, per se, in the CBP budget for the
    Temporary Worker Program that has been proposed. And I would
    make the comment that from a CBP perspective, and as the
    President has indicated, that if there were to be a Temporary
    Worker Program enacted, it would have to have a very strong
    border enforcement for a security aspect to it.
        And right now, we, of course, have a sizable Border Patrol.
    I discussed with Senator Shelby that we have a ways to go here.
    But I do think one thing that has been lost is that in the
    Temporary Worker Program proposal, that it does hold the
    promise, I think, as outlined, if you had a Temporary Worker
    Program, it potentially could relieve some of the pressure at
    the border in terms of illegal migration and give us a better
    ability to control the border, Senator Byrd. And that has
    always been important as a national objective of the United
    States.
        But let me tell you right now it is absolutely essential,
    because we need to reduce the flow of mass migrations at our
    Southern border in order to increase our prospects for
    identifying and apprehending terrorists who may be attempting
    to illegally enter our country. So I do think that there is a
    policy aspect to this that could help us get a better and
    firmer control of the border, which we need for homeland
    security purposes.
        But once if there were a bill that took final shape,
    obviously I would like to have an opportunity to discuss
    initially within the Administration what I think would be
    needed to better control the intake spigot, because we ought
    not to have a Temporary Worker Program and still have, whatever
    it is, 300,000 or 400,000 illegal aliens entering our country
    to both seek jobs or for other purposes.
        Senator Byrd. Are you in a position at this moment to
    submit an estimate as to the resources that would be needed?
        Mr. Bonner. I certainly do not have it at my fingertips,
    but I would certainly, if you requested it, I would take under
    advisement as to how we might be able to get that information
    to you.
        Senator Byrd. Would you do that for the subcommittee?
        Mr. Bonner. I will make every effort to do it. Obviously,
    Senator, I will also have to work this through the Department
    and through the Administration. But I will make every effort to
    get you that information.
        Senator Byrd. Very well. If you would, please.

                                  ICE RESPONSE

        Mr. Garcia, would you make an effort along those lines?
        Mr. Garcia. Just to clarify, Senator, looking for a number
    in terms of enforcement on the President's Temporary Worker
    proposal? I would echo what Director Aguirre said in terms of
    without the outline and without the participation and
    structuring how that is enacted and how it rolls out, it would
    be very difficult to speculate as to the resources needed to
    enforce it. I think the most productive area to go here, again,
    is to lend our expertise to the process.
        And again, looking at the lessons learned, and I think you
    mentioned a few in your earlier remarks, of other legislation
    in the past to see how we can build in provisions that will
    limit the amount of fraud, anti-fraud work investment we need
    to make, and then again to look at what is the scope of the
    legislation, how will that affect the population that is in the
    United States in our ongoing enforcement efforts, and then to
    calculate what do we need to ensure the integrity of the system
    that we have all been talking about.
        I think without concrete provisions or at least an outline
    of where that legislation is going when enacted, it would be a
    very difficult exercise to calculate the amount of money we
    would need on the enforcement side.
        Senator Byrd. Well, it sounds to me as if the President was
    just posturing when he proposed an amnesty program. Nobody
    seems to have in mind a figure as to what this is going to
    cost. Certainly Congress is going to need to know more than you
    are able to tell us. You do not seem to have the slightest idea
    as to what this is going to cost. We are going to need to know
    these things.

                  BUDGET REQUEST FOR THE FEDERAL AIR MARSHALS

        All right. The budget request for the Federal Air Marshals
    is essentially a flat-line request similar to last year's
    funding level. Yet, on two occasions in less than a year, late
    last summer and again over the recent winter holidays, the
    threat level was raised to Code Orange, in large part because
    intelligence and other indicators led the department to believe
    that there were enhanced threats to the United States via
    airplanes flying into or over this country.
        However, based on budget briefings with my staff, I
    understand that the resources directed to this program are not
    sufficient to hire the number of air marshals needed to
    maintain a more robust presence on targeted flights. On March
    9, I wrote to Secretary Ridge expressing my concerns about the
    potential that we may not have sufficient personnel to cover a
    significant percentage of targeted flights this year, and that
    this problem will only be compounded given the inadequate
    funding requested in the fiscal year 2005 budget.
        While we are unable to talk in specifics, I am concerned
    about the inability of your agency to, at a minimum, replace
    retiring air marshals. Are you aware, Mr. Garcia, of my letter
    to Secretary Ridge?
        Mr. Garcia. I became aware of it in preparation for this
    hearing, Senator.
        Senator Byrd. Do you know when I will get a response to my
    letter, ensuring me that the Department will maintain a robust
    staffing level of air marshals?
        Mr. Garcia. I will follow up with that, Senator, and get
    back to you. Obviously, you share, as the Department, your
    concern, the importance you place on the air marshal program.
        Senator Byrd. If my understanding of the Air Marshal budget
    and the status of the Air Marshal program is even close to
    being accurate, why are you not requesting more funding for
    hiring additional Air Marshals, ensuring that they receive
    advanced training, and increasing the tools at their disposal
    for the protection of airplanes and their passengers?
        Mr. Garcia. Senator, I think, as I mentioned earlier, the
    Air Marshals are our newest division within ICE. They came to
    ICE, I believe, in early November this past year. We are in the
    process of looking at the Federal Air Marshal Service as a law
    enforcement division within ICE, seeing how we can support
    their mission and how they support the broader ICE goals.
        We are looking at a number of different things. You
    mentioned code orange. During the most recent threat level, the
    raising of the threat level most recently, we in fact were able
    to deploy ICE agents who had been trained as Air Marshals to
    fly, I believe, more than 300 missions with the Air Marshals
    and increase their capacity. So we are looking at a number of
    different things.
        One of the things we are looking at very closely, as you
    know, and I believe you have been briefed, are our budget
    issues and our future looking down the road at the FAMS and
    what their capabilities are. That is an incredibly important
    mission, as I mentioned earlier, in ensuring civil aviation
    security. I look forward to working with this Subcommittee on
    the very important issues facing the Air Marshals and
    continuing to support that vital mission.
        Senator Byrd. How is my time running?
        Senator Cochran. Your time has expired.
        Senator Byrd. All right. Thank you. I am glad I didn't ask
    the question earlier.
        Senator Cochran. Thank you very much, Senator.
        Senator Shelby.

                                 VISA OVERSTAYS

        Senator Shelby. Thank you. I want to go back on the visa
    overstays. How many people come into this country legally each
    year? That is, as a student, business, vacationing, so forth.
    It has to be in the millions.
        Mr. Bonner. Tens of millions.
        Senator Shelby. Tens of millions. So they get a visa to
    come to this country most of the time, do they not?
        Mr. Bonner. Yes, Senator. They get a visa unless they are
    traveling into the United States from a visa waiver country, in
    which case they would not require a visa.
        Senator Shelby. And how many countries do we have visa
    waiver agreements with?
        Mr. Bonner. The last time I checked it was about 16 or 17.
    Do not hold me to the exact number, but in that ballpark.
        Senator Shelby. Do any of those countries come out of the
    Middle East?
        Mr. Bonner. No, I do not believe there are any countries on
    the Middle East that are visa waiver countries anymore.
        Senator Shelby. Okay. Now how many--how do you keep up
    with--let us say there are tens of millions. Is ten million too
    few people?
        Mr. Bonner. Oh, on an annual basis, there are more than
    that that come in under visa----
        Senator Shelby. Twenty million? Twenty-five million? Just
    give your best shot.
        Mr. Bonner. I think it is probably around 30 million.
        Senator Shelby. Thirty million people.
        Mr. Bonner. Let me do it this way: It is 30 million through
    our international airports, more or less.
        Senator Shelby. Thirty million people.
        Mr. Bonner. When you talk about our land borders, you are
    talking about even more gigantic numbers of people that are
    coming in with temporary worker cards or with visas.
        Senator Shelby. Okay. Now how do you keep up with this huge
    number of people? Do you have the resources, one, to keep up
    with it? Let us say I came in, and had a visa. How would you
    keep up with me? And let us say I came from a country that did
    not require a visa, and I come in and they stamp my passport.
    How do you know if I ever leave, is what I am getting at.
        Mr. Bonner. One of the great accomplishments of the
    Department of Homeland Security has been that at our
    international airports we have instituted the US VISIT program
    and technology. And so we know everybody that is coming in with
    a visa at the time they are presenting themselves to a CBP
    inspector at our international airports. One, whether they have
    been issued a visa. We actually have on the screen the visa
    with their photographs. We take a biometric, which are the two
    fingerprint scans. And we can determine with virtual certainty
    that the person presenting themselves to us is the person who
    was issued the visa in the first instance by the State
    Department.
        Now we did not have that capability before.
        Senator Shelby. Sure. I know.
        Mr. Bonner. By the way, we also have a 994 form, that has
    some information in it that is not fully automated about the
    person.
        Senator Shelby. You are talking about tools. You are
    getting better tools, I understand, to deal with.
        Mr. Bonner. Yes, sir.
        Senator Shelby. And that is good. And you are probably
    going to need more. But my real thrust here is, if you have and
    I will just use 30 million people coming to the United States,
    and you have an entry stamp for them, you know that they come
    in, do you have a correlation to when they leave? And is that
    closed, in other words?
        Mr. Bonner. Well, we have some correlation there, because
    if they----

                 WHO IS IN THE COUNTRY LEGALLY AND OVERSTAYED?

        Senator Shelby. You see what I am getting at. In other
    words, do you really know who is in this country legally, that
    come legally and over stay?
        Mr. Bonner. Well, the answer to that one is that we do not
    know everybody that has overstayed visas that has come into the
    United States, because there is not a fully perfected automated
    exit system at this point.
        Senator Shelby. Sure.
        Mr. Bonner. We are starting the prototype of that through
    the Border and Transportation Security Directorate of the
    Department by trying to model that at airports. And then to
    have a complete system, we will obviously have to include the
    land borders. So the answer is--you know, by the way,
    ultimately----
        Senator Shelby. The answer is no, you do not have it.
        Mr. Bonner [continuing]. If they get into the country----
        Senator Shelby. Is that fair?
        Mr. Bonner. If they get into the country----
        Senator Shelby. Mr. Bonner.
        Mr. Bonner. Yes. Yes, sir.
        Senator Shelby. Is the answer, as we speak today, as you
    speak today, the answer is no, you do not have the system in
    place to really keep up with it.
        Mr. Bonner. Not a foolproof system. We have a system.
        Senator Shelby. Sure. We know you have a system.
        Mr. Bonner. But it is not a system that tells us that
    everybody that has entered on a visa for a period of time has
    not overstayed that visa. And if they have overstayed, then we
    have issues of identifying who they are, where they are. And
    then, as Assistant Secretary Garcia was saying, ICE then has
    the responsibility for essentially locating and removing. And
    there are huge numbers we are talking about.
        Senator Shelby. And how many? Let us assume of the 30
    million that come in, that there are a lot of people that do
    not go back. I do not know how many, but it has to be heavy.
        Mr. Bonner. That overstay their visa.
        Senator Shelby. Sure, overstaying their visa. What do you
    do about it? And how many have you found and deported that have
    overstayed their visa?
        Mr. Bonner. I will give you a way of looking at that. And
    that is and again, these are estimates.
        Senator Shelby. No. I do not want to just look at it. We
    want to know. Go ahead.
        Mr. Bonner. Yes. But let us start with what are some
    estimates.
        Senator Shelby. Sure.
        Mr. Bonner. And that is, if you estimate that there are 8
    million people that are illegally residing in the United
    States, and the figure might be higher, but if it is 8 million,
    the estimates are that about 40 percent of those are visa
    overstays.
        Senator Shelby. Okay.
        Mr. Bonner. So 3 million plus. And then the question is,
    well, how do you prioritize that, particularly in light of the
    terrorist threat, criminal aliens and the like, to devote
    resources to go after them. And I do not think the resources
    are necessarily sufficient to do that. But ICE is the one that
    has the resources and the responsibility. And I do not mean to
    pass the buck here in any sense, but it is an issue then as
    to----
        Senator Byrd. We do need to talk about the bucks. That is
    what the senator is trying to find out.
        Senator Shelby. We are trying to get to the bottom of this.
    What are the real numbers? What are you doing about it? And if
    you are not doing a lot about it, and obviously you are not
    doing what you could, what do you need? Do you need resources
    to do it?
        Senator Cochran. Do you want to answer that?

                       ICE RESPONSE TO OVERSTAY QUESTION

        Mr. Garcia. Yes. Thank you, Senator. To pick up, I guess,
    where Rob left me, since the initiation of NCR or SEVIS, a
    tremendous amount of information has been generated. You hit on
    it, Senator, when you say our exit controls. And Commissioner
    Bonner was talking about it. We get these leads in. We have had
    20,000 NCR US VISIT now, SEVIS leads, resolved at headquarters.
    Out of that group, we have sent 1,200 leads out into the field
    to be resolved in our field offices.
        We have to take the indications of overstay and violations.
    And then we have to check the systems. We have to look at the
    exit data. And we have to do follow-up. And we have to
    prioritize.
        Senator Shelby. Excuse me. If it is 40 percent of the
    illegal aliens, just use that for an example, of 8 million,
    that is 3 million, a little more than 3 million, if it was 8
    million, 40 percent of that, 3 million overstays. It seems that
    you are just overwhelmed. If there are 3 million illegal aliens
    here because they overstayed their visas and you do not know
    where they are--maybe you know who they are, because there is
    no exit, or maybe you do not know that.
        I am not here to call you down on it, because I know you
    are sincere and you are competent. But I think you have a
    tremendous problem, or we do in this country.
        Mr. Garcia. A long time to get to that population, looking
    at the past and the future. I had one particularly egregious
    case last week where someone was in overstay from 1986,
    committed a horrendous act against a 3-year-old child in
    Maryland. So that shows you the scope of how far back we are
    looking.
        Going forward, which is a little bit different conversation
    that we have been talking about here with the new US VISIT, the
    new SEVIS system--I know, Senator, you are familiar with the
    old systems and how much of an improvement this has been. We
    are working with that prospectively to look at these 20,000
    leads and the 1,200 we have sent out to put deterrence into the
    system, which was not there before, I believe.
        Then you look at the past. And you say: How do we
    prioritize that child sex predator that has been here since
    1986 and the other ones that pose a public safety risk? How do
    we work with whatever legislations? How do we address that all
    in a meaningful way? And I think that is what we are all
    working towards here at the table.

               DOES ICE HAVE ENOUGH RESOURCES TO HANDLE OVERSTAY?

        Senator Shelby. But my real question, do you have enough
    resources to do that?
        Mr. Garcia. Yes, in where we are going. And if you look at
    the initiatives we have asked for, there is compliance
    enforcement enhancement there. We have been doing that,
    building that out of base up till now. We are asking for $16
    million coming here to look at processing more leads and
    building a targeting system that is even more meaningful.
    Because again, enforcement is partly deterrence. And we have to
    send that message out.
        Senator Shelby. Thank you for your indulgence, Mr.
    Chairman.
        Senator Cochran. Senator, thank you.
        I have two final questions and other senators may have
    other questions. We are going to have a vote, I think, at about
    12:15 on the Senate floor. So we are about through, if that is
    any consolation to you.

           $64 MILLION REQUEST FOR SENSOR AND SURVEILLANCE TECHNOLOGY

        I notice in the budget request there is $64 million being
    requested for sensor and surveillance technology. There is
    technology currently deployed between the land ports of entry,
    but you are developing a project plan for the $64 million
    request, as I understand it. Do you have any idea what the
    total cost of finishing the installation of sensor technology
    is going to be? Mr. Bonner, I guess that is a question you
    should answer.
        Mr. Bonner. It is, because this is sensoring technology for
    the Border Patrol to better control and detect against illegal
    crossings by illegal migrants, drug smugglers, potential
    terrorists. And the $64 million is going to help us immensely
    in terms of expanding the things like the remote video system
    and the ISIS system and the ground sensors that we use at
    strategic places along the Southwest border. And of course,
    unfortunately since 9/11, we have had to give more attention to
    our Northern border with Canada, too, in terms of understanding
    who and what may be crossing that border, so that the Border
    Patrol is then able to respond and apprehend those that
    illegally cross our borders.
        But you are asking me what the total is. I do not have the
    number. I mean, the goal is to have sensoring technology, which
    could include ground sensors, the sophisticated camera
    sensoring systems, plus UAVs, and we have funding for that. To
    give us a more comprehensive picture, that is the goal, of
    illegal penetration of our borders at the most vulnerable
    areas. I mean, there are some areas of our border that are, for
    example, I mean, in the Rocky Mountains on the Canadian border
    during the winter it is virtually impassable. So we are looking
    at it in terms of where the vulnerabilities are. The goal is to
    expand the sensoring system to give us sufficient visibility
    that we have substantial control over and detection
    capabilities for people moving across the border.
        Mr. Chairman, what the total number is, I do not have it
    right now. It would be more than the $64 million that is being
    requested in the 2005 budget request.

                $10 MILLION REQUEST FOR UNMANNED AERIAL VEHICLES

        Senator Cochran. There is also an indication that you need
    funding up to $10 million to develop a system of unmanned
    aerial vehicles to support the Border Patrol and other
    components of Customs and Border Protection. Are you proceeding
    now to use funds from other sources under your control in order
    to get moving on this program in connection with the Arizona
    Border Control Initiative, for example?
        Mr. Bonner. Yes, we are. And even in 2004 we are proceeding
    to develop and actually deploy an unmanned aerial vehicle in
    support of the Arizona Border Control Initiative to better
    control the Arizona border. And I believe that we are going to
    be able to do that sometime by the May/June time frame,
    actually deploy a UAV that will cover and detect along a
    significant portion of the Arizona border. The funding for this
    is not in our budget. But we have identified funding through
    Under Secretary Hutchinson and the Department of Homeland
    Security through the Science and Technology area to essentially
    pilot and determine how effective a UAV is in terms of
    detecting. So that in 2005, we should be able to have a good
    understanding of what we need to actually deploy on a more
    permanent basis on the Southwest border at particular critical
    segments, as well as on our Northern border with Canada.
        Senator Cochran. Mr. Garcia, I think the Coast Guard and
    Air Marine Program within your bureau have tested the concept
    of unmanned aerial vehicles in their operations. Is your
    experience going to be shared, or will this be communicated to
    the other agencies so they will have the benefit of your
    understanding and your experience?
        Mr. Garcia. Absolutely, as far as the Air and Marine goes.
    We are working down in Arizona. And I am working very closely
    with Commissioner Bonner.
        Senator Cochran. Senator Byrd, those are my last two
    questions.
        Senator Byrd. Thank you.
        Senator Cochran. I yield to you for whatever time you need.
        Senator Byrd. Thank you, Mr. Chairman. I will submit most
    of my remaining questions for the record. I do have two that I
    will ask at this time. Then we will go to the floor for our
    vote.

               CONTINUED DUMPING AND SUBSIDY OFFSET ACT TRADEOFF

        On March 19, Commissioner Bonner, CBP issued its annual
    report for 2003 on the Continued Dumping and Subsidy Offset Act
    Trade law. This is a law that I helped to enact that allows
    Customs and Border Protection to reimburse U.S. companies that
    have been injured by unfair trade practices with funds that are
    collected as import duties on unfairly traded imports. CBP's
    report states that, while CBP should have distributed at least
    $320 million in collected duties to eligible U.S. companies and
    workers in 2003, it was able to distribute only $190 million.
        CBP failed to collect $130 million from unfair traders.
    Most of the uncollected $130 million consists of import duties
    not collected by CBP on goods from China in particular. While
    part of the problem is that Chinese companies are refusing to
    pay these duties, it also appears that CBP is failing to
    enforce the U.S. trade laws, because it is not diligently
    pursuing the parties who are refusing to pay these duties. Why
    is CBP not collecting millions of dollars in duties on unfairly
    traded imports as required by U.S. law?
        Mr. Bonner. First of all, we take very seriously at Customs
    and Border Protection, Senator Byrd, our responsibilities under
    the Byrd amendment. And I believe that the answer to that lies
    in essentially three factors, most of which are beyond the
    control of Customs and Border Protection. The first factor is
    that when there is a preliminary proceeding against a Chinese
    company, and these are mainly agricultural products, and it is
    the then Commerce Department that determines what the
    preliminary antidumping duty rate is going to be. And in many
    instances, as I think you know, it has turned out that when
    there is a final order, the antidumping duty rate is much
    higher than the Commerce Department originally set.
        So that means that the bonds, the Custom bonds, that were
    to secure the payment of the antidumping and/or countervailing
    duties in many instances were not adequate.
        Secondly, the Chinese companies in many instances have
    essentially not come in and defended the antidumping charges.
    And therefore, that has resulted in punitive antidumping duties
    being levied at a much higher rate.
        The second factor is that once the antidumping duty final
    order is entered by the Commerce Department, we have found that
    the companies that were in China that were shipping the garlic,
    the mushrooms, or the other agriculture products, those
    companies simply fade into the woodwork and new companies
    appear. So they are changing, essentially, new shippers. And
    under the Commerce Department rules, unless you can show that
    the new shipping company is, in fact, an alter ego of, owned or
    controlled by the shipping companies that are subject to the
    antidumping duty, they are not viewed as having to pay the
    antidumping duty.
        And the third thing, unbelievably, is that for the
    inability to collect this $130 million more or less that you
    have talked about is the fact that surety companies that have
    been approved by Treasury Department, a number of them,
    including one large one in Los Angeles, have essentially
    defaulted. In other words, they were standing behind bonding
    these shipments. And they are not in a position to pay.
        So the long and short of it is, we clearly need to do
    better. We are engaged with the Commerce Department to address
    those two issues, and with the Treasury Department to address
    the issue of the adequacy of the surety, to have a better
    chance of recovering more of the antidumping duties.
        That said, by the way, I still think, given the system, no
    matter how hard we try to approach this issue, it is very
    difficult for me to sit here and say that we are going to be
    able to collect 100 percent of anti-dumping duties that are
    ultimately assessed in final orders by the Commerce Department.
    We are going to do our best, and we are doing our best to do
    that.

                        WHY IS CHINA MORE OF A PROBLEM?

        Senator Byrd. Why does the problem seem to involve more
    imports from China than from any other country?
        Mr. Bonner. Well, first of all, I mean in one sense,
    leaving aside Canada, more goods are imported from China than
    any other country of the world to the United States. China went
    into second place behind Canada in terms of volume of imports
    into the United States last year, according to Customs and
    Border Protection data. It surpassed Mexico, which had
    surpassed Japan. So more of our imports are coming from China.
        Secondly, we are concerned from an enforcement point of
    view that, particularly in this area that you are describing,
    at least some companies, particularly with agriculture
    products--and we have also seen illegal trans-shipments of
    textiles and that sort of thing through essentially other
    countries from China. We are concerned that it probably is the
    number one enforcement issues for both antidumping duties and
    for evasion of U.S. trade laws that relate to textiles.
        But part of it is, they are a major exporter. And part of
    it is that we need to enforce the antidumping duty laws, which
    ultimately under the Byrd amendment result in funds to the
    injured U.S. industry. So we are committed to working on this.
    And we clearly have some work to do to make sure that our rate
    of recovery is higher than it is right now of the antidumping
    duties.
        Senator Byrd. All right. I hope that you will carry out
    that commitment vigorously.
        Mr. Bonner. Yes, sir.

                       INTEGRATED FINGERPRINT DATA BASES

        Senator Byrd. I have one final question now, Mr. Chairman.
        During our March 9 hearing with Secretary Hutchinson, the
    issue of integrating fingerprint databases was raised by
    subcommittee members of both parties. The ability of illegal
    aliens and criminals to slip through our inspection and
    investigation webs and do harm to U.S. citizens has been amply
    documented. It is of the greatest concern to me and should be
    one of the department's primary goals.
        At one point, Secretary Hutchinson stated that the
    fingerprint databases would be integrated by the end of the
    year. At another point, he said that the department would find
    the necessary $4 million or so to ensure that border patrol
    agents had access to this information at all of the sites.
        I want to make sure that what he said would be done can
    actually be done. Earlier this year, the Department of
    Justice's Inspector General said it would take several years to
    achieve the goal of fully integrating the Justice Department's
    two-fingerprint system, known as the Automated Biometric
    Identification System, or IDENT, with the FBI's IAFIS
    fingerprint database. But, Secretary Hutchinson said that it
    was a priority and would be done in a matter of months.
        Now who is right?
        Mr. Bonner. Well, I think Under Secretary Hutchinson is
    right here, if I understand what the issue is. And I believe
    the issue is whether and how long it will take us to integrate
    the IDENT and IAFIS system for at least our front line, which
    is our border line, and at least at some of our ports of entry
    for inspectors. And in that regard, Senator Byrd, there is an
    integrated system that essentially permits the integration of
    both IDENT and IAFIS. And that system allows, for example, at a
    Border Patrol station, allows the ten prints that are taken to
    be run against both the IDENT and the IAFIS system.
        The IAFIS, of course, as you know, is the FBI's master
    criminal fingerprint system in Clarksburg, West Virginia. And
    also at the same time run against the IDENT database. So the
    question is a deployment issue for CBP. And I am not talking
    about State and local law enforcement here. I am just talking
    about Customs and Border Protection.
        And I believe right now, we have deployed some of these
    integrated systems to Border Patrol stations. We have deployed
    about 96 integrated systems to 31 border patrol stations. The
    plan is to deploy 255 of these integrated systems, which would
    be to all of the Border Patrol stations by the end of the year.
    Now that might not be this fiscal year but it may be the end of
    the calendar year.
        And then secondly, we have had IAFIS systems at 48 of the
    major ports of entry. Of those 48, 27 can do both, run against
    the IDENT and the IAFIS system. And we plan to have the
    integrated system, if you will, at all 48 of those ports also
    by the end of the year. So we do have an integrated system.
        Now the only thing I can tell you about the Justice
    Department, is that it may be that for purposes of State and
    local law enforcement having the capability of running prints
    through both IAFIS and IDENT, it may be that that is going to
    take longer. I do not know the answer to that. But perhaps that
    is going to take several years.
        But I know for CBP, which is the front line agency of the
    U.S. Government at our borders, we are making excellent
    progress in terms of rolling out that integrated system. With
    the right procedures in place, it will give you a better means
    of protecting against criminal aliens being able to get into
    the United States.
        Senator Byrd. I fully support the statement of the IG and
    the Justice Department when he states as follows, ``This
    integration is critical to identifying illegally entering
    aliens on lookout lists or with criminal histories. But
    progress has been slow.''
        Mr. Chairman, I raised my concerns with Secretary Ridge
    about fingerprint database integration in relation to his plan
    for deploying the US VISIT system. I cannot stress enough the
    importance of moving forward on this effort as expeditiously as
    possible. The lives of our citizens are at stake.
        The FBI tells us that the Hutchinson proposal does not
    provide access for State and locals. This is a weakness that
    must be met.
        I thank you, Mr. Chairman.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Cochran. Thank you, Senator Byrd.
        Thank you, all of our witnesses, for your cooperation with
    our subcommittee. As you know, written questions may be
    submitted to you for the record. And we ask you respond to them
    within a reasonable time.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]

                  Questions Submitted by Senator Thad Cochran

                       ARIZONA BORDER CONTROL INITIATIVE

        Question. Under Secretary Hutchinson recently announced the Arizona
    Border Control Initiative. The announcement mentioned 260 Border Patrol
    agents, assigning 4 additional helicopters, $1 million for new sensor
    technology, $2 million to house additional apprehended illegal aliens,
    and other unspecified resources for detention. How are CBP and ICE
    paying for the Arizona Border Control Initiative?
        Answer. CBP has identified funding within the fiscal year 2004
    appropriations for the placement of the 260 agents, new sensors
    technology and the additional helicopters for the initiative. ICE is
    funding its efforts associated with the Arizona Border Control
    Initiative from within its fiscal year 2004 appropriations.
        Question. Where are the funds coming from to pay for the permanent
    transfer of 200 border patrol agents?
        Answer. CBP and the Border Patrol will request approval of the
    appropriations committees to use supplemental funds which remain
    unspent after the completion of the relocation of the 400 agents to the
    northern border in fiscal year 2004. CBP has met the mandate to triple
    the number of agents on the northern border. Approximately $2.5 million
    is required to move the 200 agents into the Arizona border area.
        Question. What impact will these actions have on initiatives funded
    by the fiscal year 2004 Appropriations Act and on base programs and
    staffing needs?
        Answer. The Arizona Border Control Initiative is a high priority
    border enforcement operation to control illegal entry in these areas.
    The impact of ABC on lower priority base programs will be minimal and
    no changes in current border operations are anticipated. In addition,
    there will be little or no staffing impacts along the other border
    sectors due to the Arizona Border Control Initiative other than the
    relocation of the 200 agents.
        Question. Which border patrol sectors are losing agents and
    helicopters to Tucson?
        Answer. Four helicopters were transferred to Tucson from the San
    Diego Sector. The transfer of 200 agents is pending receipt of a
    selection list of qualified applicants. Applicants will in all
    likelihood come from across the entire United States.
        Question. Will this initiative need to be pulled back in light of
    the funding problems within CBP and ICE which have initiated a hiring
    freeze and other actions to slow down or stop spending? If not, why?
        Answer. Securing our Nation's borders is a top priority of CBP. The
    current emphasis of our enforcement strategy is gaining control of the
    illegal traffic entering through the State of Arizona. It is
    anticipated the ABC Initiative will continue as planned. This
    initiative will not be affected by the temporary suspension of hiring
    or by other steps being undertaken to address the budget issues to
    which you refer. This initiative is a high-priority for the Department,
    CBP, and ICE.

                               OVERSEAS STAFFING

        Question. CIS, CBP and ICE each have overseas responsibilities,
    some inherited from legacy agencies and some stemming from new
    initiatives. The President's budget requests increased resources for
    overseas staffing for CBP and ICE, while CIS has plans for a formal
    Refugee Corps overseas. How will your organizations cooperate overseas?
        Answer. The Office of the Secretary is conducting a detailed review
    of the role of DHS overseas, including the management structure that
    best advances the full range of the international liaison, enforcement,
    inspection and services missions of the Department.
        Question. Will each organization have separate overseas management
    structures? If not, how will these resources be managed?
        Answer. The Office of the Secretary is conducting a detailed review
    of the role of DHS overseas, including the management structure that
    best advances the full range of the international liaison, enforcement,
    inspection and services missions of the Department.

                   Citizenship and Immigration Services (CIS)

                             BACKLOG REDUCTION PLAN

        Question. What is the current size of the application backlog?
        Answer. Information on the current backlog and USCIS plans to
    eliminate it will be provided to Congress in the coming months in a
    revised Backlog Elimination Plan.
        Question. How does CIS define and determine the size of the backlog
    of applications?
        Answer. In developing the revised Backlog Elimination Plan, USCIS
    is reviewing how it defines and thus quantifies the backlog.
    Information on the current backlog and USCIS plans to eliminate it will
    be provided to Congress in the coming months in a revised Backlog
    Elimination Plan.
        Question. What impact is the reduction in fee receipts currently
    being experienced by CIS having on your ability to reduce the
    application processing backlog? Answer. While it is true that overall
    fee revenues are lower so far this fiscal year, this is due to a
    decrease in new applications received. Thus, even though fee revenue
    thus far this year is lower, it is important to note that workload is
    lower, too--thus enabling us to better focus on backlog cases.
        Question. Last week the Department announced the settlement of the
    Catholic Social Services and Newman Legalization cases. What is the
    estimate of the potential number of applications that will be filed as
    a result of these settlements, and will those applications have any
    impact on CIS's ability to reduce the backlog?
        Answer. There is no way of predicting exactly how many people will
    be able to apply during this new application period. However, many of
    the possibly impacted individuals were also eligible to apply for two
    previous programs set up by the legacy INS--the Questionnaire Program
    and the LIFE Legalization program.
        It is expected that many applicants who may be eligible to apply
    for this new proposed settlement program did actually apply under the
    other programs and may have applications already being processed.
        So, since the total number who applied under those two programs
    COMBINED is approximately 70,000--there is a good possibility that the
    number of applicants who come forward with this latest program will be
    less than 70,000.

                              GUEST WORKER PROGRAM

        Question. While it is difficult to answer this question so early in
    the process: how long do you anticipate it will take CIS to have a
    Guest Worker program up and running after legislation is passed and
    signed into law?
        Answer. You are correct. It is difficult to answer this question.
    The complexity of the final legislation that Congress passes will, in
    turn, determine the complexity of implementing the program and any
    subsequent regulations and field guidance that will need to be written
    to support the plan. However, the key to processing temporary worker
    petitions quickly and efficiently will be simplicity in the design of
    the legislation.
        Question. What impact will the addition of a Guest Worker Program
    have on CIS's ability to reduce the application backlog? Answer. We
    will meet the President's backlog reduction goals by 2006. As stated
    above, the key to processing temporary worker petitions quickly and
    efficiently is simplicity in the design. Based upon the legislation
    that Congress passes, we will use fees to support applicant processing
    and documentation.

                                REFUGEE SERVICES

        Question. Since fiscal year 2001, we have seen a dramatic decrease
    in the number of refugee admissions. In fiscal year 2001, the U.S.
    Government admitted over 69,000 refugees from around the world, while
    last fiscal year, only 28,000 refugees were admitted to the United
    States. The ceiling was 70,000 admissions for fiscal year 2003. It is
    very important that we ensure that the employees involved with Refugee
    screening are kept safe, and that we are diligently screening those
    refugees that are eligible for admission. What is CIS doing to ensure
    that all qualified refugees are being screened and admitted to the
    United States?
        Answer. USCIS is committed to steadfast resettlement of refugees in
    need. The terrorist attacks of September 11, 2001 prompted significant
    and more time-consuming changes in U.S. Refugee Program (USRP)
    processing procedures. Increased attention is now being given to more
    carefully screening applicants and more closely scrutinizing overseas
    refugee processing sites to ensure the safety and security of our
    officers. These procedural changes have enhanced the U.S. Government's
    ability to prevent terrorists and other undesirable persons from using
    the USRP to gain entry into the United States. However, they have also
    slowed the pace of overseas processing and, in turn, contributed to the
    reduction in refugee admissions. To address this, the USCIS is working
    to improve and streamline refugee screening, security checks and
    interview methods. USCIS is also working with the other implementing
    partners to expand access to the USRP by identifying new groups
    eligible for resettlement consideration. Consequently, from a low point
    of 27,113 total admissions in fiscal year 2002, the Department of State
    projects that admissions in fiscal year 2004 will significantly surpass
    this figure.
        Finally, USCIS has recently received resources through the revised
    fee schedule to establish a Refugee Corps in fiscal year 2004. This
    cadre of refugee-dedicated adjudicators will divide their time between
    Headquarters and the various overseas processing sites. This will
    result in a stronger and more effective overseas refugee-processing
    program without compromising the USRP's humanitarian objectives. A
    Refugee Corps will also help ensure more timely and satisfactory DHS
    responsiveness to USRP commitments and admissions goals.
        Question. The submitted testimony for CIS mentioned plans for the
    formal establishment of a Refugee Corps. Please explain when you plan
    to have this accomplished, what the expected annual costs will be, how
    many people will be assigned to this Corps, and what goals and
    objectives the program will have.
        Answer. The establishment of a dedicated refugee corps is funded
    through the recently announced fee adjustments. These fee adjustments
    took effect on April 30, 2004. Implementation of the refugee corps will
    take place shortly thereafter. This new structural and functional
    arrangement will greatly improve the quality of refugee adjudications
    and oversight, provide cost-effective immigration services, and
    significantly improve the Nation's ability to secure our borders
    without compromising humanitarian objectives. USCIS anticipates fee
    revenues will fund 109 positions at an annual cost of $18.5 million.
        Question. How will the Refugee Corps work with the ICE's Overseas
    Visa Security Units and U.S. Consulates?
        Answer. The refugee-dedicated resources of the Refugee Corps, as
    supported and deployed by USCIS will work closely with Immigration and
    Customs Enforcement (ICE) overseas offices and U.S. Consulates on a
    variety of refugee application fraud and security matters. For example,
    the overseas ICE offices will assist deployed Refugee Corps
    adjudicators in developing and implementing various refugee fraud
    detection and deterrence methods. While at overseas refugee processing
    locations, the Refugee Corps will, in turn, refer emergent fraudulent
    refugee cases and cases having national security interest to ICE for
    advice and possible investigation, as appropriate. The Corps will also
    coordinate security check results such as Consular Lookout and Support
    System (CLASS) and Security Advisory Opinions (SAOs) with ICE offices
    and U.S. Consulates, as needed; and engage in mutual information-
    sharing regarding refugee applicant civil registry documents and other
    documentation to insure their validity and legality. Finally, the
    Refugee Corps will work with ICE overseas offices and other U.S.
    Embassy components to investigate and approve overseas refugee
    processing sites thereby helping ensure the safety, security and health
    of Refugee Corps adjudicators.

                                 BENEFIT FRAUD

        Question. The President's Budget proposes to replace the funds
    provided to ICE for benefit fraud from the Examinations Fee Account,
    with appropriated dollars. What resources does CIS plan to devote to
    benefit fraud in fiscal year 2005?
        Answer. USCIS is currently reviewing all of its business processes
    as a part of the revised backlog elimination plan. Therefore, the
    funding to support benefit fraud responsibilities in 2005 is under
    review.
        Question. What will CIS use the $25 million in Examinations Fee
    Account funds for that it will retain in fiscal year 2005?
        Answer. USCIS is currently reviewing all of its business processes
    as a part of the revised backlog elimination plan. Therefore, the
    funding to support benefit fraud responsibilities in 2005 is under
    review.
        Question. How many benefit fraud cases were investigated and
    prosecuted in each of fiscal years 1998-2003? How many defendants were
    involved in each of the cases in each year?
        Answer: Statistical Response:

    ----------------------------------------------------------------------------------------------------------------
                                                   Cases
               Fiscal year           --------------------------------   Principals        Aliens        Defendants
                                          Opened         Completed       Involved        Involved       Prosecuted
    ----------------------------------------------------------------------------------------------------------------
    2003............................           2,522           2,031             932           1,885             213
    2002............................           1,932           1,919             258             383             994
    2001............................           2,613           2,662             655             927             185
    2000............................           3,140           2,965             532           3,009             189
    1999............................           5,315           3,648             706           1,705             252
    1998............................           4,311           3,802             639             944             283
    ----------------------------------------------------------------------------------------------------------------

        The table above reflects the best available benefit fraud
    statistics historically collected by the former INS. Some of the
    statistics reflecting closed cases relate to cases opened in a previous
    year.
        Question. Of the applications that you receive annually, what is
    the total estimated size of the fraud problem, by type of fraud?
        Answer. GAO's January 2002 report on immigration benefit fraud
    States that, ``Although the extent of the benefit fraud problem is not
    known, internal and external reports indicate that the problem is
    pervasive and significant.'' There is no current estimate of the fraud
    problem.

                                  CITIZENSHIP

        Question. Please give the Committee a fuller understanding of why
    today there is not uniformity across the country in the administration
    of the current citizenship test.
        Answer. The lack of uniformity actually dates back to 1790, when
    the first Congress entrusted naturalization to the courts and let them
    prescribe their own rules. From 1926-1990, the courts and INS shared
    responsibility for naturalization processing. In 1936, INS directed
    examiners to use uniform procedures and to determine applicants'
    character and attitude towards the United States rather than testing
    ability to memorize facts and phrases. The Immigration Act of 1990 gave
    INS full responsibility for naturalization adjudication.
        In 2000, INS issued a policy memorandum to its field offices to
    standardize certain aspects of the testing process, such as which
    sources officers should use when selecting test questions, the length
    of the test, and passing scores. In 2001, INS awarded a contract to a
    testing development company to assist it in the overall redesign of the
    testing process. This project includes defining appropriate assessment
    content and standards for the speaking, reading, writing, and U.S.
    history and government tests; and developing a revised test process,
    including test specifications/item content, item formats, equivalent
    forms, appropriate delivery systems, scoring rules, and administration
    procedures. It's important to not rush standardization at the expense
    of creating a reliable, valid and fair test.
        We are moving forward on all of these related goals. We completed a
    pilot test of revised English test items (reading, writing and
    speaking) in 2003. This year, we plan to finalize revised U.S. history
    and government content; conduct studies including test format, and test
    administration mode; and begin a pilot test of the complete revised
    English, U.S. history and government test. We also have asked the
    National Academies of Science to provide us with advice concerning the
    reliability, validity and fairness of the proposed changes to the test.
    These steps are all vital to ensuring that our revised test will meet
    these requirements.
        Question. Please provide a more detailed explanation of what the
    Office of Citizenship is working on.
        Answer. Established by the Homeland Security Act of 2002, the
    Office of Citizenship is responsible for promoting public awareness of
    the rights and responsibilities of citizenship. Specifically, the
    mandate of this office is to promote civic integration of immigrants
    through training and development of educational materials.
        The Office of Citizenship is targeting immigrants at two critical
    points on their journey toward citizenship: upon arrival in the United
    States and as they begin the formal naturalization process. The office
    is in the process of developing a ``New Immigrant Orientation Guide''
    which will be presented to the approximately one million immigrants
    welcomed to permanent residence every year. In addition to the guide,
    and in close coordination with community and faith-based based
    organizations, the office will also host new immigrant orientation
    sessions in communities across the country.
        In the citizenship preparation arena, the office will develop new
    educational materials that include study and teacher guides that
    promote a deeper understanding of American history and civics. The
    American history and civics content will be closely coordinated with
    the Department of Education and the ``We the People'' initiative of the
    National Endowment for the Humanities.
        Our office is currently conducting focus groups in key cities
    across the country in order to proactively identify the strengths and
    gaps associated with their immigrant integration and citizenship
    preparation initiatives. Finally, we plan to publish a report of our
    findings in September when we host our first national civic integration
    conference on the theme ``Celebrate Citizenship, Celebrate America.''
        Question. How many people do you plan to have on the staff of the
    Office of Citizenship? Will they all be located in DC or placed around
    the country?
        Answer. The Office of Citizenship is currently staffed by the Chief
    of the Office, two Deputy Chiefs responsible for Program Development
    and Outreach; eight senior Policy Analysts and Outreach Specialists
    working in its DC Headquarters; and 18 Community Liaison Officers in
    the following regional and field offices: Arlington, Atlanta,
    Burlington, Chicago, Dallas, Denver, Detroit, Houston, Los Angeles,
    Laguna Niguel, Miami, New Orleans, New York, Phoenix, Portland, San
    Antonio, San Diego and San Francisco.
        Question. Will the Office of Citizenship work with organizations
    outside of the Department to carry out its mission?
        Answer. In order to fully realize its mandate, the Office of
    Citizenship will work in partnership with Federal, State and local
    agencies, community and faith-based groups and private organizations
    that share an interest in civic engagement and involvement. Community
    Liaison Officers in regional and field offices are primarily
    responsible for establishing this important outreach portfolio and have
    conducted hundreds of community meetings and forums in an effort to
    build robust coalitions and long-term commitments around civic
    integration initiatives. We are currently researching statutory and
    legislative authorities to enhance our ability to partner with the
    private sector.

                         ON-LINE FILING OF APPLICATIONS

        Question. When is the next expansion of the on-line filing of
    benefit applications planned?
        Answer. The next group of forms that will be automated for on-line
    filing is scheduled to complete testing on April 30, 2004 and is
    planned to be available to the public during the first week of May
    2004.
        Question. Which applications do you plan to add next?
        Answer. The group of forms that is planned to be available to the
    public by the first week of May 2004 are:
        Form I-129, Petition for a Nonimmigrant Worker
        Form I-131, Application for Travel Document
        Form I-140, Immigrant Petition for Alien Worker
        Form I-539, Application to Extend/Change Nonimmigrant Status
        Form I-821, Application for Temporary Protected Status
        Form I-907, Request for Premium Processing
        Question. What impact has on-line filing of applications had on the
    processing time of applications?
        Answer. Because receiving the data comprises only a small part of
    the adjudicative process and e-filing is still in its infancy at USCIS,
    e-filing has not yet resulted in significant processing time savings.
    Results will improve as e-filing opportunities are expanded, processes
    are changed to maximize the benefits of e-filing, and USCIS develops an
    IT infrastructure capable of moving complete files electronically. At
    present, e-filing is a customer service initiative with potential for
    significant efficiency gains.
        Question. Has on-line filing helped you to reduce the backlog of
    applications?
        Answer. As indicated above, e-filing, at this time, is primarily a
    customer service initiative that provides our applicants with an
    alternative to filing by mail or filing in person. It allows customers
    to pay their fee on-line via credit card or transfer of funds; and
    provides the applicant with instant evidence of their filing.
    Electronic filing does not decrease the amount of effort or time
    necessary to review an application or render a decision. In the future,
    e-filing will be both a customer service program, as well as an
    efficiency program when USCIS deploys an IT infrastructure capable of
    moving complete files electronically.

                    RELATIONSHIP WITH IMMIGRATION OMBUDSMAN

        Question. In July of 2003, Secretary Tom Ridge appointed Prakash I.
    Khatri to serve as the first Citizenship and Immigration Services
    Ombudsman for the Department of Homeland Security. What is the working
    relationship between CIS and the Ombudsman's office?
        Answer. The Director of USCIS meets periodically in common cause
    with the Ombudsman to discuss issues, his recommendations, and their
    feasibility. The Director established an Office of Customer Management
    Relations (OCRM) led by a career senior executive who reports directly
    to the Director, to provide counsel, access to USCIS operations,
    facilitate the sharing of information, and coordinate responses to
    issues raised by the Ombudsman's Office.
        In addition, numerous field visits have been arranged for the
    Ombudsman in gaining knowledge of operational challenges and in
    collecting ideas from field staff. A collegial relationship is ongoing
    between the two Offices.

                      Customs and Border Protection (CBP)

                               CONTAINER SECURITY

        Question. What achievements has the Department made in increasing
    cargo security? When will the new three-pronged strategy be completely
    implemented?
        Answer. The Department has made significant strides in improving
    cargo security through programs such as the Container Security
    Initiative (CSI), the Customs-Trade Partnership Against Terrorism (C-
    TPAT), Free and Secure Trade (FAST), the National Targeting Center, the
    deployment of non-intrusive inspection technology and radiological
    detection cargo screening technology at our ports of entry. In
    addition, implementation of the 24-hour rule for the transmission of
    cargo manifests has all contributed to improved security in the cargo
    environment.
        Implementation of the three pronged strategy: pushing our borders
    outward; advanced targeting and analysis of cargo and passengers before
    arrival at our borders; and intensive inspection of cargo and
    passengers at our borders is a process. Implementation of this process
    continues through the fiscal year 2005 President's initiatives for the
    Container Security Initiative, the Customs-Trade Partnership Against
    Terrorism, Systems for Targeting, and Radiation and Nuclear Screening
    Technology. Initiatives like these can be expected in the future in
    accord with the level of threat.
        Question. The budget requests over $105 million in enhancements to
    improve the ability of inspectors to target, inspect, and screen
    passengers and cargo at land, air, and sea ports. Having radiation
    monitors and increasing our ability to use computers to target and
    screen cargo and passengers is critical. Are there a sufficient number
    of inspectors on the front lines to handle physical inspections of
    cargo and passengers?
        Answer. With the additional resources provided for in the fiscal
    year 2002 Emergency Supplemental, the fiscal year 2003 appropriation
    and Wartime Supplemental, and the fiscal year 2004 appropriation, as
    well as the joining of the three agencies to form CBP, we believe we
    have adequate staffing to handle physical inspections of current levels
    of cargo and passengers.
        Question. Are there any plans to extend a Container Security
    Initiative-like project to bulk and break-bulk shipments?
        Answer. At this time, CBP is not planning to extend a CSI-like
    project to prescreen bulk and break-bulk shipments. CBP will continue
    to collaborate with the U.S. Coast Guard on vessels of interest and
    certain dangerous cargos at both a national and field level, and
    conduct joint boardings when warranted.

                  CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM

        Question. The budget requests an additional $15 million to expand
    the Customs-Trade Partnership Against Terrorism (C-TPAT). These new
    resources will allow Customs and Border Protection to increase the
    validation process within C-TPAT. According to the submitted testimony,
    221 validations have been completed on 2,926 certified partners. How
    many more validations will CBP be able to complete each year with the
    new resources?
        Answer. To date, over 700 validations have been initiated with over
    240 completed. Our goal for the current calendar year is to have
    completed a total of 400 validations. C-TPAT will continue to increase
    the number of validations performed for calendar year 2005. The
    increase will be guided by several factors including but not limited to
    membership levels, number of supply chain specialists on board, and
    threat level.
        Question. How often does CBP plan to validate each of the
    participants in the program?
        Answer. A C-TPAT participant is selected for validation based on
    risk management principles. Validations may be initiated based on
    import volume, security related anomalies, strategic threat posed by
    geographic regions, participation in expedited release programs, a
    relative sampling of industry sectors (e.g. carriers, brokers,
    forwarders, importers), and/or other risk related information.
    Alternatively, a validation may be performed as a matter of routine
    program oversight.
        Question. None of the 188 initiated validations have been on any of
    the 45 certified foreign manufacturers enrolled. When does CBP plan to
    begin reviewing foreign manufacturers?
        Answer. Foreign manufacturers will be included in the next group of
    C-TPAT validations to be initiated in calendar year 2004.
        Question. What performance measures have been developed to gauge
    the success of the C-TPAT program?
        Answer. Internal measures include program marketing and acceptance,
    which is measured by the number of C-TPAT partners enrolled and
    certified by CBP. The impact of enrollment is measured by identifying
    the percentage of trade controlled by those C-TPAT companies. Another
    internal measure is examination risk management, which involves
    quantifying and measuring the impact C-TPAT has on cargo inspections
    performed on ``known risk'' C-TPAT partners, compared to shipments
    where the risk is unknown or targeted as high.
        External measures include the C-TPAT validation process, which is
    used to verify the participant's supply chain security processes. C-
    TPAT Supply Chain Specialists identify strengths and weaknesses found
    during the validation and recommend action items in the validation
    report. The results of all validations are captured to measure the
    overall performance of validated companies.

                            UNMANNED AERIAL VEHICLES

        Question. The President's budget includes a request for $10 million
    to develop, procure, deploy, and operate a system of unmanned aerial
    vehicles to support the Border Patrol and other components of Customs
    and Border Protection. According to the information we have been given
    regarding the Arizona Border Control Initiative, this project will
    begin in June with funding from the Science and Technology Directorate.
    Are any of CBP's direct funds going to support this effort this fiscal
    year?
        Answer. No. All funding supplied for this effort has been provided
    by the DHS Office of Science and Technology.
        Question. Both the Coast Guard and the Air and Marine program
    within ICE have tested the concept of using unmanned aerial vehicles in
    their operations. Will CBP be working cooperatively with these
    organizations during fiscal year 2005 on this test?
        Answer. BTS and the Science and Technology Directorate co-chair the
    DHS UAV Working Group which meets regularly and consists of BTS
    component and U.S. Coast Guard managers responsible for aviation
    assets. The working group provides a forum for collaboration and with
    the DHS UAV Executive Steering Committee it will ensure that the needs
    of CBP, ICE, TSA and the U.S. Coast Guard are addressed and deployments
    and concepts of operations are coordinated within the DHS.
        Question. What are the long-range plans for the use of UAVs along
    the land border? Will this be a joint program with ICE's Air and Marine
    Office?
        Answer. DHS is exploring new technology to meet aerial border
    security mission requirements. UAVs hold promise in some applications.
    This mission will be supported through a variety of systems. Sensors
    such as TARS, UAVs, rotary and fixed wing aircraft, and ground-based
    equipment and personnel to operate and maintain these systems must be
    coordinated by DHS and Department of Defense components, and aligned
    against the highest critical vulnerabilities and threats. ICE AMO is an
    integral part of the team that is developing and fielding this
    capability.

                       SENSOR AND SURVEILLANCE TECHNOLOGY

        Question. Staff from CBP have informed us that they are currently
    working on a complete review of the sensor and surveillance technology
    currently deployed between the land ports of entry and are developing
    the project plan for the $64 million requested for this effort for
    fiscal year 2005. When will the plan for the fiscal year 2005 resources
    for Sensor and Surveillance Technology be made available to the
    Committee?
        Answer. The appropriations staff will receive a comprehensive
    briefing on our plans for this system and its operational goals that
    reflect the new anti-terrorism mission in the near future.
        Question. When can we expect to have all of the Northern and
    Southern border comprehensively covered by these systems? In fiscal
    year 2006, or beyond that?
        Answer. The appropriations staff will receive a comprehensive
    briefing on our plans for this system and its operational goals that
    reflect the new anti-terrorism mission in the near future.
        Question. What is the total cost of finishing the installation of
    all sensor technology?
        Answer. At this time we are formulating a new strategic plan based
    on the new anti-terrorism priority. More comprehensive information on
    future program direction and requirements will be provided in the near
    future.
        Question. The request for enhanced surveillance technology in this
    budget does not include any resources for additional law enforcement
    communications assistants. If the number of remote video surveillance
    systems is increasing, won't there be a need for more personnel to
    monitor the cameras?
        Answer. The ISIS program does not anticipate a need for additional
    law enforcement communications assistants; we expect that the
    successful integration of proven technologies will provide this real-
    time intelligence directly to the agents in the field. This will reduce
    the need for law enforcement communications assistants to process this
    information.

                        AUTOMATED COMMERCIAL ENVIRONMENT

        Question. CBP has been working on modernizing the information
    technology systems that it uses for some time. The most significant
    project is the Automated Commercial Environment, known as ACE. CBP has
    been working closely to resolve problems with the prime integrator on
    ACE for the last year. Is the project back on track?
        Will the project be completed on time, or does the overall project
    timeline need to be revised and extended?
        Is the project maintaining its projected budget? Is the project
    continuing to experience cost overruns?
        Answer. CBP continues to aggressively work to put ACE capabilities
    to work on America's borders. The first deployment of ACE, completed in
    the winter 2003, focused on the technical infrastructure. It provided
    the foundation for a secure, reliable, high-speed access to critical
    CBP information. The second release of ACE, deployed in summer 2003,
    included an Enterprise Web portal that provides CBP Account Managers
    and selected importers controlled access to information such as the
    account's trade activity, and facilitates collaboration and
    communication among the various groups.
        Subsequent ACE capabilities will be fielded between June 2004 and
    the end of ACE development, which includes; Periodic Payment (Release
    3), e-Manifest Trucks (Release 4), ACE Selectivity Releases, End-to-End
    e-Processing (Release 6), and ACE Wrap-Up (Release 7).
        During the past year, U.S. Customs and Border Protection has worked
    very closely with the e-Customs Partnership (eCP) to address
    performance issues. This includes extensive analysis of the program to
    incorporate process, planning, and organizational enhancements to help
    contain costs and minimize schedule delays. The CBP efforts have also
    included frequent meetings and dialogue with senior executives from
    IBM, the leading eCP partner, to reinforce CBP high standards and
    expectations. The response from IBM leadership has been positive, and
    they have clearly indicated their commitment to the Automated
    Commercial Environment (ACE) project. Meetings with IBM executives
    continue monthly.
        Based on intensified CBP oversight, the current estimated cost
    variance for ACE is within 10 percent of the program baseline. Based on
    benchmarks for similarly complex programs, the program variances are
    within expected boundaries. The CBP continues to conduct cost
    containment activities and have made great strides in improving our
    ability to better forecast variances through Earned Value Management.
    We have incorporated lessons learned into ACE development, including
    improving the requirements definition process, and conducting more
    comprehensive system development gate reviews based on refined
    criteria.
        Though CBP is developing schedule scenarios that result in ACE
    completion dates ranging from 2009 to 2012, no formal change has been
    made to the project schedule. A revised project schedule will be
    published in the June 2004 update of the ACE Program Plan and in the
    fiscal year 2006 OMB Exhibit 300 for ACE after the results of the
    ongoing Global Business Blueprint (defining future CBP business
    processes and the technology requirements) are known.

                            AGRICULTURAL INSPECTIONS

        Question. How has CBP's ``Officer for the Future'' Plan been
    developed to include additional training for the Agriculture Quarantine
    Inspection function?
        Answer. Consistent with the Homeland Security Act and subsequent
    Memorandum of Agreement between USDA and DHS, it was agreed by both DHS
    and USDA that USDA would supervise and provide educational support and
    systems to ensure that DHS employees receive the training necessary to
    carry out the USDA functions transferred to DHS. As a result, USDA has
    linked with DHS in defining training module content specific to the
    agriculture quarantine inspection mission. More specifically:
      --The new hire CBP Officer will receive 12 hours of instruction in a
            course titled Threat to Agriculture covering agriculture
            fundamentals during the basic academy. This course is taught by
            USDA instructors and covers: the importance of U.S.
            agriculture; the impact of introduced pests; the agriculture
            mission; statutory authorities; agricultural bioterrorism;
            safeguarding; and agriculture secondary inspection referrals.
            This training is mandatory.
      --Current CBP Inspectors will receive a CD-ROM version of the same
            course, titled Agriculture Fundamentals, covering the same
            material. This training is mandatory for CBP Inspectors and
            when issued to the field, will be completed within 120 days.
      --A second component of mandatory agriculture quarantine inspection
            training, titled Agriculture Procedures, will be developed over
            the next few months by USDA and DHS. This mandatory course will
            be taken by both the new hire CBP Officer and current CBP
            Inspectors. USDA will direct course content and course delivery
            will be conducted by DHS.
        Question. What specific actions are being taken to train Customs
    and Border Protection officers to detect potential illegal contraband
    that may pose a risk of introducing a foreign animal disease into the
    United States? Do you believe that this training is sufficient to
    inform officers about the threats and potential damage, economic and
    otherwise, to a huge sector of the U.S. economy that foreign animal
    diseases pose?
        Answer. All new hire CBP Officers are required to receive the USDA-
    instructed course, Threats to Agriculture, while at the CBP Academy.
    Current CBP Inspectors are required to take the same course, in a CD-
    ROM format. The course was designed by USDA and includes an overview of
    foreign animal diseases, including vectors, fomites, and impacts of the
    diseases. The next phase of training, yet to be developed by USDA and
    DHS, is the Agriculture Procedures course, which will provide more
    specific training in the Agriculture Quarantine Inspection arena,
    including additional training on foreign animal diseases.
        Question. How many CBP Officers have completed the 12 to 16 hours
    of Agriculture Quarantine Inspection training required to be a fully
    certified CBP officer?
        Answer. The number of hours of required (mandatory) training for
    the CBP Officers is still not determined as the second component of
    training, Agriculture Procedures, is not yet developed. The new hire
    CBP Officers receive a total of 12 hours of training conducted by USDA
    at the CBP Academy during their basic training. Current CBP Inspectors
    will receive the same course as the new hire, but it will be delivered
    in an electronic, CD-ROM format. All CBP Inspectors will be required to
    take this course within 120 days of field delivery. The intent of this
    training is to have the CBP non-agriculture workforce begin their
    agriculture curricula from the same starting point. From October 2003
    through April 13, 2004, a total of 823 CBP Officers have completed the
    12-hour portion at the CBP Academy.
        Question. What is the status of the former U.S. Department of
    Agriculture Inspectors that were transferred to the Department of
    Homeland Security in the middle of last year?
        Answer. The former USDA Agriculture Inspectors have been placed
    into a newly defined position description, the CBP Agriculture
    Specialist. This position is in the 401 series with a full performance
    level at the GS-11 level. The full performance level for the PPQ
    Officer was a GS-9. The new duties incorporated in that position
    description include:
      --serving as an expert and technical consultant in the areas of
            inspection, intelligence, analysis, examination, and law
            enforcement activities related to the importation of
            agricultural/commercial commodities and conveyances;
      --applying a wide range of laws and regulations determining the
            admissibility of agriculture commodities while preventing the
            introduction of harmful pests, diseases, and potential agro-
            terrorism into the United States;
      --participating in special enforcement, targeting, or analysis teams
            charged with collecting and analyzing information and
            identifying high-risk targets;
      --conducting visual and physical inspections of cargo, conveyances,
            or passenger baggage;
      --planning, conducting, and supervising remedial actions;
      --participating in pre-arrival risk analysis; and
      --serving as a training officer.

                   Immigration and Customs Enforcement (ICE)

                              WORKSITE ENFORCEMENT

        Question. Please provide a chart with the total resources, FTE and
    dollars, devoted to worksite enforcement for each of fiscal years 1998-
    2003.
        Answer. The worksite enforcement budget has always been part of the
    base budget and has not been separately tracked. The FTE are provided
    in the chart below.

    ----------------------------------------------------------------------------------------------------------------
               Fiscal year                 1999            2000            2001            2002            2003
    ----------------------------------------------------------------------------------------------------------------
    FTE Source: PAS.................             278             202             134             152             105
    ----------------------------------------------------------------------------------------------------------------

                               VISA SECURITY UNIT

        Question. The President's budget requests an increase of $10
    million to support the Visa Security Unit. According to the budget,
    this unit was established in fiscal year 2003, but is receiving its
    current year funding from outside of ICE. Where is the funding for the
    Visa Security Unit coming from for fiscal year 2004?
        Answer. The Visa Security Program for fiscal year 2004 was an
    unfunded mandate and ICE resources were used for the current TDY
    deployment to Saudi Arabia of Visa Security Officers. The BTS
    Directorate will be seeking reprogramming authority to address funding
    requirements for sustainment of the Saudi deployment and expansion to
    four other countries in fiscal year 2004. Financial support for this
    Presidential priority will be from ICE and CBP operational funding.
        Question. How many personnel have been hired for this program to
    date?
        Answer. No staff have been hired for this program to date. The
    program has been operating with detailees at headquarters and in Saudi
    Arabia.
        Question. What is the expected staffing level for end of fiscal
    year 2004?
        Answer. The Saudi deployment would be 6 officers and ICE
    Headquarters would have 10 at the end of fiscal year 2004.
        Question. How many of the personnel in this program will be
    stationed overseas?
        Answer. As of April 30, 2004, there are 4 Visa Security Officers in
    Saudi Arabia. New rotations are planned for the departing officers.
        Question. What performance measures have been developed to gauge
    the success of this program?
        Answer. One of the key issues in the development of the Visa
    Security Program is assuring that measures can be identified that
    properly attribute the added value of DHS in the visa process. Measures
    include the following: number of visa applications reviewed by DHS
    officers; number referred for investigation and further analysis; and
    numbers approved and denied in consultation with the Department of
    State.

                 REDIRECTING THE BASE--OFFICE OF INVESTIGATIONS

        Question. The President's Budget proposes important changes to the
    funding of the Office of Investigations within ICE. The budget proposes
    to replace $25 million in funding from the Examinations Fee Account
    that currently funds benefit fraud with appropriated dollars. The
    budget also proposes moving the responsibility for the Institutional
    Removal Program from the Office of Investigations to the Detention and
    Removals Program, but leaves the base funding within the Office of
    Investigations. Why should appropriated dollars replace mandatory
    dollars for benefit fraud?
        Answer. The appropriated funds are requested for benefit fraud
    investigations. The shift will allow the examinations fee to be used
    solely for immigration services and provide appropriated resources for
    enforcement activities. With respect to the institutional removal
    program, the demands for Detention and Removal have increased
    substantially and been met by investigators, which has had a negative
    impact on the investigation program. The request provides less
    expensive and more appropriate personnel resources to the Detention and
    Removal Program, while at the same time preserving the original intent
    and capacity requirements for the Office of Investigations.
        Question. Will this shift increase the total resources devoted to
    benefit fraud?
        Answer. The approval of $25 million in appropriated funds would not
    increase the resources devoted to benefits fraud but simply replace
    funds previously provided from the Examinations Fee. These funds
    provide the resources for approximately 140 existing ICE positions and
    operational expenses. These resources enable ICE to maintain its
    investigations of benefit fraud organizations and egregious fraud
    violators.
        Question. Under the budget proposal, the base funding for the
    Institutional Removal Program remains within the Office of
    Investigations. What investigative priorities will these resources be
    redirected to?
        Answer. The fiscal year 2005 request is a result of a planned
    realignment of the Institutional Removal Program (IRP) from OI to DRO.
    Managing and executing the program in one office will prove more
    effective and productive than in its current bifurcated state. Special
    Agents within OI that will be freed up from IRP work they currently
    perform will be able to dedicate much-needed investigative hours to
    public safety and national security cases. There are renewed demands
    for investigation of non-incarcerated criminal aliens and violent gang
    enforcement.

                         LAW ENFORCEMENT SUPPORT CENTER

        Question. What are the base resources, FTE and dollars, for the Law
    Enforcement Support Center (LESC) for fiscal year 2004? What are the
    requested resources for the LESC for fiscal year 2005?
        Answer. General expense funding for fiscal year 2004 is budgeted at
    $1.9 million, which includes $869,000 from the War Supplemental. In
    fiscal year 2004, there are 287 positions authorized, of which 9 are
    currently vacant. No increases are anticipated for fiscal year 2005.
        Question. It is the Committee's understanding that there are
    approximately $5 million in facility improvements that are needed at
    the LESC. Is this accurate? If, yes please provide the Committee with
    an itemized list for the $5 million.
        Answer. Due to increased law enforcement inquiry workload and the
    projected growth in the NCIC program, the LESC submitted an out-of-
    cycle space request for 80,309 additional sq. ft of expanded facility
    space at the LESC's present location in January 2002. That request was
    subsequently approved and the one-time costs of $3.7 million associated
    with expansion were approved and transferred to GSA.
        Since the submission of the space request in January 2002, the
    LESC's core workload has grown from 240,000 queries to a projected
    744,000 queries per year in 2004. Additionally since establishment of
    DHS and ICE, the LESC has taken on new, critical law enforcement tasks.
    This growth combined with new tasks exceeded the projected growth that
    was the basis of the original space request. Additionally, once the
    80,000-sq. ft. expansion is completed, the current LESC site would not
    allow for any additional facility expansion. The constraints of the
    current site would eventually drive the LESC into a multi-site
    operation to continue to expand workload and mission. For these and
    other reasons, including physical security concerns, it was determined
    not to proceed with the 80,000 sq. ft. addition, but instead pursue a
    larger, more secure site that would not limit future expansion or the
    LESC mission and ability to perform its important law enforcement work.
        The $3.7 million transferred to GSA to fund the one-time costs
    associated with the addition is on account with GSA for 5 years and can
    be used at another LESC site or facility. That amount is in addition to
    approximately $1.5 million that was previously on account with GSA for
    internal reconfigurations at the current site for a total of
    approximately $5.2 million that is available for LESC facility
    expansion and improvement.
        The LESC has completed necessary improvements at the current site.
    Planning for a larger facility that will meet all of the current and
    future physical infrastructure needs of the LESC's expanding workload
    and mission is ongoing.

                             DETENTION AND REMOVALS

        Question. The budget requests $5 million for additional detention
    bedspace. What percentage increase in additional bedspace will this
    provide?
        Answer. Approximately 150 beds or less than 1 percent of current
    bed space.
        Question. Given the increased level of resources that the budget
    proposes to devote to enforcement, as well as the increased vigilance
    that US VISIT allows at ports of entry, are enough resources being put
    towards detention?
        Answer. DRO is currently funded for approximately 20,000 beds.
        Question. Will ICE be working with the U.S. Department of Justice,
    Detention Trustee, where appropriate, in the management of the
    detention program? Has a Memorandum of Understanding been signed with
    the Department of Justice?
        Answer. Yes, DRO is working with DOJ, Office of the Federal
    Detention Trustee (OFDT) in the management of the detention program. A
    memorandum of understanding was signed with the Justice Department on
    1/28/2004.
        Question. How is the relationship with the Department of Justice
    structured? Who will be responsible for procurement and contracting?
        Answer. ICE and the OFDT signed an Inter-Agency Agreement on 1/28/
    2004. The agreement establishes OFDT as a procurement service provider
    to ICE for non-Federal detention requirements. Since establishment of
    the agreement, ICE and OFDT have made substantial progress toward fully
    implementing the service provider relationship. ICE has identified 5
    non-Federal secure detention requirements for procurement action by
    OFDT and both entities are cooperating to establish a schedule for the
    transition of ICE inter-governmental service agreements and
    administration of the non-Federal detention inspection program to OFDT.

                              FUGITIVE OPERATIONS

        Question. The President's budget requests an increase of $50
    million to create an additional 30 fugitive operations teams. It is
    estimated that each of these teams will be able to apprehend and remove
    up to 500 fugitive aliens a year. Of the approximately 400,000
    absconders, how are you prioritizing which fugitives you pursue first?
        Answer. National Security and criminal cases are the highest
    priority, then cases that have a higher probability of removal, and
    other non-criminal aliens. There are several initiatives being
    implemented to help identify and locate our absconder population. ICE
    has implemented an interface between ICE and CBP systems that
    identifies fugitives when they return to the United States. Inspectors
    will now be alerted when an ``absconder'' is identified at a port of
    entry.
        DRO entered into an agreement with Citizenship and Immigration
    Services whereby DRO is notified when an alien applies for benefits and
    is identified as an absconder. In these cases, CIS provides us with the
    most current information such as home address.
        Question. Based on the information provided in the budget, once
    additional fugitive operations teams are fully deployed, ICE will be
    able to locate and remove 23,000 aliens a year. Your testimony states
    that the national Fugitive Operations program strategy calls for
    eliminating the backlog of absconders in 6 years. Removal of 23,000
    aliens a year for 6 years does not quite add up to 400,000. How will
    ICE accomplish this goal?
        Answer. Our strategic plan ``Endgame'' calls for the elimination of
    the fugitive backlog within 10 years based on significant increases in
    the fugitive program. This will require 300 teams over that time
    period.
        We are also implementing new initiatives targeting data integrity.
    Through data dumps and systems analysis we are removing cases that are
    incorrectly identified as fugitives (Self Deport, Benefits granted,
    etc.)

                           ALTERNATIVES TO DETENTION

        Question. What are the results so far of the Alternatives to
    Detention program?
        Answer. DRO began utilizing alternatives to detention, or community
    based programs, in August 2002, with the opening of a community based
    residential program for 250 non-criminal females that were previously
    held in a local jail in South Florida.
        DRO began testing the applicability of electronic monitoring
    devices (EMDs) in May 2003 in six Field Offices (Anchorage, Miami,
    Detroit, Portland, Seattle, & Chicago). Traditional EMDs have been
    utilized with just over 100 illegal aliens as an alternative to secure
    detention. Supervision of these cases was initially conducted as a
    collateral duty and was found to be very staff intensive. Efforts are
    underway to integrate the traditional EMD house arrest program into the
    Intensive Supervision Appearance Program (see below). Telephonic or
    administrative reporting technology has been utilized as an automated
    reporting device for just over 500 aliens that are living in the
    community on Orders of Supervision. This technology has the potential
    to assist DRO in effective case management. A summary report on the use
    of these two technologies will be completed after 1 year of the pilot.
    Additionally, DRO and the Federal Protective Service (FPS) are
    exploring the possibility of utilizing FPS for monitoring of the EMD
    program technology, currently being provided through a contract with an
    EMD provider.
        Pursuant to the Zadvydas v. Davis Supreme Court decision, there are
    presently a significant number of Post Order Custody Review (POCR)
    cases that are eligible for release, but are in need of rehabilitation
    programs for substance abuse, mental health, anger management, sex
    offender, etc. In September 2003, as an Alternative to Detention
    initiative, a Condition of Release Program for POCR cases was developed
    through our existing reimbursement agreement with the Division of
    Immigration Health Services (DIHS). Through this Program, DIHS will
    review POCR cases, and identify rehabilitative programs. As of March
    2004, 53 POCR cases have been forwarded to DIHS for review and program
    placement.
        DRO recently announced the contract award selection of Behavioral
    Interventions, Inc. (BI) of Boulder Colorado for the provision of
    community-based supervision of 200 aliens in each of the following
    eight Field Offices: Baltimore, Philadelphia, Miami, St. Paul, Denver,
    Kansas City, San Francisco, and Portland. The program is designed to
    supervise aliens that can be released into the community to ensure
    their attendance at Immigration Court hearings and compliance with
    Court orders.
        The contractor will provide Intensive Supervision Appearance
    Programs (ISAP) services for 200 aliens in the initial eight sites
    during fiscal year 2005. ICE plans to expand the initial capacity to
    400, and to add one additional site with a capacity of 200.
        Question. What is necessary, besides just more funding, to see a
    larger scale implementation of this alternatives program?
        Answer. While community based sanctions has been utilized for over
    30 years by the criminal justice system with proven results, there has
    been very little application or research on these types of services for
    illegal aliens. Staff, program research and development resources are
    necessary to determine if these pilot programs would be effective with
    illegal aliens and to develop replication models for expansion.

                              FEDERAL AIR MARSHALS

        Question. The budget request for the Federal Air Marshal Program
    (FAMS) does not include any funds to provide pay raises, within-grade
    increases, or any other adjustments to base in fiscal year 2005. What
    resources are necessary to provide the FAMS with the same adjustments
    to base as the other components within ICE as well as the Department of
    Homeland Security? Please provide an itemized list of the necessary
    adjustments to base for the FAMS.
        Answer. The FAMS and DHS are working to determine how best to
    manage FAMS' resources. FAMS is developing performance-based measures
    that will determine the optimal number of Federal air marshals and
    resources to provide the necessary aviation security.
        Question. What impact will the fiscal year 2005 President's budget
    request have on staffing within FAMS as compared to fiscal year 2004?
        Answer. The FAMS will adjust its staffing as necessary to meet its
    highest priority missions with available resources. In doing so, the
    FAMS will consider other enhancements within the aviation security
    system.
        Question. Previously, there has been a problem with retention of
    FAMS. What is the current attrition rate as compared to that in
    previous years?
        Answer. Since the start of the fiscal year 2004, Federal Air
    Marshal attrition has been roughly 9.4 employees per pay period. This
    attrition rate is down significantly from the fiscal year 2003 level,
    when the Service's attrition averaged approximately 33 per month. In
    turn, the fiscal year 2003 rate was well below the roughly 58 Federal
    Air Marshals lost per month during the last quarter of fiscal year
    2002. Although the FAMS' attrition rate remains in flux, the reduced
    number of employees leaving the program is attributed to the progress
    made towards completing the FAMS' stand up, stabilizing the workforce,
    implementing quality of work life initiatives, and otherwise working to
    improve procedures and management systems to encourage employee
    retention.

               AIR AND MARINE OPERATIONS--NORTHERN BORDER AIRWING

        Question. The Air and Marine Operations program has been stretched
    very thin for the last 2 years. Long-term repetitive details of
    personnel and assets are being used to protect the Northern Border and
    the National Capital Region. The appropriation for fiscal year 2004
    includes resources for the establishment of a permanent Northern Border
    Airwing. What is the status of establishing the permanent Northern
    Border airwing funded for fiscal year 2004?
        Answer. The fiscal year 2003 War Supplemental provided $20.5
    million to launch the Bellingham Air Branch, the first of five Northern
    Border Branches. Planned allocation is as follows: $2.5 million for
    personnel transfers, $12.6 million for medium lift helicopter
    acquisition and $6.6 million for multi-role enforcement aircraft.
    Staffing will be provided through a combination of new hires and the
    transfer of experienced personnel from other AMO field locations.
        In fiscal year 2004, AMO received $35.2 million in Operations and
    Maintenance (O&M) funding to launch AMO's Northern Border Branch in
    Plattsburgh, NY. Planned allocation is as follows: $10 million for
    medium lift helicopter acquisition and $6.6 million for multi-role
    enforcement aircraft, $9.7 million for facility and $2.7 million for
    aircraft spares. An additional $5.4 million was appropriated in
    Salaries and Expenses funding to cover the cost of 36 personnel.
        Plattsburgh and Bellingham each will be equipped with three
    aircraft, including one Multi-Role Enforcement Aircraft (Pilatus PC-12
    fixed-wing), one Medium Lift Helicopter and one Light Enforcement
    Helicopter.
        The President's fiscal year 2005 budget includes $35.2 million to
    launch the third Northern Border Branch.
      --The funds from these two appropriations were combined to purchase
            one medium lift helicopter.
        Question. How has the recently announced hiring freeze affected the
    Northern Border airwing?
        Answer. The recently announced hiring freeze did not affect our
    build-up of the Northern Border air wing.
        Question. When will the aircraft and other equipment be procured?
        Answer. The procurement process has already begun for the aircraft
    and other equipment. The four AS-350 A-Star helicopters are scheduled
    to be delivered during the June-December 2004 timeframe. Taking into
    consideration the 120-day communication and sensor installation
    process, the first operational helicopter will be delivered in October
    2004 with follow-on delivery of the remaining 3 helicopters at 1 every
    60 days.
        The first PC-12 (Multi-Role Enforcement Aircraft) is scheduled for
    delivery during May 2004. The second aircraft is scheduled for delivery
    October 2004. Both aircraft will be configured with the Wescam
    Integrated Situation Awareness Display System (ISADS) electro optic/
    infrared.
        Question. Even with the establishment of this airwing, to what
    extent will ICE still have to rely on detailees to cover the Northern
    Border and the National Capital Region?
        Answer. The Northern Border will have to rely on detailee
    augmentation during surge operations or designated heightened alert
    postures.
        We are currently maintaining the NCR Branch primarily through the
    use of rotational detailee assignments. We are requiring aviation
    personnel to travel on a temporary duty status, as well as, the
    redeployment of aircraft from southern border locations to the
    Washington, D.C. area in order to provide on-going mission critical
    support. All costs for that operation have been covered using Air and
    Marine Operations fiscal year 2004 Operations and Maintenance funding.

                                LONG-RANGE RADAR

        Question. What is the total amount that the Federal Aviation
    Administration (FAA) has in its fiscal year 2004 budget for operating
    the Long-Range radar system?
        Answer. Questions regarding FAA's distinct budget line items should
    be addressed to the FAA.
        Question. How much is being requested by other agencies for fiscal
    year 2005 for the Long-Range radar system?
        Answer. The Long-Range Radar (LRR) funding, a new fiscal year 2005
    line item to help fund the FAA radar system that feeds information to
    the AMOC, is a $12.5 million increase to the AMO base, ``other
    services'' line item.
        Question. Why are new resources being requested in the fiscal year
    2005 budget to allow the Department to pay the FAA for this service, as
    opposed to a transfer from the FAA budget?
        Answer. FAA has indicated recently that to continue to maintain and
    operate this system as mandated in past Federal legislation, it would
    need to start charging user agencies for the data.

                         TETHERED AEROSTAT RADAR SYSTEM

        Question. The information provided by the Tethered Aerostat Radar
    System (TARS), known as TARS, is a critical component in the
    Department's efforts to interdict illicit air traffickers. Do you
    believe that the Department of the Defense is providing sufficient
    support to the TARS program to enable the Air and Marine Program to
    effectively carry out its mission?
        Answer. The TARS program has declined from 14 operational sites to
    8 operational sites (Lajas, Puerto Rico, is due back on-line in May
    2004). Questions regarding costs for operating these sites should be
    addressed to DOD, which maintains and operates the system. AMO is an
    end user of the data provided by these valuable national assets.
        Question. Is the Department of Homeland Security working with the
    Department of Defense to ensure proper maintenance and upgrades of
    TARS?
        Answer. AMO is currently working closely with all the agencies
    involved in the counter-narcotics and border security missions,
    including USIC, ONDCP, DOD, and DHS to communicate the requirements for
    the continued use of the TARS. Recent close coordination and meetings
    between the Department of Homeland Security and the Deputy Assistant of
    Defense for Counter Narcotics have resulted in frank and open
    discussions related to TARS. The dialogue is productive and ongoing at
    this time, and DHS' requirements have been acknowledged by DOD.
        Question. Does ICE have the necessary expertise and personnel to
    take over the management and maintenance of the TARS program?
        Answer. TARS is now under the purview of DOD and should be operated
    in line with DHS operational needs.
        Question. What is the estimated funding needed for ICE to assume
    management of the TARS program?
        Answer. TARS is now under the purview of DOD and should be operated
    in line with DHS operational needs.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd

                      Citizenship and Immigration Services

                     IMPACT OF THE PRESIDENT'S REFORM PLAN

        Question. How many new petitions do you expect the President's
    Immigration Reform Plan to generate?
        Answer. This information will be available once Congress has
    drafted the legislation and the specifics are known.

                       MACHINE-READABLE PASSPORT DEADLINE

        Background: The Enhanced Border Security and Visa Entry Reform Act
    of 2002, which President Bush signed into law on May 14, 2002,
    established October 26, 2004, as the deadline by which the 27 existing
    ``visa waiver'' countries must have machine readable visas in order for
    their citizens to enter the United States. Last week, Secretaries Ridge
    and Powell sent a letter to various Congressional leaders urging that
    the October 26, 2004 deadline be pushed back to December, 2006. The
    countries which would be affected by this law have had nearly 2 years
    to comply with this requirement. This is not something new which we
    just pulled out of thin air.
        I understand that certain lobbying organizations, such as the
    Travel Industry Association of America, have praised this proposed
    delay in the deadline. However, I predicted this outcome when the
    Enhanced Border Security Act was on the Senate floor.
        We know that terrorists have attempted to gain entry to the United
    States through the visa waiver program. The December 2001 ``shoe
    bomber'', Richard Reid, benefited from attempting to come to the United
    States from a ``visa waiver'' country. We know that tens of thousands
    of passports from visa waiver countries have been stolen in recent
    years and sold on the black market. We know that machine-readable
    passports can help to filter potential terrorists who try to enter the
    United States through the visa waiver program. I do not want to
    discourage legitimate tourists and other travelers from coming to visit
    our country, but border security must remain one of the Department's
    paramount priorities. The law was passed nearly 2 years ago. There has
    been ample time for the Administration to work with the visa waiver
    countries in meeting this deadline. The Administration's job was to get
    these countries to meet the requirements of the law.
        Question. How is it in the interest of our domestic security to
    push back even further the deadline requiring machine-readable
    passports from visa waiver countries? What steps did the Administration
    take over the last 2 years to ensure that visa waiver countries would
    be able to meet the deadline?
        Answer: The EBSVERA requires that beginning on October 26, 2004,
    Visa Waiver Program (VWP) countries must certify that they have a
    program in place to issue their nationals machine-readable passports
    that are tamper-resistant and incorporate biometric and document
    authentication identifiers that comply with International Civil
    Aviation Organization (ICAO) standards in order to continue to
    participate in the VWP. The law also requires that visitors coming to
    the United States under the VWP present machine-readable, tamper-
    resistant passports that incorporate biometric and document
    authentication identifiers, if the passports is issued on or after
    October 26, 2004.
        While most, if not all, VWP countries will be able to certify that
    they have a program in place to issue biometric passports by the
    October deadline, very few, if any, VWP countries will actually be able
    to begin issuing biometric passports by that date. The issue is not
    lack of will or commitment to achieving the standard by these
    countries, but rather challenging scientific and technical issues. For
    the same challenging technical reasons, DHS is also not currently in a
    position to acquire and deploy equipment and software to biometrically
    compare and authenticate these documents. It is not in any country's
    interest, including our domestic security interest, to produce or
    accept biometric passports with questionable standards and an immature
    biometric technology.
        DHS is encouraged by the progress that has been made by VWP
    countries to meet the emerging ICAO standards. We believe that by the
    fall of 2006, the technology required to implement successfully a
    security system based on the ICAO standards will be much more settled
    and allow DHS to derive the security benefits envisioned when the
    original EBSVERA was enacted.
        As you know, changing the deadlines requires Congressional action,
    and a memorandum concerning this issue was forwarded to Congress signed
    by Secretaries Ridge and Powell requesting an extension of the
    deadlines until November 30, 2006. The Secretaries also testified
    before Congress on this issue on April 21, 2004.

               IMMIGRATION PROCESSING FEES AND THE BACKLOG (CIS)

        Question. The number of immigrants awaiting decisions from CIS--
    including citizenship and permanent resident status--increased 59
    percent in the past 3 years. Despite $160 million appropriated in the
    past 2 years to remedy the logjam, nearly 6.2 million applications were
    pending at the end of September, according to a General Accounting
    Office report. The GAO probe revealed that fees charged by Citizenship
    and Immigrations Services are insufficient to cover the cost of
    processing applications--in part due to expanding security costs.
    According to the GAO, ``CIS knows neither the cost to process new
    applications nor the cost to complete pending applications,'' the
    report said.
        In anticipation of President Bush's immigration overhaul, the GAO
    recommended that Homeland Security Secretary Ridge direct CIS to study
    the fees and determine how much money will be needed to remedy the
    backlog. In an August interview with Government Executive magazine,
    Director Aguirre, you vowed to significantly reduce wait times and
    application backlogs for immigration benefits by increasing the
    agency's efficiency through new information technology investments.
        Based on the funding proposed by the President, how much of the
    backlog will CIS be able to eliminate in 2005?
        Answer. Information on the current backlog and USCIS plans to
    eliminate it will be provided to Congress in the coming months in a
    revised Backlog Elimination Plan. USCIS will meet the President's goals
    of eliminating the backlog and achieving a 6-month processing standard
    for all immigration applications by 2006.
        Question. I understand that in order to meet the President's
    backlog reduction goal by fiscal year 2006, your agency must achieve a
    42 percent increase in productivity. Two questions--First, what
    specific steps are you taking to produce 42 percent increase in
    productivity? Second, it is essential that you ensure that security
    background checks are done correctly. If a 42 percent productivity
    improvement is not accomplished, what will the impact be on making sure
    that security background checks are completed?
        Answer. Information on the current backlog and USCIS plans to
    eliminate it will be provided to Congress in the coming months in a
    revised Backlog Elimination Plan. USCIS will meet the President's goals
    of eliminating the backlog and achieving a 6-month processing standard
    for all immigration applications by 2006.
        USCIS will continue to explore ways of improving the efficiency of
    our national security check processes, but will not place backlog
    elimination requirements above national security requirements. Backlog
    elimination will be achieved through efficiency efforts, through
    development of information technology programs that automate manual
    processes, and from reengineering processes to reduce adjudication time
    without sacrificing the integrity of the adjudicative process.

                        PRESIDENT'S IMMIGRATION PROPOSAL

        Question. What impact would the President's immigration proposal,
    if enacted, have on the immigration application backlog and on efforts
    to reduce the backlog? Would the temporary work permits envisioned in
    the President's plan be issued before or after the benefits sought by
    the 6.2 million applications in the backlog? What is the plan for
    insuring that the backlog reduction program does not increase benefits
    fraud by encouraging the rubber-stamping of applications?
        Answer. USCIS will need to review specific legislative proposals
    before it can comment on the potential impact on USCIS' capabilities.

       Citizenship and Immigration Services and Immigration and Customs
                                  Enforcement

                                 BENEFITS FRAUD

        Question. Who is responsible for investigating benefits fraud? Both
    CIS and ICE have asked for funding to investigate benefits fraud, but
    neither seems to know which is actually responsible.
        Answer. A January 2002 General Accounting Office (GAO) Report-02-66
    entitled ``Immigration Benefit Fraud--Focused Approach is Needed to
    Address Problems'' raised concerns about identifying immigration fraud.
    As a part of the USCIS efforts to reengineer its business processes and
    eliminate the backlog, the agency is also looking closely at ways to
    identify and decrease benefits fraud. Immigration and Customs
    Enforcement will continue to play a vital role in investigating
    suspicious cases and/or prosecuting the participants in a scheme in
    conjunction with Federal, state, and local prosecutors.
        ICE will continue to perform those enforcement duties enumerated in
    the OPM classification standards for an 1811 occupational series
    criminal investigator.

                   IMMIGRATION REFORM AND CONTROL ACT (ICRA)

        Question. What lessons from the 1986 Immigration Reform and Control
    Act (IRCA) legalization programs have been applied to the President's
    Immigration Reform Plan?
        Answer. The IRCA planning teams developed a strategy that enabled
    the Service to quickly expand its adjudicative capacity through the
    establishment of temporary regional processing centers and local
    interview offices. Temporary employees were hired and trained
    specifically to adjudicate that workload. INS reassigned experienced
    executives and managers at all levels to oversee operations, but relied
    heavily on the skills or retired executives and managers (reemployed
    annuitants). This strategy enabled the Service to continue its efforts
    to process the normal casework plus handle the surge in workload caused
    by the passage of IRCA.
        Key components of IRCA were: the development of the regional
    processing center concept, development of a modular office plan for
    field interviewing sites, automated data systems to record
    transactions, and receipt of authority from Congress to expedite
    certain leasing and contracting requirements. In addition, INS received
    authority to reemploy annuitants without salary offset. The reemployed
    annuitant program was absolutely critical to the overall success of the
    program.
        INS worked closely with Congress prior to the passage of IRCA, and
    that cooperation was also instrumental in INS being able to meet the
    requirements for the legalization provisions of IRCA.
        Question. What were the total costs of IRCA's two legalization
    programs (please break down by main components) and how much revenue
    was generated in total by the fees charged to process IRCA
    applications?
        Answer. The IRCA program was totally fee-funded. Therefore, the
    number of applications filed and their respective fees determine the
    total cost of the program. Our analysis to date of the program has
    determined a total application workload of approximately 2.7 million,
    with costs/fee revenues totaling $245 million. The breakdown of this
    program is as follows: (1) Application for Permanent Residency (2.68
    million applications/$241 million), and (2) Application for Status as a
    Temporary Resident (6,700 applications/$3.7 million).
        Question. How much will the President's Immigration Reform Plan
    cost, and what components comprise the total cost?
        Answer. It is expected that costs associated with the USCIS
    workload would be covered with fees like all other application and
    petition processing.
        Question. How many full-time equivalent (FTE) personnel will be
    necessary to implement the President's Immigration Reform Plan? What
    level of fees or additional appropriations would be necessary to hire
    those additional FTEs without further increasing the deficit?
        Answer. This information will be available once Congress has
    drafted the legislation and the specifics are known.

                             DATA BETWEEN 1996-2003

        Question. Please provide a comparison of the size of the fugitive
    alien population from 1996-2003. Please also provide the same
    information regarding the backlog, as well as the backlog of matters
    pending in the Immigration Court for the same period.
        Answer. Below are the estimates of the number of fugitive aliens
    based on the year that they received their order of removal, based on
    information in the Deportable Alien Control System (DACS).

    ------------------------------------------------------------------------
                           Fiscal year                          Absconders
    ------------------------------------------------------------------------
    1996....................................................         130,296
    1997....................................................         157,220
    1998....................................................         186,944
    1999....................................................         214,580
    2000....................................................         239,656
    2001....................................................         265,427
    2002....................................................         295,336
    2003....................................................         320,364
    ------------------------------------------------------------------------

        ICE defers to the Executive Office of Immigration Review (EOIR) to
    respond to your question regarding the number of backlogs of matters
    pending in the Immigration Court for the same period of time.

                         Customs and Border Protection

                        TERRORIST WATCH LIST INTEGRATION

        Question. One of the most important items on the Department's list
    of unfinished business is the integration of terrorist watch lists.
    Earlier this year, Secretary Ridge said the list would be fully
    functional ``by mid-May.'' Because the agencies you oversee--Customs
    and Border Protection and Immigration and Customs Enforcement--rely
    daily on accurate information about the potential threats to this
    country posed by individuals on these lists, I would expect that the
    integration of this information would be a priority.
        It is not clear to me whether the integration of the watch lists is
    an FBI responsibility or that of the Department. Is it a DHS
    responsibility or an FBI responsibility to integrate the watch lists
    and when do you expect the integration to be complete?
        Answer. Terrorist Watch Lists are the responsibility of the
    Terrorist Screening Center (TSC), and the Terrorist Threat Integration
    Center (TTIC). CBP submits names for watch listing to the TTIC through
    CBP's Office of Intelligence. Since the CIA, FBI and DHS have joint
    responsibility for the TTIC (TSC is a subsidiary of the TTIC), the
    responsibility lies with the TTIC as a whole. Currently, the Director
    of the CIA oversees that operation of the TTIC.

                         CONTAINER SECURITY INITIATIVE

        Question. An additional $25 million is requested for fiscal year
    2005 to expand the Container Security Initiative. This innovative
    program has placed CBP inspectors at numerous overseas seaports to work
    with their host country counterparts at targeting potentially dangerous
    containers for enhanced inspection prior to being loaded on U.S.-bound
    ships.
        In December, Subcommittee staff were able to see this program in
    action in Asia. They spoke with the inspectors, discussed their working
    relationships with the host country inspectors, and witnessed both the
    physical inspection of individual containers. The U.S. inspectors were
    quite enthusiastic about performing their duties. But both they and the
    foreign counterparts expressed concern that our personnel were being
    rotated through the countries on a temporary basis, as opposed to being
    in country for extended tours of duty. In part because of cultural
    differences in various countries, they stressed the importance of
    remaining overseas to strengthen working relationships with the foreign
    customs officials rather than starting from scratch with each new team
    of U.S. inspectors.
        Does your budget request provide for longer tours of duty for CSI
    team members? Are you actively making CSI tours a career ``enhancer''
    for your personnel--most of whom are not oriented to working overseas?
    Are your people receiving the necessary support from U.S. ambassadors
    in establishing and expanding the CSI presence overseas? Also, what
    would be costs of fully funding all Phase II CSI ports?
        Answer. Our budget includes funding for permanent overseas
    positions. We are currently using TDY (temporary duty) personnel
    overseas but have initiated the process for obtaining State Department
    approval for the permanent positions. The embassy is providing the
    necessary support to enable CSI to establish and expand its presence
    overseas. That is evidenced by the State Dept's willingness to approve
    NSDD 38's to establish permanent positions in the respective countries.
    The NSDD38 (National Security Decision Directive) requests are
    currently being processed at DHS and will be forwarded to Department of
    State for final approval. We have also developed a comprehensive
    training program for the permanent employees, which include
    operational, administrative and cultural training. We are working
    closely with the overseas posts to transition our temporary staff to
    permanent staff.
        Costs for funding the future ports are impacted by the opening date
    of the port, infrastructure requirement, staffing and equipment, etc.
    Our projected budget for fiscal year 2005 is sufficient to cover the
    costs of our expansion ports that will open in fiscal year 2005.

                     OVERSEAS AIRLINE PASSENGER INSPECTION

        Question. There have been press reports that your agency is
    considering placing CBP inspectors at certain targeted overseas
    airports to pre-screen passengers before they board flights to the
    United States. I understand that the goal is to prevent potential
    terrorists from boarding a plane and either hijacking it or blowing it
    up. That is certainly a goal we all share.
        However, because they screen passengers who board U.S.-originated
    flights, is this not more properly a Transportation Security
    Administration role? Will you be screening all passengers or only those
    holding foreign passports?
        If you are accessing passenger databases, which databases are they
    and what privacy protections are you planning on implementing? Also,
    when will Congress be notified of this program? We've only see reports
    on it in the media.
        Answer. U.S. Customs and Border Protection (CBP) Officers will be
    deployed overseas to perform a tactical function, the goal of which is
    to prevent the onward movement of people identified as national
    security threats. This program will replace the legacy INS Immigration
    Control Officer (ICO) Program. The Immigration Security Initiative
    (ISI) will also disrupt or deter the transportation of inadmissible
    aliens and the proliferation of fraudulent documents. In the course of
    these duties, the ISI will provide information to host countries, or
    appropriate authorities regarding travelers of interest.
        Although these efforts can result in the development of
    intelligence information, the primary function of the ISI is to use
    current targeting and passenger analysis information provided by the
    National Targeting Center (NTC) and the Forensic Document Lab (FDL) to
    focus on high-risk persons. These efforts may lead to the apprehension
    and prosecution of criminals and persons of national security interest
    by host countries, the disruption of attempts to smuggle aliens and
    contraband, and the disruption of attempts to enter the United States
    with fraudulent documents.
        When an ISI Officer identifies a traveler that should be prevented
    from boarding a flight to the United States, the ISI will work with the
    host country's immigration and/or customs control authority and the air
    carrier who will take the appropriate action to prevent the person from
    boarding the flight. The ISI will not have any authority in the host
    country to take such action. Information provided to the host country
    on these types of individuals will be vetted through the appropriate
    authorities before any information is released to the host country.
        Both TSA and CBP perform important functions in ensuring the safety
    and security of the United States. However, TSA does not have the
    authority CBP holds to perform the particular targeting function of ISI
    in another country. ISI is the tool that we propose to use in deterring
    individuals that may pose a threat to the safety and security of the
    United States from boarding U.S.-bound flights, not U.S.-originated
    flights.
        In fiscal year 2004, CBP will initiate a pilot of the ISI program
    in Warsaw, Poland. We estimate the cost to be approximately $500K for
    each ISI site. Once the pilot is evaluated we'll have better
    information regarding the future of the initiative.

                              ISIS BORDER COVERAGE

        Question. How much of the northern border and how much of the
    southern border is covered by ISIS?
        Answer: Currently the ISIS program covers the following:
      --Northern land border: 99 miles
      --Southern land border: 290.5 miles
      --Total: 389.5 miles

                             BORDER PATROL STAFFING

        Question. Have the USA Patriot Act's requirements for Border Patrol
    staffing on the Northern Border been met? If so, when was this goal
    achieved? Was this achieved through the transfer, on either a temporary
    or permanent basis, of personnel from the Southwest Border or
    elsewhere? If so, does your budget request provide sufficient funds to
    restore staffing at those locations to their authorized levels? If not,
    what additional funds and FTEs are required to reach that goal?
        Answer. The number of agents on the northern border had been
    increased to 1,006 as of the end of December 2003. This is triple the
    number of agents that were assigned along the northern border prior to
    9/11 and meets the Patriot Act's requirement for staffing on the
    Northern border. The number of agents currently assigned to the
    northern border remains at 1,006.
        The agent increase was accomplished through the permanent
    relocation of experienced agents from across the nine southern border
    sector areas. The CBP budget has sufficient funds to backfill the agent
    vacancies through a combination of new agent hires and the relocation
    of agents among the southern border areas. Additional funds and FTEs
    will not be required to restore the staffing levels at the southern
    border

                             ALTERNATIVES TO VACIS

        Question. My staff is aware of the existence of non-intrusive
    inspection technology (such as back-scatter gamma ray devices) that
    provides a higher degree of resolution when inspecting shipping
    containers and other closed containers. In fact, they saw some of these
    devices in use at a seaport in Asia late last year. Is CBP considering
    the procurement of next-generation devices which provide enhanced
    resolution either when replacing existing, aging systems or for
    deployment at new locations? If so, what are the approximate costs of
    the systems under consideration versus the costs of the existing
    systems? Do these newer systems provide a significant improvement for
    inspectors over existing systems? Conversely, if you are not
    considering procuring new systems, why not? Is it due to cost, other
    considerations, or both?
        Answer. ``Back-scatter'' technology, which is associated with X-ray
    systems and not gamma ray systems, was developed by American Science
    and Engineering (AS&E) in the 1980's. For many years now, Customs and
    Border Protection (CBP) has operated a large number of devices, which
    have this capability, including large-scale truck/container imaging
    systems. Back-scatter images can indeed provide information, which is
    not available from a transmission X-ray or gamma ray image. Like any
    technology though, it has its limitations--the amount of penetration
    into vehicles or containers, and the resulting image, depends in large
    part on the type and amount of commodity being scanned. CBP operates a
    variety of X-ray and gamma ray imaging systems.
        The costs of the back-scatter technology will vary depending on the
    configuration of the system. There are back-scatter-only systems which
    cost less than gamma ray imaging systems and there are transmission/
    back-scatter X-ray systems which cost significantly more than gamma ray
    systems. The requirements, which define what type of system is needed
    to meet operational demands, are much broader than just this single
    technical criteria. CBP recently purchased a new AS&E product, the ZBV
    (back-scatter only) X-ray van, which is now being tested in Arizona. We
    are preparing to field two new high (>6 MeV) energy, mobile sea
    container X-ray systems later this summer to U.S. seaports. CBP also
    recently upgraded an existing 2.5 MeV mobile X-ray system to 3.8 MeV,
    and is now testing it at the Port of Baltimore. CBP continually
    evaluates promising new technologies, which have the potential to
    enhance or replace existing systems.

                  ENHANCING BORDER PATROL INTEGRATION INTO CBP

        Question. During briefings with my staff it appears that
    coordination and integration of certain Border Patrol activities,
    programs, and systems has not gone as smoothly as it might otherwise be
    expected. Sometimes it appears that inquiries made by staff come as a
    surprise to Border Patrol and the CBP staff. For instance, we asked
    questions about the procurement of high-endurance vehicles for the
    Border Patrol only to learn that the CBP vehicle management team was
    working on a longer-term vehicle management plan of which Border Patrol
    was not a part. I understand there are growing pains and learning
    curves when creating a new Department, but issues such as development
    of a unified inventory of goods and activities seems rather basic. What
    concrete steps have CBP and Border Patrol taken to ensure that each
    entity knows what the other is doing?
        Answer. With the merger of the U.S. Border Patrol into U.S. Customs
    and Border Protection (CBP), the integration of border patrol
    activities was established as one of our highest priorities. The Border
    Patrol was established as an Office reporting directly to the
    Commissioner with the Chief of the Border Patrol having equal status to
    our Assistant Commissioners. Border Patrol Sector Chiefs participate in
    all CBP Executive Leadership meetings. Representatives from the U.S.
    Border Patrol have been included in all transition management
    activities and in some instances have actually served as the leaders of
    groups addressing integration and merger issues. The issues addressed
    not only operation mission responsibilities, but mission support
    operations as well.
        Knowing that the Border Patrol's functions and responsibilities are
    key to the security of our homeland, the following are examples of
    integration activities in which the Border Patrol has been, and will
    continue to be actively involved:
      --Immediate participation in the CBP ``around the clock'' Situation
            Room.
      --Integration of border patrol agents into CBP's intelligence
            structure.
      --Identification of resources, staffing, and property transfers and
            modifications to information systems necessary to stand up CBP
            on October 1, 2003.
      --Analysis of vehicle fleet requirements as part of CBP's replacement
            and upgrade strategy.
      --Participation in a procurement ``War Room'' to train and certify
            border patrol employees in CBP contract and procurement
            processes and reduce an inherited backlog of outstanding
            procurement actions.
      --Determining the process and infrastructure to consolidate the
            tactical communications program in order to create more unified
            communications structure and assure officer safety through
            interoperability.
      --Migration of and training for all border patrol employees to CBP's
            administrative systems for processing travel, payroll,
            procurement, and human resources.
      --Identifying technologies to share and to use as force multipliers
            to increase CBP's enforcement capacity.
      --Designing a process for incident reporting to ensure clear
            reporting for rapid notification to senior management of
            significant incidents.
      --Developing a strategy, policies and procedures for integrating the
            processing of seizures, forfeitures, fines and penalties into a
            consolidated process for all of CBP to assure property and
            fiscal accountability.
      --Proposing an integration plan for unifying operational policies,
            resource management and best practices for the CBP Canine
            program.
      --Cross training Border Patrol agents in anti-terrorism concepts and
            techniques.

                             BORDER PATROL VEHICLES

        Question. What is the status of the review of the need for high-
    endurance vehicles for the Border Patrol? What performance measures are
    you using for determining the need to procure additional or different
    high-endurance vehicles? Are there funds in the fiscal year 2005 budget
    request to procure additional high-endurance vehicles?
        Answer. U.S. Customs and Border Protection (CBP) recently entered
    into a contract with Nevada Automotive Transportation Center to conduct
    a terrain mapping study. This is a joint effort between the Office of
    Finance and the Office of Border Patrol Information Technology Unit.
    Information obtained from the study will be used to evaluate the
    terrain and recommend the type of high-endurance vehicles needed to
    meet mission requirements and provide for Agent safety.
        CBP will determine the correct vehicle to be procured based on life
    cycle studies, performance measures and the out come of the terrain
    mapping study. The performance measures will include, mission
    requirements, life cycle costs, durability and downtime of vehicles.
        Currently, there are no funds designated in the fiscal year 2005
    budget to procure additional or replacement high-endurance vehicles.

                    LAND BORDER ``EXIT'' CONTROL OF US VISIT

        Question. What impact will the ``exit'' component of US VISIT have
    on the land borders? Do you anticipate that additional outbound
    inspection lanes or other facilities modifications will have to be
    created in the coming years? If so, when can we expect to receive an
    estimated plan of those construction and other requirements? Is CBP an
    active participant with the US VISIT program office?
        Answer. The impact of the US VISIT exit program on land border
    facilities, outbound lanes, and possibly staffing will depend on the
    process/solution that is deployed. It will also depend upon the timing
    of the rollout of the exit strategies.
        After US VISIT awards a contract to their prime integrator for the
    land border entry/exit system, expected in mid-fiscal year 2004, and
    the integrator offers a more comprehensive solution, CBP will better
    understand the extent of the impact to our operations. CBP will
    continue to work closely with US VISIT to develop an exit solution. .

                                COBRA EXTENSION

        Question. What is CBP currently doing to fix the COBRA overtime cap
    issue which has caused Customs Inspectors and new CBP officers to lose
    the ability to contribute $2,500 towards their base pay for calculating
    their retirement annuity? The current overtime earning cap has been
    reduced from $30,000 to $25,000 due to a legislative language drafting
    issue in the fiscal year 2004 DHS Appropriations bill. Does your budget
    request provide a legislative fix to this unintentional drafting error?
        Answer. This unintentional oversight is being addressed through
    various channels. The Department of Homeland Security is working on a
    legislative change to equalize the overtime caps for all U.S. Customs
    and Border Protection (CBP) employees, while CBP is investigating the
    possibility of cap waivers that would allow officers to exceed the
    $25,000 cap in fiscal year 2004.
        Question. Does the fiscal year 2005 Budget assume the merging of
    Customs/INS/Agriculture user fees? In addition, what does the fiscal
    year 2005 budget estimate will be received in COBRA user fees for
    fiscal year 2004?
        Answer. The fiscal year 2005 Budget does not assume that the
    Customs/INS/Agriculture user fees will be merged. CBP is projecting
    that $303 million will be received in COBRA user fees in fiscal year
    2004.
        Question. Does the fiscal year 2005 budget assume the
    reauthorization of COBRA which is set to expire on March 31, 2005?
        Answer. Public Law 108-121 reauthorized COBRA through March 1,
    2005. The fiscal year 2005 budget assumes that COBRA will be
    reauthorized beyond the March 1st expiration date.

                          SIXTH DAY OF FLETC TRAINING

        Question. What is the Department doing to correct the problem of
    the Department not paying legacy Customs Inspectors and new CBP
    officers for their required work on the sixth day of basic training at
    the Federal Law Enforcement Training Center (FLETC)?
        Answer. We do pay employees covered by the Fair Labor Standards Act
    (FLSA) overtime while engaged in training at FLETC for 6 day weeks. The
    Government Employee and Training Act (GETA) prohibits us from paying
    non-FLSA employees under FLSA provision. Our COPRA covered front-line
    personnel are not subject to FLSA. COPRA was specifically designed for
    Customs Officers and is the exclusive pay act for our Customs legacy
    personnel. Our agency position on this matter was recently sustained in
    an arbitration decision.

                                 CROSS-TRAINING

        Questions: What amount of training dollars per officer (i.e.,
    ``modular costs'') is currently being spent for customs training vs.
    immigration training?
        Is CBP requiring both legacy Customs and legacy INS/Border Patrol
    personnel to attend cross-training programs? What percentage of legacy
    Customs vs. INS/Border Patrol personnel has actually completed such
    training? Does CBP intend that all enforcement personnel will undergo
    such cross-training, and if so, when is that training expected to be
    completed?
        Legacy immigration inspectors have said that compact discs (CDs)
    are being used for training legacy Customs personnel in immigration
    law, while legacy INS/Border Patrol personnel must attend in-person
    training in Customs law. How does CBP ensure that the material on the
    CDs is being learned? What evidence does CBP have that training at-home
    training with a CD is as effective as in-person training?
        Answer. The CBP Officer Training Modules are being developed by CBP
    under one initiative using field subject matter experts with experience
    in customs, immigration and agriculture for the determination of course
    content. Each individual will receive the training needed to achieve
    full competency as a CBP Officer. Costs are not allocated on a per-
    officer basis as each officer receives a training package tailored to
    meet their individual need.
        CBP will require both legacy Customs and legacy INS inspectors to
    attend cross training programs. There are many different audiences for
    the different modules:
      --New CBP Officers
      --CBP Customs Inspectors
      --CBP Immigration Inspectors
      --CBP Agriculture Specialists
      --New CBP Agriculture Specialists
        Because of the differences in roles and geographic areas served,
    Border Patrol personnel were not integrated into the CBP Officer
    position and are not required to participate in the cross-training
    initiatives.
        Of the 21 training modules that have been developed to support CBP
    Officer training priorities, 15 have been identified as cross-training
    programs for legacy Customs inspectors, INS inspectors, or both.
    Integrated training modules will be rolled-out and delivered over the
    next 12-months.
        Integrated training will be delivered in the field locations. There
    are different delivery methods for the modules, ranging from classroom,
    to computer-based, to video, to on-the-job. And, there is different
    timing for delivery of the modules; for example, some will be taken by
    new CBP Officers as soon as possible after their return from the
    Academy. The integrated training for other CBP Officers will be
    mandatory, and will be based on the operational needs of a given port.
    Inspectors who are converted to the CBP Officer position will not be
    expected to perform new functions until they have demonstrated the
    knowledge and skills required for that function.
        Compact Discs (CDs) are being used solely as a prerequisite to
    classroom training. The CDs are a 6-hour course in Fundamentals of
    Immigration, and a 10-hour course in Immigration Law. All CD self-study
    training includes rigorous tests that are administered to ensure
    students are prepared for the 5 days of intensive classroom training
    that provides additional study and application of the law.
        The classroom portion is followed by an extensive on-the-job
    training requirement. Finally, additional classroom instruction will be
    provided to prepare the Officers for more advanced tasks. Approximately
    80 hours of instruction will be delivered to each Officer. The same
    method of training is being developed for customs law.
        Currently customs law is being delivered as a course at the CBP
    Academy to new Officers.
        Due to the complexity and immediate need to get this training to
    the intended users, CBP determined that the best method for delivering
    immigration law training to legacy Customs personnel was by Compact
    Disc (CD). By using CD's, the officers could complete the training as
    required and have a consistent, convenient, available, ready-reference
    information to use. The completion of the CDs takes place during the
    CBP Officers regular duty assignments; the CBP Officers do not complete
    these CD's at home.
        The Officer is evaluated by an examination at the end of each
    module. If successful, the officer receives a certificate of completion
    for that specific module of training. If unsuccessful, the Officer
    receives feedback and information as to what areas of the training
    requires more study. The Officer is required to repeat that module and
    re-take the examination until the modules are completed at the required
    knowledge level.

                       CONTINUED DUMPING AND SUBSIDY ACT

        Question. Please provide an update on CBP efforts to implement last
    year's Treasury IG recommendations on how to improve administration of
    the Continued Dumping and Subsidy Offset Act.
        Answer. CBP has completed three fiscal year cycles under the CDSOA.
    To date, CBP has disbursed over $750 million to affected domestic
    producers. An additional $50 million in fiscal year 2003 duties is
    currently being withheld pending the outcome of a court case. Total
    number of claims processed to date is over 4,000. As a result of a
    recent IG investigation into this program, CBP has added resources,
    improved process controls, and transferred responsibility for the
    program to the CBP Chief Financial Officer. CBP is currently in the
    planning stages for the fiscal year 2004 disbursement process. We will
    be publishing a Federal Register Notice in June or July, announcing our
    Intent to Disburse fiscal year 2004 funds and inviting affected
    domestic producers to file their certifications in a timely manner.
    Under the existing statute, we are required to disburse the fiscal year
    2004 funds no later than 60 days after the end of the fiscal year, or
    November 29, 2004.
        Question. How much was spent in fiscal year 2002-2004 to administer
    the program? What is the estimated cost for fiscal year 2005?
        Answer. From fiscal year 2002-2005, the estimated annual expenses
    incurred by Customs and Border Protection (CBP) to administer this
    program are approximately 18 FTE and $1.9 million.
        Question. On March 19, 2004, CBP issued its Annual Report (2003) on
    the ``Byrd Amendment'' trade law. This is a law I helped enact that
    allows CBP to reimburse U.S. companies that have been injured by unfair
    trade with funds that are collected as import duties on unfairly traded
    imports. The CBP report states that, while CBP should have distributed
    at least $320 million in collected duties to eligible U.S. companies
    and workers in 2003, it was able to distribute only $190 million
    because CBP failed to collect $130 million from unfair traders. Most of
    the uncollected $130 million consists of import duties not collected by
    CBP on goods from China, in particular. While part of the problem is
    that Chinese companies are refusing to pay these duties, it also
    appears that CBP is failing to enforce the U.S. trade laws because it
    is not diligently pursuing the parties who are refusing to pay these
    duties.
        Why is CBP not collecting millions of dollars in duties on unfairly
    traded imports as required by U.S. law?
        Answer. CBP is correctly assessing duties on all imports into the
    United States as required by U.S. law. CBP charges importers for post
    entry changes to this assessment. CBP vigorously pursues collection of
    all outstanding debt liabilities.
        Question. If the duties are not now being paid, what does CBP plan
    to do to make certain that the duties are paid and collected in the
    future?
        Answer. CBP has developed a national trade strategy that
    specifically addresses the high priority issues and risks in trade.
    Anti dumping and countervailing duty (AD/CVD) and revenue collection
    are two priorities within the strategy. Action plans have been
    developed to address specific risks to these issues. Included in the
    plans are innovative approaches to establishing bonding limits,
    specifically for anti-dumping imports, that are commensurate with the
    financial risks of the transaction.
        Question. Why, in your view, does the problem seem to involve more
    imports from China than from any other country?
        Answer. There are a number of possible factors. There are currently
    more anti-dumping and countervailing duty orders in place for China
    (54) than for any other country. In addition, China has been named in
    half of the 16 petitions filed with the International Trade Commission
    (ITC) in the last 7 months.
        There is also volatility in the deposit rates issued by the
    Department of Commerce (DOC) and administered and enforced by CBP for
    dumping cases concerning China. DOC adopts the presumption that the PRC
    is a nonmarket economy during their investigations. The success or
    failure of a particular exporter/producer to satisfy DOC that they are
    independent from the PRC government affects the rate they are subject
    to. It is possible for deposit rates to fluctuate significantly during
    the course of the DOC investigation as well as in the final rate
    depending on their ability to respond to DOC.
        Question. How does CBP specifically plan to address the fact that
    the bulk of the problem concerns imports from China?
        Answer. CBP currently has in place trade strategies that focus
    specifically on anti-dumping/countervailing duty and revenue. Each of
    these plans has a multi-office working group responsible for the
    development, oversight and evaluation of the plans. These plans have
    already developed and implemented a number of actions that address
    dumping as a whole and by inclusion, China. These actions include
    identification and clean up of outstanding dumping entries, increased
    operational oversight of the dumping process, development of improved
    mechanisms to ensure and monitor adequate bonding of dumping entries,
    and improved communication with DOC.
        Question. Some believe that, if it were not for the Byrd Amendment,
    CBP would have no way of knowing that these millions of dollars in
    duties were not being collected. If this is true, do you believe that
    CBP should adopt additional ways to determine whether import duties are
    being paid by importers and collected by the United States Government?
        Answer. While CBP does have adequate controls in place to ensure
    that collectible debt is collected, we are working to strengthen these
    controls to help us identify potential uncollectible debt earlier in
    the process.
        CBP has standard reports that list all unpaid and overdue bills,
    including those for unpaid anti-dumping and countervailing duties. Some
    anti-dumping and countervailing duties have not been and will not be
    collected when importers go out of business or go bankrupt, and bond
    coverage is insufficient. As a part of the normal business process,
    those amounts would not have been collected and deposited into general
    fund receipts. Until the Byrd Amendment, these uncollected amounts were
    not directly related to the injured parties involved with anti-dumping
    and countervailing duty cases. The relationship that injured parties
    now have regarding the anti-dumping and countervailing duty amounts
    uncollected, as direct beneficiaries, makes this issue now especially
    significant.
        Question. In your response to my questions at today's hearing
    regarding why Customs has been unable to collect duties on unfairly
    traded imports--particularly from China--you indicated that there is a
    need to address systemic problems at both the U.S. Department of
    Commerce and the U.S. Department of the Treasury. Could you please
    advise me of the specific actions, including regulatory reform, that
    CBP is and will be asking these other agencies to undertake to better
    enable CBP to collect duties on unfairly traded imports?
        Answer. CBP and DOC have working groups which meet together on a
    regular basis to identify the systematic problems and to develop action
    plans to address these problems. CBP has also undertaken a national
    bond review program which is increasing the monitoring of bond
    sufficiency to ensure that sufficient bonds are in place at all times
    to protect the revenue. Legislative proposals are also being considered
    which would reinforce CBP's ability to require sufficient bonds.
        Questions. CBP's Annual Report on the Continued Dumping and Subsidy
    Offset Act (``CDSOA'') for fiscal year 2003 showed that CBP was unable
    to collect over $130 million in antidumping duties in 2003. Of these
    uncollected duties, over $100 million relate to Chinese imports. There
    have been reports that these uncollected duties reflect active efforts
    by Chinese parties and their U.S. affiliates to avoid paying U.S.
    antidumping duties by, among other things, quickly importing large
    amounts of goods, then filing for bankruptcy to avoid liability for
    duties and engaging in other fraudulent conduct.
        Answer. We don't know if these were fraudulent situations. However,
    in these situations it is important to determine timely that an anti-
    dumping or countervailing duty case is a factor in the importation.
    When it is, adequate bond coverage should be required based on the
    findings that anti-dumping and countervailing duties are warranted. In
    addition, the bond amount should not be limited to the preliminary
    determination rate, but at least set at 100 percent of the value of the
    commodity involved on an entry by entry basis. This would resolve under
    collection situations in the major portion of cases where preliminary
    determination rates were understated and bond amounts were set
    accordingly. In the event that an importer goes out of business or
    bankrupt, then the bond amount would be sufficient in most cases (at
    least where the final determination rate by DOC is not greater than 100
    percent of the value of the imported merchandise).
        Question. Has CBP seen evidence of such conduct with respect to
    importations from China of goods subject to antidumping duty orders?
        Answer. On a case-by-case basis, there appears to be instances
    where importers of Chinese merchandise bring in a large volume subject
    to anti-dumping duties and file bankruptcy prior to CBP's collection of
    the full assessment of these duties.
        Question. Is there evidence of an organized effort by China,
    Chinese parties, affiliated U.S. parties and/or their representatives
    to avoid these duties? Could you provide such evidence?
        Answer. No, CBP has no evidence of a Chinese conspiracy in this
    area.
        Question. Please explain the various means by which these parties
    are avoiding the payment of import duties. Please quantify the extent
    to which these means contribute to CBP's inability to collect duties in
    specific Chinese antidumping duty cases.
        Answer. We know that bills have been issued to some importers who
    filed for bankruptcy, therefore forcing us to collect outstanding debt
    from the surety. This has caused financial problems for some surety
    companies, which have then been forced into bankruptcy. Part of the
    work being done within CBP includes the identification of the areas of
    concern and then the quantification of these areas to prioritize them.
        Question. To what extent does the ability of importers to post
    bonds on imports by ``new shippers'' from China contribute to the
    ability of Chinese parties and their U.S. affiliates to avoid paying
    antidumping duties?
        Answer. The ``new shipper'' designation allows for a deferral of
    payment of potential AD/CVD if the party is indeed a new shipper.
        Question. Does CBP have evidence that these parties are
    fraudulently obtaining new shipper bonds? Please explain.
        Answer. CBP has no evidence that these parties are fraudulently
    obtaining ``new shipper bonds''. There is no ``new shipper bond'', just
    the Customs Bond. ``New shipper'' is a status that certain parties can
    claim, which is issued by Commerce.
        Question. Are there steps that CBP has taken or can take to alert
    bonding companies to the potential financial risks posed by Chinese
    ``new shippers'' and their U.S. affiliates?
        Answer. No. Companies are granted bonding authority by the
    Department of Treasury. The normal business process involving
    importation has sureties bonding the importer of a record's entry
    transactions based on possible duties, taxes and fees involved, and
    other regulatory reasons that require an entry bond. When a preliminary
    determination is published in the Federal Register, the public is
    advised, and bond coverage is administered accordingly by CBP. This
    public information and other information that a surety can require
    (including the financial ability of the importer of record to pay their
    duties, taxes and fees) should be sufficient.
        Question. Current law permits importers of goods from ``new
    shippers'' to pay deposits of estimated dumping duties by posting
    bonds, rather than making cash deposits, as occurs in most other cases.
    A longstanding agreement between the Department of Commerce and CBP
    requires that such bonds be in the form of single entry bonds
    (``SEBs''). In recent years there have been frequent reports that,
    notwithstanding its agreement with the Department of Commerce, CBP has
    not been obtaining SEBs for ``new shipper'' imports and in other
    required instances.
        To what extent does the amount of uncollected duties shown in the
    2003 CDSOA report reflect CBP's failure to obtain required SEBs? For
    each antidumping duty case for which there were uncollected duties in
    fiscal year 2003, please quantify the extent to which CBP's inability
    to collect duties was attributable to a lack of requisite SEBs or other
    deficiencies in bonding.
        Answer. Extensive research will be required to provide a response
    to this question in consultation with the Committee.
        Question. The CDSOA report for 2003 reports that there is over $283
    million in antidumping duty-related bonds in individual antidumping
    duty clearing accounts for unliquidated entries. To what extent are
    these bonds the required SEBs as opposed to standard continuous bonds?
    To the extent that these bonds are not the required SEBs, what, if
    anything, can CBP do to require SEBs for these amounts?
        Answer. CBP cannot determine which amounts are covered by SEB vs.
    continuous bonds. CBP lacks authority to obtain retroactive SEBs.
        Question. Please detail the steps being undertaken by CBP and the
    Department of Commerce to require SEBs on all import entries for which
    they are required? Please confirm that SEBs are being obtained in all
    cases in which they are required and explain how CBP has verified this
    conclusion. If SEBs are not being obtained in all required cases,
    please explain why not and explain what CBP is doing to address the
    problem.
        Answer. DOC may also allow bonding in AD/CVD cases other than new
    shipper reviews. In accordance with T.D. 85-145, CBP requires single-
    entry bonds in instances where bonding is permitted and the deposit
    rate is 5 percent or greater. Policy reminders have been issued to all
    field locations and importers of their responsibility to secure a
    single-entry bond in these instances to cover AD/CVD duties.
        ACS (Automated Commercial System) has the capability to track the
    existence of only one type of bond. The majority of importers have
    continuous bonds to cover normal imports. CBP instituted a policy in
    October 2003 that requires additional bond reporting requirements to
    track single-entry bonds electronically. CBP monitors this requirement
    on a monthly basis.
        Question. Please explain how domestic producers can confirm that
    imports of competing goods subject to antidumping duty orders are
    secured by required cash deposits or SEBs. Who are the points of
    contact at CBP on this issue?
        Answer. Domestic producers cannot confirm this information. This
    information is contained on CBP entry documents. CBP has long
    considered information on entry documents exempt from disclosure
    pursuant to 5 U.S.C. 552(b)(4). Furthermore, the Trade Secrets Act (18
    U.S.C. 1904) prohibits Federal employees from disclosing such
    information and imposes personal sanctions on employees who do so.
        Question. Is there any way of advising when bonds are issued and
    how they can be tracked from the point of issuance? What percent of
    bonds are collectable? Why is it that in cases involving critical
    circumstances, a very small portion is collectible? Is the problem one
    of administration between the Commerce Department and Customs? Could an
    importer be held liable if the exporter refuses to pay?
        Answer. There is no way of advising when bonds are issued and
    tracking them from the point of issuance. Data is not currently
    available to determine what percent of bonds are collectable. In the
    cases involving critical circumstances, a very small portion is
    collectible because the bonds are issued at the time the goods are
    released, based on the amount of duties/taxes/fees assessed when the
    goods are released. CBP does not have the legal authority to demand an
    increase in a bond retroactively (after the release of the goods),
    which, in critical circumstances is when CBP becomes aware of the fact
    that a higher bond amount is needed. CBP is working on legislative
    initiatives, which may include a statutory change that would allow us
    to demand a higher bond retroactively. The importer is always held
    liable for payment of duties/taxes/fees.
        Question. Finally, if there is a serious problem in cases where
    bonds are permitted, wouldn't a logical solution be simply to require
    cash deposits--at least in all new shipper reviews?
        Answer. The Department of Commerce has jurisdiction in this matter
    and can best address it.
        Question. Explain and quantify the budgetary, manpower, technical
    and other impacts on CBP of administering the bonding option for
    imports from new shippers under antidumping duty orders.
        Answer. While CBP is unable to quantify the manpower impact of
    administering the bonding option for imports from new shippers under
    anti-dumping orders, our inability to require the bonds post release
    hinders our collection efforts drastically. If a party claims new
    shipper status, then the determination is made at a later date that the
    party actually was not eligible for new shipper status. CBP has no
    legal authority to retroactively require a bond for those entries that
    were released (and bonded) under the benefits of new shipper status.
        Question. On December 4, 2003, the White House Office of
    Communications issued ``The President's Determination on Steel,'' which
    stated that President Bush ``is committed to America's steel workers
    and to the health of our steel industry.'' It also stated that,
    ``[s]teel import licensing, established when the safeguard measures
    were imposed, will continue to provide WTO-consistent data collection
    and monitoring of steel imports. This will enable the Administration to
    quickly respond to future import surges that could unfairly damage the
    industry.''
        The President's Proclamation of the same date similarly stated that
    ``the licensing and monitoring of imports of certain steel products
    remains in effect and shall not terminate until the earlier of March
    21, 2005, or such time as the Secretary of Commerce establishes a
    replacement program.''
        Secretary Evans made several comments to the media on December 4,
    2003, regarding the Administration's commitment to the U.S. steel
    import monitoring and licensing system and indicated that it would be
    expanded to include steel products that were not subject to 201 tariffs
    and quotas. I want to be certain that the Administration remains fully
    committed to this effort.
        Could you please advise me as to whether the Administration has a
    plan to expedite the adoption of the new, expanded program?
        Answer. In the President's Proclamation, the President stated that
    ``the licensing and monitoring of imports of certain steel products
    remains in effect and shall not terminate until the earlier of March
    21, 2005, or such time as the Secretary of Commerce establishes a
    replacement program.'' The President has clearly assigned the authority
    to establish a replacement program with the Secretary of Commerce and
    therefore Customs and Border Protection (CBP) is not in a position to
    offer comments on the Secretary's plans to expedite the adoption of the
    new, expanded program. As the licensing system was established in March
    2003, CBP's role in the system consists solely of the collection of the
    licenses that have been issued by the Department of Commerce. All other
    implementation and monitoring responsibilities lie with the Department
    of Commerce.
        Question. Could you also please advise me of when the
    Administration intends to request public comment with respect to its
    new import monitoring and licensing system?
        Answer. The responsibility of the licensing system lies with the
    Department of Commerce; CBP is not in a position to respond as to when
    the Department of Commerce intends to request public comment with
    respect to its new import monitoring and licensing system.
        Question. When would you estimate that it will be up and running?
        Answer. CBP is not in a position to estimate when the Department of
    Commerce will implement the new import monitoring and licensing system.
    CBP is committed to taking the necessary steps to implement programming
    and operational changes needed to successfully enforce the licensing
    program once the Department of Commerce has established it.
        Question. What assurances can you provide that the system will be
    operational by that date?
        Answer. CBP will defer to the Secretary of Commerce on the
    timelines for implementation of the new licensing and monitoring
    system.
        Question. The U.S. domestic steel industry and CBP have maintained
    a mutually beneficial partnership since the mid-1960's. The keystone of
    the Customs-Steel Partnership is a program of seminars and meetings
    where experts from the U.S. steel industry train Customs officials in
    the important aspects of steel identification, classification, trade
    law, and commercial issues. The program also provides steel mill tours,
    reference books, videos, sample kits, and other work tools for Customs
    officials. Customs brokers, invited to the meetings at Customs'
    request, serve as the link between importers. Customs also derives
    significant benefits from the seminars.
        When the President ended the Section 201 remedies for steel more
    than a year before originally scheduled, he promised to continue to
    focus on steel licensing, import monitoring, and the enforcement of our
    trade laws. The Customs training program provides significant
    enforcement education to this end. Congress appropriated $1.25 million
    to fund the Customs Steel Partnership training programs in fiscal year
    2003 and fiscal year 2004. We would like to see the same level of
    effort in Customs training during the coming fiscal year and want to
    work with the Administration to secure an appropriation of $500,000 for
    fiscal year 2005.
        Will the Administration support the continuation of funding for
    this vital program as part of the Homeland Security appropriation in
    the amount of $500,000 for fiscal year 2005?
        Answer. The funding is provided as part of the Homeland Security
    appropriations for fiscal year 2003 to enhance CBP's ability to train
    and enforce steel trade laws was a key component in the agency's
    ability to administer and enforce the Steel 201 Proclamation. The
    President's fiscal year 2005 Budget for CBP addresses the
    organization's highest priorities.
        Question. Can CBP confirm the view expressed by many Customs
    officials involved in the Customs Steel Partnership, that its benefits
    are considerable? So much so that it and the Customs Steel Partnership
    Training Program in particular serve as a model for the establishment
    of other Industry/Customs Partnerships?
        Answer. CBP can confirm that the Customs Steel Partnership Training
    Program provided benefits to CBP as well as the importing community.
    The training sessions continue to include Customs Brokers, importers
    and exporters. While the Customs Steel Partnership has allowed CBP to
    expand the size of the audience to be trained, there may perhaps be a
    more efficient manner in which to fund and/or administer the funding
    for said Customs Steel Partnership Training Program. Due to the
    complicated procurement and budget procedures under which CBP operates,
    it may be more beneficial for all parties involved if there is direct
    funding provided by the Steel Industry. CBP could continue the
    partnership with the Steel Industry, as we have since the mid-1960's,
    but perhaps there is a more mutually beneficial avenue in which to
    continue and enhance said partnership.
        Question. Concerns exist about the adequacy of existing practices
    surrounding the enforcement of the U.S. antidumping duty law against
    imports from non-market economies, but particularly China. With the
    extraordinary trade deficit that the United States is running with
    China, can you provide details of what changes in the enforcement of
    the U.S. dumping law are being considered for non-market economy cases
    and when the agency will be implementing such changes?
        Answer. This would be best addressed by the Department of Commerce.
        Question. Last year, the Department of the Treasury's Office of the
    Inspector General completed an audit of CBP compliance with the
    Continued Dumping and Subsidy Offset Act (CDSOA). The OIG's report,
    which was issued in August 2003, by the DHS IG, found a number of areas
    in which CBP could improve its management of this program.
    Specifically, it noted the need to (1) properly establish special
    accounts, and (2) pay claimants within 60 days after the end of the
    fiscal year. In addition, the OIG stated that CBP had not instituted
    standard operating procedures and adequate internal controls for the
    management of the CDSOA program. CBP said it had established a CDSOA
    working group to address both the recommendations and management
    considerations identified by the OIG.
        What has the working group done to address the recommendations and
    management considerations identified by the OIG? Has it established
    special accounts? Are claimants paid within 60 days of the end of the
    year? Are checks sent to proper addresses? Who is responsible for
    preparing and sending the checks on time?
        Answer. The working group recommended, and the Deputy Commissioner
    approved, the consolidation of responsibility for most of the program
    with the Office of Finance, National Finance Center (NFC). Once this
    was done, procedures and controls could be strengthened. This included
    the establishment of crosschecks to identify problems such as the
    overpayments reported by the OIG.
        Timely liquidation of entries and validation of claimants' costs
    and production were not transferred to OF-NFC.
        Special accounts were established at the beginning of the program
    and remain in place and properly utilized. However, due to current
    system limitations, CBP must make manual adjustments to the balances in
    these accounts to determine the actual amounts available for
    disbursement. This limitation will exist until full implementation of
    the new Automated Commercial Environment (ACE) system.
        Question. How much was spent in fiscal years 2002-2004 to
    administer the program? What is the estimated cost for fiscal year
    2005?
        Answer. All disbursements for 2003, which were not restricted by
    pending litigation, were processed within the allotted time. We expect
    to meet the time requirements for 2004 and future years.
        Checks are sent to the addresses on the claims submitted to us. If
    the claimants or their attorney inadvertently include the wrong
    address, we have no way of knowing that.
        The Office of Finance, National Finance Center processes the
    disbursements. The actual checks are issued by Treasury's Financial
    Management Service based on NFC certifications.
        Actual costs for administering the program were not separately
    collected for fiscal year 2002-2004, but are estimated to have
    increased from approximately $500,000 in the first year to
    approximately $1.2 million for 2004, and to an estimated $1.8 million
    for 2005. The increase year by year is due to the increased complexity
    and size of the program.
        Question. What mechanisms are being used currently to ensure that,
    when Commerce issues liquidation instructions to Customs, the
    liquidations are timely made? There have been reports of numerous cases
    recently involving Customs' failure to liquidate timely and, as a
    result, the agency fails to collect duties lawfully owed.
        Answer. CBP meets biweekly with Commerce concerning operational
    issues related to dumping. These meetings address issues that include
    the mechanisms and procedures by which liquidation instructions are
    transmitted by Commerce to CBP.
        An inventory of all unliquidated entries is created on a regular
    basis and these entries are compared to liquidation instructions that
    CBP has received from Commerce. Instances identified by CBP where
    entries are being held but for which specific liquidation instructions
    do not appear to have been issued are provided to Commerce for their
    research and action.
        Question. What mechanisms are being used currently to ensure that,
    when bills are sent to importers, they are paid? The trade community
    hears, unfortunately, that in many instances there is little or no
    follow-up by Customs on outstanding bills. Even if single entry bonds
    are required by Customs and proper proof of their existence is received
    by Customs, it is still important that the bills be collected because
    it is the importers who are required to pay, and if Customs merely
    expects to collect from bonding companies, two things result: (a) the
    amount of duties collected may be severely less than what is actually
    due and (b) the bonding companies may themselves be unable to pay if
    their exposure goes beyond their risk planning.
        Answer. CBP takes the following actions to collect delinquent bills
    from importers:
      --Monthly bills are issued and interest is assessed against an
            importer of record on unpaid billed amounts;
      --Refunds scheduled for payment to an importer of record are offset
            against open delinquent bills owed by that importer;
      --Sanctions are administered against an importer of record, that
            require payment of duties on merchandise currently being
            imported before the release of merchandise into the commerce of
            the U.S. permitted;
      --Formal demand for payment notices are issued and collection
            litigation actions are taken against any surety with a bond
            contract covering respective delinquent duty liability amounts;
            and
      --Litigation actions are taken against delinquent importers of record
            on any amounts remaining unpaid.

                           NOTICE AND PROTEST PROCESS

        Bills issued to importers of record are not delinquent until
    protest period authorized by law has expired or an applicable protest
    has been denied. Throughout the collection process, monthly bills are
    issued to the importer of record and in addition a formal office of any
    billed amount covered by surety bonds that remain unpaid are issued to
    the applicable surety. The importer of record can legally challenge
    their bill, thus aggressive collection efforts do not commence at this
    stage of the process until at least 90 days from the respective entry
    liquidation date has passed (19 USC 1541). If protest is filed, no
    aggressive collection action is taken until a final resolution of the
    protest. A surety may also file protest. On average, 45 percent of duty
    bills issued are protested. Interest charges are assessed throughout
    the billing process.

               AGGRESSIVE COLLECTION AGAINST DELINQUENT ACCOUNTS

        When protest is filed, in addition to regular monthly billing
    notices, dunning letters are sent to the importer of record demanding
    payment. When a protest is not filed or denied, additional dunning
    letters are sent to the applicable surety with appropriate background
    documents (CF 7501 (formal entry), liquidation worksheets, etc.) as a
    follow up to the monthly Formal Demand on Surety for Payment of
    Delinquent Bills (612 Report). During any period of delinquency,
    refunds payable to an importer of record are used to offset the
    delinquent debt they owe. Importers with delinquent bills are
    sanctioned, and accordingly must pay duties owed on current imports
    before the release of merchandise into the commerce of the United
    States is permitted. A surety bond serves as an additional security in
    the event that an importer goes out of business, files for bankruptcy
    or otherwise fails to timely a pay delinquent amount owed.

        Joint Customs and Border Protection and Immigration and Customs
                                  Enforcement

                        OVERSEAS OPERATIONS INTEGRATION

        Question. I have heard various reports of how the division of labor
    of formerly independent components now merged into DHS is working.
    While the melding of functions is proceeding apace stateside, the same
    personnel have no clear guidance as to how they are to operate
    overseas. Who is in charge of your agencies overseas? Does it vary from
    country to country? Does it make sense to have international affairs
    offices in both agencies? Do the operational and informational
    stovepipes, currently being eliminated here at home, still exist
    overseas? If so, what steps are each of you taking to eliminate them?
        Answer. The Office of the Secretary has initiated a detailed review
    of the role of DHS overseas, including the management structure that
    best advances the full range of the international liaison, enforcement,
    inspection and services missions of DHS.

                            UNMANNED AERIAL VEHICLES

        Question. The CBP budget includes a request of $10 million for
    testing and development of a UAV program. At the same time, I
    understand that ICE has been using its own funds to test the possible
    deployment of a series of UAVs along the Northern and Southern Borders
    to provide real time intelligence to inspectors and agents in the
    performance of their duties. What are the unique needs of each agency
    that would necessitate the need for development of two separate UAV
    programs?
        Answer. The Coast Guard operates primarily in the maritime domain
    along the coast and well offshore; the Border Patrol operates close to
    the border, between the ports of entry both in the maritime and
    terrestrial domain, but primarily in the terrestrial domain; and AMO
    operates in both areas but has additional requirements (e.g., airspace
    security) within internal airspace. Some overlap in geographical and
    mission requirements exits, and DHS is working to minimize those. All
    operations that support border security require a detection capability,
    and because of the operating environment, the platforms that provide
    that detection capability may need to be different in order to best
    meet the mission requirements. Therefore it makes sense that each
    component, as well as Science and Technology, be involved in the
    testing of UAVs.
        Question. How do these programs relate to one another and would not
    the Department's interests be best served by a joint program or one
    program which would meet the needs of both agencies (as well as
    potentially other DHS entities)?
        Answer. BTS and the Science and Technology (S&T) Directorates co-
    chair the working group that coordinate each components plans regarding
    use and testing of UAVs. Through the Joint Requirements Council (JRC)
    the Aviation Management Council, and the UAV Executive Steering
    Committee in conjunction with the UAV working group, the Department
    will ensure that UAVs will be tested, deployed and eventually procured
    in a way that meets the needs of the Department jointly. The UAV
    working group is currently participating in an analysis of alternatives
    (AoA) for aerial surveillance needs within BTS. Once this report is
    complete we will begin a process to establish a DHS-wide concept of
    operations (CONOP). The CONOP will identify unique needs and ensure
    that redundancy and overlaps are minimal and that systems procured and
    deployed on behalf of the DHS are interoperable. At the conclusion of
    the AoA, DHS will also determine the need for UAVs as a permanent asset
    for its components. It is likely that UAVs could support other current
    and emerging sensing technologies to monitor the U.S. borders between
    ports of entry, and their acquisition will be considered and evaluated
    in terms of cost and performance in view of all the other alternative
    contemplated.
        The data and results obtained in the component-specific deployments
    and feasibility studies will be shared within BTS, and the U.S. Coast
    Guard. The evaluations and tests already conducted by ICE/AMO the U.S.
    Coast Guard have been shared within the context of the working groups.
        Question. If not, please explain in detail how the Department can
    justify development of separate programs given limited resources.
        Answer. A coordinated effort for UAV development and testing is
    being addressed within the Department of Homeland Security.

                               TETHERED AEROSTATS

        Question. What is the value of the aerostat system to the DHS
    interdiction and border security mandate?
        Answer. At the lower altitudes in which many suspect aircraft
    operate, the Tethered Aerostat Radar System (TARS) is the main source
    of data, which the AMO uses to sort targets and determine operational
    responses. The Tethered Aerostat Radar System (TARS) for Border and
    Transportation Security (BTS) is a critical component in the
    interdiction of illicit air traffickers as well as our border security
    system. It is the only fixed system that provides low-level radar
    coverage (100-500 feet above ground level) of air targets with
    altitude, speed, heading, and Identifier Friend or Foe (electronic
    transponder) capability. The system also provides a platform for radio
    relay equipment. Without TARS, radar coverage along the southern border
    of the United States and Puerto Rico is severely diminished. Also,
    modified TARS are able to provide surveillance of maritime targets in
    coastal regions and limited land targets. The sea and land capabilities
    of the system are not being employed.
        Today, nearly all of our joint air interdiction efforts in Northern
    Mexico are directly attributable to TARS. When TARS coverage is not
    available, BTS (ICE AMO) must rely upon scarce and much more expensive
    systems in an attempt to fill the resultant surveillance gaps.
    Currently, the alternative is to use our airborne early warning (AEW)
    aircraft (low density/high demand and high cost assets). AEW costs can
    be 6-14 times higher than the cost per hour of TARS coverage and their
    availability is limited since they are tasked with missions in the
    source and transit zones, in addition to other homeland security
    flights.
        Question. Has there been an impact from the non-operational status
    of the Lajas, PR TARS? If so, what are the impacts from the loss of
    Lajas TARS?
        Answer. Prior to the shutting down of the Lajas, PR, TARS site, the
    vast majority of suspect air tracks avoided approaching or attempting
    to land or over fly the land mass of Puerto Rico, opting instead to
    transit to Hispaniola to the west and the Virgin Islands to the east.
        Since Lajas was the primary tracking sensor for this area, the
    impact of the loss of its information is difficult to assess. However,
    until the site returns to operational status, AMO will continue to
    monitor the changing threat picture through the use of limited tracking
    information from FAA radar, intelligence assessments, and post-seizure
    analysis of interdictions.
        Question. Should this TARS remain in non-operational status, what
    are the prospects for future drug interdiction efforts in Puerto Rico
    and the Caribbean? Are there other locations where the aerostats had
    existed and were removed (i.e. The Bahamas)? What was the impact to
    drug interdiction resulting from the removal of those assets?
        Answer. The system's greatest potential would be achieved as a
    series of TARS sites linked to form a continuous radar detection
    blanket that reaches 150 miles beyond the U.S. border. Maintaining a
    complete ``radar fence'' is imperative for several reasons.
      --An effective surveillance system of this type serves multiple
            national objectives including:
        --Homeland Security--counter illicit traffickers (air, land and
                sea) and unauthorized border incursions
        --Air sovereignty/Advanced Airborne Early Warning
        --Air Traffic Control, flight safety
      --The U.S. Interdiction Coordinator reports:
        --Suspicious air tracks in the CENTAM corridor increased from 50 to
                200 in 2003
        --Air seizures increased ten-fold in 2003 over the 10-year average
        --Maritime successes have forced drug traffickers to alter their
                methods to air routes.
      --The illicit trafficking and unauthorized border incursion threat
            vectors continually change. Therefore, we need a system that is
            effective against all threat vectors.
        Question. There has been some discussion regarding the possible
    transfer of the aerostat systems from the Defense to Homeland Security
    departments. Though DOD is the owner of these assets, I understand that
    DHS is the primary consumer of the intelligence they collect. Do you
    feel that the Defense Department has adequately considered the needs of
    DHS, or consulted with you, regarding the continued operation of these
    aerostats? What is the Department's position on such a future transfer
    of responsibility of these TARS systems?
        Answer. DHS believes that this critical system supports homeland
    security and provides a critical detection and monitoring capability.
    That mission is a DOD responsibility. Operation of TARS should remain
    in DOD.

                                 CROSS-TRAINING

        Question. Representatives of the Department of Homeland Security
    Council (the union comprised of legacy INS employees) reported at a
    press conference on March 3 that no more than 5 percent of Immigration
    and Customs enforcement personnel have received cross-training. When
    does DHS expect to complete cross-training of all existing personnel?
    What percentage of all needed cross-training is funded in the
    President's fiscal year 2005 budget proposal?
        Answer. OI conducted a manual survey the last week of March 2004.
    At that time 830 Special Agents had completed the cross-training. This
    accounts for 19 percent of the 4,463 agents targeted for cross-training
    in this fiscal year. The Automated Class Management System is expected
    to be on-line shortly. At that time, training statistics will be more
    readily available.
        OI has established a target to complete the cross-training for all
    non-supervisory Special Agents GS-05 through GS-13 by the end of fiscal
    year 2004. This cross-training will be accomplished using a train-the-
    trainer format with initial training being conducted at the Federal Law
    Enforcement Training Center (FLETC).
        Cross-training beyond this priority group will be completed in
    fiscal year 2005 and will be funded out of base dollars.

                                 PAY DISPARITY

        Question. A pay disparity of a full grade exists between
    Immigration Special Agents (GS-12) and Customs Special Agents (GS-13).
    It appears that the new regulations proposed by the Administration
    would hide this disparity within a pay scale, rather than addressing it
    directly. Is this correct? If so, what impact is this disparity having
    on morale within ICE
        Answer. Issues regarding ICE Criminal Investigator pay parity have
    been resolved. Over the last year, we gave careful thought to the many
    variables involved in this matter prior to integrating the new duties
    of the national security and counter-terrorism mission with the legacy
    Customs and INS duties. During this time, we submitted proposals to
    resolve the issues related to this integration to a sample of the CI
    population and higher level ICE and DHS management to give this
    sensitive matter the care and consideration it deserved, all of which
    took time. All ICE CIs will be assigned to the new position
    descriptions. Employees will be either reassigned at their current
    grade level or promoted if all eligibility requirements are met with an
    effective date of May 2, 2004. We believe this action will enhance
    ICE's ability to fulfill its mission, which in turn can improve morale,
    productivity and, ultimately, performance of crucial work in national
    security and terrorism investigations. Based upon this action, all ICE
    CIs will be similarly situated once the new HR system is finalized and
    implemented.

                             ASSET FORFEITURE FUND

        Question. Many of the programs now under the purview of ICE were
    enhanced by a productive working relationship with the Treasury
    Forfeiture Fund. This working relationship still exists today.
    Typically, the agencies that contributed to the fund were able to draw
    on the same funds to increase mission capabilities in many areas. This
    process worked well.
        I understand, however, that there are plans to cede control of this
    Fund to the Department of Justice. Are you concerned about losing
    access to the asset forfeiture fund? What impact would it have on your
    investigations if your agency were not able to have access to the
    resources that you have, in fact, contributed to the Fund?
        Answer. As you note, the Administration has proposed to
    consolidation of the Government's Asset Forfeiture Funds within the
    Department of Justice. Consolidating operation of these funds offers
    enormous opportunities for efficiency gains and reductions to overhead
    costs.
        If the consolidation proposal is approved by the Congress, DHS will
    work with the Department of Justice to ensure that its proceeds from
    the fund are maintained and disbursed appropriately. The Department
    does not expect the proposed consolidation of the funds and their
    administration to affect the availability of fund balances or its
    future proceeds.
        Question. Is consideration being given to creating a separate/new
    Department of Homeland Security Asset Forfeiture Fund to which all DHS
    components would contribute and have access?
        Answer. The Administration has proposed to consolidate the
    government's Asset Forfeiture Funds at the Department of Justice. There
    is no current Administration proposal to establish a Department of
    Homeland Security Asset Forfeiture Fund.

                      Immigration and Customs Enforcement

                              WORKSITE ENFORCEMENT

        Question. In its 1997 Executive Summary, the U.S. Commission on
    Immigration Reform found that ``reducing the employment magnet is the
    lynchpin of a comprehensive strategy to deter unlawful migration.''
    Despite this fact, worksite enforcement has been last on the list of
    enforcement priorities. According to a Jan. 11, 2004 article published
    in the San Diego Union-Tribune, arrests of illegal aliens at worksites
    have dropped from 8,027 in 1992 to 1,254 in 2002, and the number of
    Notices of Intent to Fine has dropped from 1,063 to 13. The explanation
    for this drop in enforcement, according to Joe Greene, deputy assistant
    director of ICE, is that employer sanctions don't work and that they
    ``didn't seem to be making a dent in changing the practices of
    employers.'' Does Mr. Greene's statement represent the official policy
    of the Bush Administration?
        Answer. Since September 11, 2001, ICE's worksite enforcement role
    has gone beyond that of merely reducing the job magnet. It has become a
    matter of national security. As a measure of its role in national
    security, the ICE Headquarters Worksite Enforcement Unit (now called
    the Critical Infrastructure Protection unit) has been aligned under the
    National Security Division. In the interest of national security, ICE
    is increasing its worksite enforcement efforts and has instructed its
    field offices to focus their worksite enforcement investigations on
    Businesses of National Interest (BNI). ICE defines a BNI as a private
    or public entity that provides goods or services vital to our national
    security and economy, or whose infiltration would pose a serious threat
    to our domestic security.
        Question. Your proposed $23 million increase is just a drop in the
    bucket. Do you believe that the failure to make worksite enforcement a
    more important priority is one of the reasons that there are between 8
    and 11 million aliens illegally present in the United States today?
    Please provide a list of the number of worksite enforcement actions
    undertaken each year between 1999-2003.
        Answer. There are numerous overlapping factors contributing to the
    Nation's illegal immigration problem. Worksite enforcement is just one
    of the immigration enforcement programs that ICE administers.
    Statistics show that ICE initiated more worksite enforcement/critical
    infrastructure protection cases during fiscal years 2002 and 2003 than
    there were in fiscal years 1999 and 2000.

    ----------------------------------------------------------------------------------------------------------------
                                                                                         Fiscal year
                                                                        --------------------------------------------
                                                                           1999     2000     2001     2002     2003
    ----------------------------------------------------------------------------------------------------------------
    Cases initiated....................................................    2,834    1,766      856    3,428    1,547
    ----------------------------------------------------------------------------------------------------------------

                                   BENCHMARKS

        Question. The ICE budget requests increases for the detention and
    removal and institutional removal programs. What benchmarks does the
    agency use to determine the specific benefits which will be achieved
    through these increases? What performance measures are used to
    determine the effectiveness of these programs?
        Answer. DRO is currently developing a new performance measure to
    demonstrate the expected outcome of improved IRP management. This
    measure shows the percentage of IRP removals that had received a final
    order of removal prior to the completion of the criminal sentences and
    prior to release into DRO custody. In numerical terms it will be
    expressed as: number of cases with pre-release final orders/total
    number of IRP removals.
        Reaching 100 percent on this measure would mean that DRO does not
    have to expend detention resources on IRP cases that are still awaiting
    a decision from an immigration judge. All IRP cases would already have
    a removal order when they complete their criminal sentence, and they
    would only need to be detained by DRO for the time that it would take
    to arrange and conduct the removal. This would mean a much more
    efficient use of resources. Because this measure has not been used
    before, it will be baselined at the end of fiscal year 2004.
        Canine Teams Last week, as part of his rail and transit security
    initiative, Secretary Ridge said that the Department will develop a
    rapid deployment Mass Transit K-9 program by using existing Homeland
    Security explosive K-9 resources, including those of the Federal
    Protective Service.
        Once again, it appears that the Department is robbing Peter to pay
    Paul. It appears that the Department will be pulling K-9 teams away
    from airports and the protection of Federal buildings and using them
    for mass transit, thus degrading security in one transportation mode to
    begin beefing up security in another mode. By refusing to seek
    additional funds to address this very real threat it truly calls into
    question the seriousness of this Administration in its effort to secure
    the homeland.
        Question. Does the initiative announced last week mean that you
    will be pulling existing K-9 teams away from protecting Federal
    buildings or from airports to use them for rail and mass transit
    security?
        Answer. In support of Department of Homeland Security (DHS) efforts
    to strengthen rail and transit security, the Federal Protective Service
    was tasked to develop a plan for ensuring the availability of Explosive
    Detector Dog (EDD) support, if and when required. The intent of the
    initiative is to be ready to surge EDDs to an area needing heightened
    security if that becomes necessary. The law enforcement elements of the
    DHS have established EDD capability in support of their primary
    missions. Most of these elements maintain existing cooperative
    relationships with the state, local, and transit authorities within
    their local jurisdictions whereby they participate in joint training
    exercises, share information, and respond to requests for support and
    assistance on an ad hoc basis. The plan for the EDD-RDF builds upon
    these existing relationships and expands it to ensure that DHS EDD
    support is available to all jurisdictions across the Nation. The
    mission of the EDD-RDF will be to provide expanded capability to mass-
    transit systems within the United States by assisting State, local, and
    transit authorities in the event of an increased threat situation. The
    EDD-RDF is designed to enhance security and explosive detection
    capabilities, as well as to provide a strong psychological deterrence
    to terrorist activities. The RDF consists of existing DHS EDD assets,
    and will be available 24-hours a day, 7-days a week. The EDD teams
    should be able to deploy to any location within the United States
    within 24 hours. Deployments will be based on specific intelligence
    developed within the DHS, response to specific requests for
    augmentation, or actual incidents.

                   LIMITED IMMIGRATION ENFORCEMENT RESOURCES

        Question. Your budget request for fiscal year 2005 represents a
    more than 9 percent increase over the funding level provided by
    Congress for this year. While this is a step in the right direction,
    the fact remains that limited budget resources constrain you in the
    various types of activities your personnel can take to enforce existing
    immigration laws--much less implement a sweeping alien amnesty law such
    as the President has suggested. It calls into question the importance
    the Administration places on immigration enforcement.
        I realize that your budget requests incremental increases in
    programs such as institutional removal, fugitive operations,
    alternatives to detention, worksite enforcement, compliance teams, and
    benefit fraud operations. But these increases are not sufficient.
        I do not know what the budget resolution's topline discretionary
    spending level will be, nor do I know what allocation this Subcommittee
    will receive. However, if we were able to find additional resources for
    immigration enforcement, where would you suggest we provide additional
    funds?
        Answer. The President's fiscal year 2005 Budget provides sufficient
    resources for immigration enforcement by more than doubling the number
    of worksite investigations currently performed by ICE.

                                    CHIMERA

        Question. The Enhanced Border Security and Visa Entry Reform Act
    requires all immigration databases to be made interoperable and,
    eventually, combined into the Chimera data system, which is to include
    all known immigration, law enforcement, and intelligence data on
    aliens. What progress has been made thus far on creating the Chimera
    data system? What roles are ICE and DHS playing in this process? Which
    agency has the lead in ensuring that the Chimera system is created?
        Answer. On the 28th of October 2002 the former Immigration and
    Naturalization Service published an informational document regarding a
    comprehensive information technology planning and infrastructure
    modernization program called ``Atlas''. That document was entitled the
    ``Atlas Business Case'' and provided a concise high-level view that
    demonstrated the INS' confidence in Atlas' strategic, technical, and
    financial merits. The business case reflected investment principles,
    emulation of industry best practices, and compliance with the Clinger-
    Cohen Act of 1996, as well as with other related legislative and
    government guidance.
        Consistent with the urgencies of the Government's post-September 11
    security agenda, the Atlas Business Case was subsequently socialized
    and promoted within the Department of Justice and sent to the Hill for
    budgetary consideration. It was understood that the Atlas Program would
    be the fundamental IT infrastructure foundation on which INS business
    applications would operate. In its business case, the former INS
    illustrated that the successful Atlas transformation strategy would
    hinge upon a robust IT infrastructure containing a secure, scalable
    backbone that would support all INS business processes. Atlas, it was
    shown, would also provide database interoperability at the
    infrastructure level and support data sharing at the applications
    level. From the beginning, the Atlas design strategy also supported
    emerging Department of Homeland Security (DHS) requirements. Unlike the
    previous environment, Atlas was proposed to reside within an integrated
    Enterprise Architecture (EA) that would harmonize the following:
      --System hardware, including mainframes and servers
      --Data services, including data and voice circuits
      --Data communication equipment, including servers, switches, local
            area networks (LAN), wide area networks (WAN), routers, and
            cabling
      --Computer security, information assurance activities and enterprise
            information. This, specifically, is the area that would later
            come to be identified as the focus area for the suggested
            Chimera project.
      --Workstations, including personal computers and laptops and
            enterprise-wide software (i.e., office automation, e-mail,
            operating system, etc.)
      --Operational support to maintain and operate the modernized IT
            infrastructure
        Perhaps in contemplation of partitioning and re-tasking of the
    former INS and its resources, or perhaps in calculating the initial
    complexity and cost of implementing Atlas, a counter-suggestion was
    made in committee and transmitted back to the Department of Justice and
    the former INS that certain specific information security and assurance
    attributes of Atlas could be separately expedited and put into action
    under a new initiative tentatively labeled ``Chimera''.
        However, other program initiatives under way at former INS and the
    new Department of Homeland Security were also addressing the same
    security concerns. In particular, the ``US VISIT'' program had pursued
    the same set of concerns and an active, high-precision approach for
    addressing critical information security and assurance requirements.
        Because of the US VISIT Program's ongoing and comprehensive
    approach to information security and assurance requirements within the
    DHS sphere of immigration-related operations, Chimera has been
    suspended and is being revisited to determine its potential as a
    duplicative effort.

                                 ALIEN REMOVALS

        Question. Please compare criminal and non-criminal alien removals
    from 1990-2003.
        Answer:
    Removals: Criminal and Non-criminal
        The following data were collected in the Deportable Alien Control
    System (DACS). These data include expedited removals. The criteria for
    categorizing criminal/non-criminal and the data system used to capture
    the data have been consistent since fiscal year 1993. Prior to fiscal
    year 1993 the criteria were slightly different. In addition, multiple
    data systems were used to collect the data and not all those data
    systems supported the 1993+ criteria (see separate table below).

    ----------------------------------------------------------------------------------------------------------------
                                                                                         Criminal      Non-criminal
                               Fiscal year                            Total removals     removals        removals
    ----------------------------------------------------------------------------------------------------------------
    1993............................................................          42,542          29,458          13,084
    1994............................................................          45,674          32,512          13,162
    1995............................................................          50,924          33,842          17,082
    1996............................................................          69,680          38,015          31,665
    1997............................................................         114,432          53,214          61,218
    1998............................................................         173,146          60,965         112,181
    1999............................................................         180,948          70,417         110,531
    2000............................................................         186,056          72,114         113,942
    2001............................................................         177,818          72,434         105,384
    2002............................................................         150,237          71,636          78,601
    2003............................................................         188,292          80,355         107,937
    ----------------------------------------------------------------------------------------------------------------

                            PRE-FISCAL YEAR 1993 STATISTICS ON CRIMINAL/NON-CRIMINAL REMOVALS
    ----------------------------------------------------------------------------------------------------------------
                                                                                         Criminal      Non-criminal
                               Fiscal year                            Total removals     removals        removals
    ----------------------------------------------------------------------------------------------------------------
    1990............................................................          30,039           8,971          21,068
    1991............................................................          33,189          14,475          18,714
    1992............................................................          43,671          20,098          23,573
    ----------------------------------------------------------------------------------------------------------------

                                ARREST AUTHORITY

        Question. As part of the 1990 Immigration Act, Congress authorized
    general arrest authority for all immigration law enforcement officers.
    INS never developed regulations to implement this authority. Has DHS
    developed such regulations?
        Answer. Yes, ICE issued a memo implementing general arrest
    authority for the ICE Office of Investigations and Detention and
    Removal in November 2003.

                              WORKSITE ENFORCEMENT

        Question. The President's budget proposal would increase funding
    for worksite enforcement by $23 million. It also proposes the addition
    of 150 ``work certification'' positions--a position that does not
    currently exist. Does the inclusion of this additional funding mean
    that worksite enforcement will become a higher priority for ICE? What
    priority will DHS give the nationwide expansion of the workplace
    verification pilot programs, as passed by Congress late last year?
        Answer. Enforcement efforts targeting companies that break the law
    and hire illegal workers will need to increase in order to ensure the
    integrity of the temporary worker system. President Bush's Fair and
    Secure Immigration Reform proposal provides for an enhanced worksite
    enforcement program, and the $23 million requested for fiscal year 2005
    for worksite enforcement will allow ICE to enhance its worksite
    enforcement program and provide credible deterrence to the hiring of
    unauthorized workers. ICE worksite enforcement investigations generally
    involve a review of company employment records to verify the
    immigration status of workers and to determine if the employer has
    committed any violations. ICE special agents also conduct extensive
    outreach initiatives to educate employers as to their legal
    responsibilities.
        Additionally, the Basic Pilot Program, an automated system
    administered by USCIS, enables employers to verify the immigration
    status of newly hired workers. It is currently available in six States
    but, we understand, will be available to employers in all 50 States by
    the end of this year. This is a voluntary program and is currently
    provided at no cost to employers. Information on the Basic Pilot
    Program is available to the public on the USCIS website.
        Question. Does the President's budget proposal include sufficient
    funding to meet the December deadline for nationwide expansion of the
    pilots? Will the new ``work certification'' agents work exclusively to
    enforce employer sanctions? What increase in ``Notices of Intent to
    Fine'' can be expected from these 150 positions and the doubling of
    funding?
        Answer. If the new special agent positions are funded and
    designated for the worksite enforcement program, it is anticipated that
    they will be used in that capacity. It is difficult at this point to
    project the increase in Notices of Intent to Fine that will be
    accomplished by the enhancements due to factors such as the rate at
    which the new personnel can be hired, trained and deployed. The budget
    enhancement will enable ICE to place additional emphasis on a
    traditional worksite enforcement program that offers credible
    deterrence to the hiring of unauthorized workers while retaining its
    focus on a Critical Infrastructure Protection program that has produced
    national initiatives such as Operation Tarmac and Operation Glowworm.
        Question. In May 1998, the Commissioner of the INS announced a new
    internal policy on workplace enforcement efforts. This policy required
    approval of a written ``operation plan'' by a District Director, a
    Regional Director, the Public Affairs Office, and the Community
    Relations Office before any worksite enforcement operation to arrest
    ``one or more unauthorized aliens'' could be undertaken. This policy
    was reiterated in a memo to field agents at least as recently as Feb.
    13, 2002.
        Is this policy still in place?
        If so, isn't it unlikely that there will be any increase in
    worksite enforcement, considering the obstacles set up by this policy?
        If not, what is the current policy?
        Answer. No, the old policy is no longer in place. Current policy,
    which went into effect on July 24, 2003, states that a Special Agent in
    Charge (SAC) may approve a Worksite Enforcement Operation Plan that
    targets a Business of National Interest (BNI). A SAC may, at his or her
    discretion, delegate this authority to an Associate Special Agent in
    Charge, or Acting. The Chief of the Headquarters Critical
    Infrastructure Protection unit must approve any worksite enforcement
    investigation or enforcement operation that targets an employer or
    entity that is not a BNI.
        Question. Has someone within DHS been tasked with the job of
    reviewing all old policies and recommending changes to those that
    actually deter enforcement?
        Answer. Old policies are reviewed to assure they contribute to
    enhancing enforcement rather than hindering it
        Question. The State Criminal Alien Assistance Program provides
    reimbursement to States for the costs of incarcerating alien murderers,
    rapists, child molesters, drug smugglers and other criminal aliens. The
    President's budget proposal eliminates all funding for SCAAP.
        Is DHS proposing an alternative to States incarcerating these
    criminal aliens or does it expect the costs of incarcerating criminal
    aliens to drop dramatically in the next year? And if so, on what basis?
        Answer. For fiscal year 2005, the Administration proposes
    significant investments in border control and immigration enforcement
    efforts. For U.S. Customs and Border Protection (CBP), the President
    proposes in enhance Border Patrol Surveillance and Sensor Technology by
    $64 million for the continued expansion of the Remote Video System
    along the southern and northern borders thereby increasing the
    effectiveness of Border Patrol Agents. The expanded system will provide
    for significantly enhanced detection and monitoring capability between
    the ports of entry and increase officer safety. In addition, the fiscal
    year 2005 Budget seeks $10 million to develop, procure, deploy, and
    operate a system of unmanned aerial vehicles to support the Border
    Patrol and other components of CBP.
        In addition, the fiscal year 2005 President's Budget proposes
    enhancements for numerous immigration enforcement efforts of the U.S.
    Immigration and Customs Enforcement. Funds sought will support enhanced
    compliance teams, detention and removal efforts, and international
    enforcement efforts related to immigration and visa security. These
    efforts will enhance our border security and bolster our ability to
    enforce our Nation's immigration laws.

                             INVESTIGATIVE EMPHASIS

        Question. One area of concern that legacy immigration personnel
    have is whether Customs personnel and issues are dominating the
    immigration side of the equation in the Bureau of Immigration and
    Customs Enforcement, so that enforcement of immigration laws is given
    lower priority than enforcement of customs laws.
        What is the number of ICE Special Agents in Charge who are ``legacy
    Customs'' personnel? What is the number of ICE Special Agents in Charge
    who are ``legacy INS'' personnel?
        Answer. As of April 27, 2004, there are 27 SAC offices. Assignments
    are as follows:
      --16 have ``legacy Customs'' personnel permanently assigned as SACs.
      --3 have ``legacy INS'' personnel permanently assigned as SACs.
      --Of the 8 remaining, the acting supervisors are: 7 ``legacy
            Customs'' and 1 ``legacy INS''.
      --Permanent selections in progress: 2 have ``legacy Customs''
            selectees and 1 has a ``legacy INS'' selectee.
        Question. What is the number of ICE Senior Executive Service (SES)
    positions in the Investigations program occupied/encumbered by ``legacy
    Customs'' personnel? What is the number of ICE Senior Executive Service
    (SES) positions in the Investigations program occupied/encumbered by
    ``legacy INS'' personnel?
        Answer. There are 22 SES positions in the Office of Investigations.
    Seventeen (17) are filled with ``legacy Customs'' personnel and 5 are
    filled with ``legacy INS'' personnel.
        Question. What is the number of ICE GS-15 supervisory positions in
    the Investigations program occupied/encumbered by ``legacy Customs?''
    What is the number of ICE GS-15 supervisory positions in the
    Investigations program occupied/encumbered by ``legacy INS?''
        Answer. As of April 27, 2004, there were 68 GS-1811-15s in the
    Office of Investigations, 52 of which are ``legacy Customs'' and 16 are
    ``legacy INS''.
        Question. What is the number of ICE HQ component or division chief
    positions in the Investigations program occupied/encumbered by ``legacy
    Customs?'' What is the number of ICE HQ component or division chief
    positions in the Investigations program occupied/encumbered by ``legacy
    INS?''
        Answer. There are 5 divisions at Headquarters in the Office of
    Investigations. Three of those divisions are headed by ``legacy
    Customs'' personnel and 2 are headed by ``legacy INS'' personnel.
        Question. Some have indicated that ``legacy Customs'' personnel,
    particularly in managerial positions, have not diligently attended to
    their duty to enforce immigration provisions now under the ICE mandate,
    essentially treating customs as more important than immigration
    enforcement. What steps are being taken to ensure that former Customs
    personnel do not neglect their duty to enforce immigration laws?
        Answer. In ICE, legacy INS and Customs investigators are being
    cross-trained to maximize law enforcement authorities and capabilities.
    This force multiplier is intended to expand the capability of our newly
    shared authorities in the area of investigations and intelligence. Each
    individual ICE agent has a responsibility to utilize all of the tools
    in his/her collective INS and Customs enforcement arsenal to identify,
    investigate, prevent and deter criminals or terrorists from exploiting
    vulnerabilities as a means of harming our country.
        Question. What is the number of 1801-series Detention & Removal
    Officers in ICE? Whereas the 1801s are responsible for carrying out the
    administrative enforcement and removal provisions of the immigration
    code, how are they distributed nationwide? How are they empowered to do
    their duty more effectively and efficiently using technology and in
    coordination and cooperation with State and local law enforcement?
    Answer:

    ------------------------------------------------------------------------
                                                                Immigration
                    District                    Deportation     Enforcement
                                                  Officer          Agent
    ------------------------------------------------------------------------
    Anchorage...............................               5               4
    Atlanta.................................              25              35
    Baltimore...............................              21              23
    Boston..................................              32              45
    Buffalo.................................              21             113
    Chicago.................................              37              42
    Cleveland...............................               4               3
    Dallas..................................              29              46
    Denver..................................              21              56
    Detroit.................................               9               8
    HQ......................................              86               0
    El Centro...............................               0              11
    El Paso.................................              35             133
    Helena..................................               6              12
    Honolulu................................               8               9
    Harlingen...............................              31             130
    Houston.................................              41              50
    Kansas City.............................              13              28
    Los Angeles.............................              84             145
    Miami...................................              57             178
    Newark..................................              42              43
    New Orleans.............................              40              88
    New York City...........................              59             158
    Omaha...................................               7              23
    Philadelphia............................              35              42
    Phoenix.................................              51             162
    Portland, ME............................               2               4
    Portland, OR............................               8              21
    San Juan................................              11              42
    Seattle.................................              23              36
    San Francisco...........................              44              85
    San Antonio.............................              24              79
    San Diego...............................              60             222
    St. Paul................................               9              16
    Washington, DC..........................              18              14
                                             -------------------------------
          Total.............................             998           2,106
                                             ===============================
          Grand Total.......................               3,104
    ------------------------------------------------------------------------

        DRO is directly involved with State and local law enforcement
    agencies in the search and apprehension of fugitives. DRO continues to
    expand the use of technology in an effort to apprehend fugitive aliens.
    A recent example is providing the officers of the Miami Fugitive
    Operations Team with Blackberry devices. A Blackberry device will
    eventually enable Officers to search names in NCIC (criminal history)
    and the Division of Motor Vehicles. In addition, we are entering into
    an agreement with the United States Marshals Service to expand our
    databases. The agreement will allow DRO and the USMS to compare
    databases on warrants and select and search for fugitives of joint
    interest. DRO is also planning to purchase laptop computers with
    wireless modems so Officers can conduct field inquires. DRO is
    expanding the use of commercial databases containing biographical
    information on a person, such as last known address, in an effort to
    locate and apprehend fugitives.
        Question. What is the number of 1811-series Special Agent/Criminal
    Investigator personnel in ICE? How are they distributed geographically?
    Whereas 1811s are the ``detectives'' responsible for complex,
    protracted investigative casework largely dealing with the criminal
    provisions of the immigration code, how do they coordinate and
    cooperate with both 1801s and with State and local law enforcement,
    especially pursuant to cases where State or local officers encounter an
    alien lawbreaker?
        Answer. As of April 27, 2004, there were 5,464 special agents
    assigned to the Office of Investigations, as follows.

    ------------------------------------------------------------------------
                    Organizational Component                     On Board
    ------------------------------------------------------------------------
    HQ--Office of Investigations............................             289
    SAC Atlanta, GA.........................................             181
    SAC Baltimore, MD.......................................              78
    SAC Boston, MA..........................................             155
    SAC Buffalo, NY.........................................             109
    SAC San Juan, PR........................................             128
    SAC Chicago, IL.........................................             312
    SAC Dallas, TX..........................................             139
    SAC Denver, CO..........................................             109
    SAC Detroit, MI.........................................             175
    SAC El Paso, TX.........................................             220
    SAC Houston, TX.........................................             206
    SAC Los Angeles, CA.....................................             389
    SAC Miami, FL...........................................             335
    SAC Newark, NJ..........................................             143
    SAC New Orleans, LA.....................................             221
    SAC New York, NY........................................             382
    SAC St Paul, MN.........................................              96
    SAC San Antonio, TX.....................................             315
    SAC San Diego, CA.......................................             330
    SAC San Francisco, CA...................................             260
    SAC Seattle, WA.........................................             216
    SAC Tampa, FL...........................................             177
    SAC Tucson, AZ..........................................             143
    SAC Phoenix, AZ.........................................              95
    SAC Washington, DC......................................             108
    SAC Philadelphia, PA....................................             107
    SAC Honolulu, HI........................................              46
                                                             ---------------
          TOTAL.............................................           5,464
    ------------------------------------------------------------------------

        A key objective of DHS and ICE is to share information with our
    State and local partners in law enforcement that contributes directly
    to the security and safety of the United States and the American
    people. The Law Enforcement Support Center (LESC) in Vermont is the
    vital DHS and ICE point of contact with the entire law enforcement
    community and is on the cutting edge of the Federal effort to share
    critical enforcement information with state, county, local and even
    international law enforcement officers. It is a national, single point
    of contact, law enforcement center that provides timely immigration
    status and identity information and real-time assistance to local,
    state and Federal law enforcement agencies on aliens suspected,
    arrested or convicted of criminal activity. The primary user of the
    LESC continues to be State and local law enforcement officers seeking
    information about an alien encountered in the course of their daily
    duties.
        Question. Is ICE requiring both legacy Customs and legacy INS
    enforcement personnel to attend cross-training programs? What
    percentage of legacy Customs vs. INS personnel has actually completed
    such training? Does ICE intend that all enforcement personnel will
    undergo such cross-training, and if so, when is it expected to be
    completed?
        Answer. Yes, all OI Special Agents will be cross-trained in both
    legal and investigative blocks of instruction.
        OI conducted a manual survey the last week of March 2004. At that
    time 830 Special Agents had completed the cross-training. This accounts
    for 19 percent of the 4,463 agents targeted for cross-training in this
    fiscal year. Of the 830 who have completed the cross-training, 57
    percent are legacy immigration agents and 43 percent are legacy customs
    agents. The Automated Class Management System is expected to be on-line
    shortly. At that time, training statistics will be more readily
    available.
        OI has established a target to complete the cross-training for all
    non-supervisory Special Agents GS-05 through GS-13 by the end of fiscal
    year 2004. This cross-training will be accomplished using a train-the-
    trainer format with initial training being conducted at the Federal Law
    Enforcement Training Center (FLETC).
        Cross-training beyond this priority group will be completed in
    fiscal year 2005.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy

        Question. Mr. Bonner, Mr. Garcia, there is now a hiring freeze in
    place at both your agencies, as well as at Mr. Aguirre's agency, and I
    understand you are facing a budget shortfall of more than 12 percent.
    It is outrageous to hear about a hiring freeze in critical national
    security agencies after the Bush Administration has strongly opposed
    attempts by the Ranking Member and many many others in Congress to
    increase funding for DHS. How could this have happened, and what
    funding does Congress need to provide so you can at least replace law
    enforcement agents who resign from your agencies?
        Answer. The budgets for our agencies have increased substantially
    since fiscal year 2001 and we are not facing a budget shortfall. As a
    result of budget reviews of our agencies and the Department, we
    supported a hiring freeze as a prudent measure in the face of
    uncertainties in budget allocation and adjustments in fee collection
    forecasts.
        The Department established a review team composed of staff from the
    CFO's Office, BTS, CIS, and the Coast Guard to assess the situation.
    The review team engaged in a detailed budget reconciliation effort
    among the three Bureaus. The team examined the allocation of resources
    and services throughout the three Bureaus, and this effort resulted in
    an immediate internal realignment of $212 million. A subsequent
    internal realignment of approximately $270 million is possible, pending
    additional discussions and coordination of the final documentation and
    billing.
        The Congress has recognized that funds may need to be realigned
    between ICE, CBP, and CIS. In the Joint Explanatory Statement (H. Rpt.
    108-280) accompanying the Department of Homeland Security
    Appropriations Act, 2004 (Public Law 108-90), the Congress recognized
    that the budgetary resources may need to be realigned. Specifically,
    the Congress noted: ``The conferees are aware that the Department is
    conducting a comprehensive review of administrative and other mission
    responsibilities, particularly as they affect ICE and other agencies
    that have inherited multiple legacy missions. While funding provided by
    this conference agreement is based on the best possible information
    available, the conferees understand there may be a need to adjust
    funding to conform to the decisions resulting from the review.'' A
    similar statement was included under the heading discussing CBP.
        Over the past year, these three Bureaus have undergone major,
    successful reorganizations by incorporating programs, staff, and
    resources from legacy programs at the Immigration and Naturalization
    Service and the Customs Service (as well as the General Services
    Administration and the Department of Agriculture) and a realignment of
    functions to strengthen the security of the Nation. Through this
    process, which included successful reassignment of over 50,000
    employees from the legacy agencies, robust hiring continued to ensure
    adequate staffing to accomplish mission objectives. However, the
    transformation effort has not been without challenges and each Bureau
    continues to integrate everything from budgets to uniforms to Standard
    Operating Procedures in virtually every area. We have made great
    progress to date.
        During a review of the status of execution of the fiscal year 2004
    budget, the ICE and CBP determined that implementation of hiring
    restrictions was a prudent managerial measure not just to stay within
    2004 appropriations, but for mission-related objectives. CIS had
    already instituted hiring restrictions since the beginning of the year
    due to lower than anticipated fee projections. Additional focus was,
    and is required to work through funding realignments related to the
    establishment of the three new Bureaus. This work recognized the
    tremendous effort of the Administration and the Congress to establish
    the Department but also acknowledged that some of the finer details on
    funding and provision of support services required negotiations and
    reconciliation between the three Bureaus. The work has been on-going,
    but agreements have been recently reached to realign funds to cover
    costs of services incurred by the Bureaus. Formal memoranda of
    agreement will be implemented between the three Bureaus, which will
    help ensure that funding is aligned with services rendered.
        The Department is committed to the security of the Nation and we
    will continue to work towards successful establishment of the three
    Bureaus, CBP, CIS, and ICE. To that end, we will continue to work with
    the Congress, in particular through the appropriations process, to
    ensure that funds are aligned to mission objectives consistent with
    Congressional intent.
        Question. Mr. Garcia, I am pleased that you and other components of
    the Executive Branch are making such good use of the Law Enforcement
    Support Center, located in my home State of Vermont--including its role
    in Operation Predator. The LESC provides information to State and local
    police departments throughout the Nation, regarding the immigration
    status and identities of aliens suspected, arrested, or convicted of
    criminal activity. You joined me in Vermont last August to announce
    expanded capabilities at the LESC. I look forward to continuing to work
    with you to ensure that the LESC is as helpful as possible to law
    enforcement officers throughout our Nation.
        At the same time, I want to ensure that adequate funding is
    available for the LESC to perform its various functions. The
    President's proposal did not include a specific budget for the LESC,
    leaving me only to assume that the base budget from this year will be
    continued in the upcoming fiscal year. Considering the increased
    demands on the LESC and their expanded capabilities, how will you
    ensure that the LESC has the resources it needs to perform its vital
    role of supporting Federal, State and local law enforcement?
        Answer. All of the new or increased activity levels at the LESC
    that are contributing significantly to national security and public
    safety have been accomplished within existing resources. ICE has
    clearly recognized the value of the LESC as demonstrated by the steps
    taken to increase productivity and is determined to expand the role of
    the LESC not only within the broader law enforcement community, but
    also within DHS and ICE.
        In order to ensure the LESC is properly positioned to address its
    expanding workloads and roles within the law enforcement community, ICE
    conducted a detailed analysis of current and projected operational
    requirements and the resources that would be necessary to assure their
    continuation and expansion. That analysis, which included examination
    of staffing, facility and other resource needs, resulted in a
    comprehensive, strategic document. Some of the recommendations have
    already been implemented or are in the planning or implementation
    process.
        Question. Mr. Aguirre, the President's budget proposes a 40 percent
    cut in the amount of directly appropriated funds for the Bureau of
    Citizenship and Immigration Services (CIS), from the nearly $235
    million appropriated for the current year to $140 million for fiscal
    year 2005. At the same time, the President has proposed a guest worker
    program that would significant increase the CIS workload.
        Why is the President proposing a 40 percent cut in an agency whose
    workload he wants to increase dramatically?
        Answer. The President's fiscal year 2005 Budget is not proposing a
    cut in the USCIS budget. In fact, the President's budget includes a
    $300 million increase over last years levels, including an additional
    $60 million in discretionary funding towards backlog reduction efforts
    aimed at achieving a 6-month processing time for all immigration
    benefit applications by fiscal year 2006.
        The President's fiscal year 2005 budget reflects the recent changes
    by USCIS to adjust its fee schedule. This fee adjustment includes
    amounts for administrative support services ($155 million) previously
    funded through appropriated funds (tax dollars). Thus, this proposal
    has no impact on the USCIS budget except for the fact that the funding
    source for these services will be by way of fees versus tax dollars.
    With the exception of the $140 million in appropriated backlog
    reduction funds, USCIS will be a wholly fee-funded agency in fiscal
    year 2005.
        Beginning in fiscal year 2002, USCIS has been receiving a total of
    $100 million in funds for backlog reduction to achieve the 6-month
    processing time. The $100 million is made up of $80 million in
    appropriated funds and $20 million in premium processing fees. The
    President is proposing a 60 percent increase for backlog reduction
    efforts in fiscal year 2005, bringing the total backlog reduction funds
    from $100 million to $160 million ($140 million in appropriated funds
    and $20 million from the premium processing fees).
        Question. Speaking of the guest worker program, I wrote to the
    President in January and asked him to submit a legislative proposal to
    Congress that would implement his plan. As you know, we have a short
    legislative year ahead of us, but I have still not received a response.
    Are the media reports suggesting the President has shelved his guest
    worker program accurate? If not, why has he not submitted proposed
    legislation? Will he do so?
        Answer. On January 7, 2004, the President announced principles in
    creating a new temporary worker program that would match willing
    foreign workers with willing U.S. employers when no Americans can be
    found to fill the jobs. We look forward to working with Congress to
    develop legislation that incorporates the best ideas for the American
    worker and our foreign visitors. Through the principles outlined by the
    President, the best course to the end goal of opportunity, security,
    safety, compassion, jobs and growth can be achieved.
        Question. President Bush has promised to reduce the average wait
    time for applicants for immigration benefits to 6 months by 2006. In
    light of that goal, and the increased burden the President would place
    on the CIS through the guest worker program, why did the President's
    not seek increased funds for backlog reduction?
        Answer. As stated above, the President is proposing a 60 percent
    increase for backlog reduction efforts in fiscal year 2005, bringing
    the total backlog reduction funds from $100 million to $160 million
    ($140 million in appropriated funds and $20 million from the premium
    processing fees).
        Question. Mr. Aguirre, I have joined with many other Senators in
    writing to Secretary Ridge and opposing the potential outsourcing of
    1100 Immigration Information Officers (IIOs). My colleagues and I
    believe that these IIOs perform important work--including background
    checks on applicants for immigration benefits--that we should not be
    delegating to the private sector, especially at a time of continuing
    threats of terrorism. (A) As the supervisor of these IIOs, do you
    believe they are performing their jobs well? (B) Do you believe they
    should be replaced by private contractors?
        Answer. Many IIOs individually do an excellent job. But we have a
    very significant customer challenge that we have yet to meet. INS was
    known for long lines, and lengthy waits at its local offices, and was
    not considered particularly responsive to written correspondence.
    Clearly we need to make some changes. USCIS has already started the
    process with expansions of our toll-free call center services, case
    status on-line, InfoPass appointments, and initiatives to reduce lines
    and improve customer service. Introducing an element of competition
    through the A-76 process should further stimulate innovation and
    improvements, with the current workforce being one of the competitors
    in this process.
        Question. Mr. Garcia, I have supported and helped to obtain funding
    for Legal Orientation Proceedings for immigration detainees, with the
    view that the immigration system works better for all parties when
    detained aliens are informed as to whether they have a legitimate legal
    case to stay in the United States. Congress appropriated $1 million for
    orientation proceedings in fiscal year 2003, but DHS has still not
    transferred that money to the Executive Office for Immigration Review
    so the proceedings can take place. Can you tell me when that money will
    be transferred, and why it has taken so long?
        Answer. The Department of Homeland Security (DHS) appreciates the
    attention and funding Congress has appropriated annually to fund the
    Legal Orientation Program for Immigration Detainees. As you know, the
    former Immigration and Naturalization Service (INS) was abolished on
    February 28, 2003, shortly after the fiscal year 2003 Appropriations
    was signed into law on February 20, 2003. One of its successor
    agencies, the U.S. Immigration and Customs Enforcement (ICE), began to
    manage the funding appropriated for the Legal Orientation Program. Late
    in fiscal year 2002, the former INS transferred $1 million to the
    Executive Office for Immigration Review (EOIR) for the Legal
    Orientation Program. However, this transfer was not made in fiscal year
    2003. Also, throughout fiscal year 2003, EOIR had fiscal year 2002
    funding available to use for their Legal Orientation Program. In fiscal
    year 2004, ICE has transferred $1 million to EOIR for the Legal
    Orientation Program, under a reimbursable agreement that was signed on
    February 2, 2004.

                             CONCLUSION OF HEARINGS

        Senator Cochran. This concludes our scheduled hearings on
    the President's fiscal year 2005 budget request for the
    Department of Homeland Security. I appreciate the cooperation
    and assistance of all members of the subcommittee, especially
    the distinguished Senator of West Virginia, my friend, Senator
    Byrd, as well as the dedicated hard work of the staff of this
    subcommittee.
        The hearing is recessed.
        [Whereupon, at 12:15 p.m., Tuesday, March 30, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]

      DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS FOR FISCAL YEAR 2005

                                  ----------

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.

                           NONDEPARTMENTAL WITNESSES

        [The following testimonies were received by the
    Subcommittee on Homeland Security for inclusion in the record.
    The submitted materials relate to the fiscal year 2005 budget
    request for programs within the subcommittee's jurisdiction.]

         Prepared Statement of the Association of American Universities

        Mr. Chairman, Members of the Subcommittee: I am pleased to have
    this opportunity to present the views of the Association of American
    Universities (AAU) concerning the fiscal year 2005 budget proposal for
    the Department of Homeland Security Science and Technology (S&T)
    Directorate. AAU is an organization of 62 leading public and private
    research universities.
        Let me begin by thanking Chairman Cochran, Ranking Member Byrd, and
    members of the subcommittee for their efforts last year in helping the
    new Department of Homeland Security (DHS) get up and running. I would
    especially like to thank them for their recognition of the role that
    universities can play in helping the Department fulfill its mission and
    for your strong support of the university programs within the DHS S&T
    Directorate. You all have done the nation a great service, and your
    work to ensure the security of our homeland is very much appreciated.
    AAU Urges Strong Support of Homeland Security S&T
        AAU supports the $1.039 billion proposed in the President's fiscal
    year 2005 budget request for the DHS S&T Directorate. The primary
    interest of the university community continues to be with DHS
    University Programs, which support the DHS scholarship, fellowship, and
    university center programs. AAU requests $70 million for DHS university
    programs in fiscal year 2005, the same level approved by Congress in
    fiscal year 2004. This is $40 million more than the President's fiscal
    year 2005 request.
        AAU recommends that this additional $40 million be used to support
    new DHS university-based centers and other innovative university-based
    research programs. This is consistent with AAU's view that DHS S&T
    programs should focus not only on the development of technologies with
    near-term applications but also on helping generate the fundamental
    knowledge, cutting-edge science, and human infrastructure needed to
    meet the nation's future homeland security needs. AAU also supports
    funding for S&T staffing and administration at a level that allows the
    directorate to ensure that S&T funds are awarded to projects fairly and
    competitively, based on scientific and technical merit.
    The Role of Universities in Homeland Security
        There are several reasons why AAU believes that continued strong
    support for university research and training is needed and can greatly
    assist the Department of Homeland Security. Let me briefly highlight
    three of them:
        Long-Term University-Based Research is Critical to Homeland
    Defense.--Science and engineering research conducted on university
    campuses is the foundation for many of the technologies now being
    deployed to prevent, detect, and treat victims of chemical, biological,
    radiological, nuclear and conventional terrorist attacks. As with
    university-based basic and applied defense research programs,
    fundamental knowledge and research generated at universities will serve
    as the ``seed corn'' from which future homeland security technologies
    will grow.
        Universities Are an Important Resource in the Domestic War on
    Terror.--University medical facilities and personnel were critical in
    providing medical care and emergency response services after the
    September 11, 2001, attacks in New York City and Washington D.C. When
    the anthrax attacks occurred on Capitol Hill, university researchers
    were called on to help Americans better understand the threat posed by
    biological agents and to provide critical information that enabled
    federal agencies and Congress to respond effectively.
        University researchers are actively exploring new methods to
    safeguard the nation, including detection of, and response to, domestic
    biological, chemical, nuclear, and radiological attacks; risk
    assessment; cybersecurity; protection of critical infrastructure; and
    developing a better understanding of the behaviors and motivations of
    those who engage in terrorist activities.
        Universities Are Leading Homeland Security Training and
    Coordination.--Universities continue to work with government officials
    at all levels, industry and non-profit leaders, and first-responders to
    develop coherent, effective homeland security strategies. Colleges and
    universities are also developing new programs to train first responders
    and educate students to address current and future homeland security
    challenges.
    Conclusion
        Let me conclude by saying that in addition to being able to assist
    the Department of Homeland Security in fulfilling its science and
    technology and training objectives, AAU and its member universities are
    working to ensure safety and security on university campuses. This
    includes compliance with the new biological and select agent
    regulations and efforts to help ensure that new systems to track
    foreign students--as required by law--are in place. AAU urges that in
    addition to providing funding for homeland security S&T, Congress and
    the Administration provide adequate funding to support university
    efforts to respond to these new requirements for campus-based homeland
    security. With your support, and working together, the nation's
    research universities will be able to continue to help fight terrorism
    and ensure domestic security.
        Again, I appreciate your ongoing work in support of homeland
    security. Thank you for the opportunity to submit testimony. Please let
    me know should you have any questions.
                                     ______

      Prepared Statement of the American Public Transportation Association

        Mr. Chairman, thank you for this opportunity to submit written
    testimony on the security and safety of public transportation systems.
    We appreciate your interest in transportation security, and we look
    forward to working with you as you develop the fiscal year 2005
    appropriations bill for the Department of Homeland Security.

                                   ABOUT APTA

        The American Public Transportation Association (APTA) is a
    nonprofit international association of over 1,500 public and private
    member organizations including transit systems and commuter rail
    operators; planning, design, construction, and finance firms; product
    and service providers; academic institutions; transit associations and
    State departments of transportation. APTA members serve the public
    interest by providing safe, efficient, and economical transit services
    and products. Over ninety percent of persons using public
    transportation in the United States and Canada are served by APTA
    member systems.

                                    OVERVIEW

        Mr. Chairman, public transportation is one of our Nation's critical
    infrastructures. We cannot over emphasize the importance of our
    industry to the economic vitality of this country. Over 9.5 billion
    transit trips are taken annually on all modes of transit service.
    People use public transportation vehicles over 32 million times each
    weekday. This is more than 16 times the number of daily travelers
    aboard the Nation's airlines, and 450 times the number of travelers on
    Amtrak.
        The American people rightfully expect that they can travel to work,
    school, and any destination on public transit without fearing for their
    safety and security. Our industry is fully engaged in meeting this
    responsibility. However, the American people, and we also require the
    full support of the Federal Government to effectively address this
    challenge.
        America's public transportation services are by design and
    necessity an open environment. Safety and security are thus the top
    priority of the public transportation industry. Transit systems took
    many steps to improve security prior to the horrific terrorist attacks
    of September 11, 2001, and have significantly increased efforts since
    then by spending approximately $1.7 billion on security and emergency
    preparedness programs and technology. These expenditures have been made
    from local transit agency's own budgets with minimal Federal funding.
    Recent terrorist attacks in Madrid only highlight the need to
    strengthen security on public transit systems and to do so without
    delay.
        In a recent APTA survey transit systems identified both capital and
    operating actions that would enhance transit security; transit agencies
    around the country have identified in excess of $6 billion in transit
    security needs. State and local governments and transit agencies are
    doing what they can to improve security, but it is important that the
    Federal Government be a full partner in the effort to ensure the
    security of the Nation's tens of millions of transit users.
        We urge the Congress to act decisively on this issue. In light of
    the documented needs, we respectfully request Congress to provide $2
    billion in the fiscal year 2005 Homeland Security Appropriations bill
    for transit security. Of that amount, we suggest that $1.2 billion be
    provided for capital needs such as improved inter-operable radio
    communications, strengthening access control to facilities, and
    establishing emergency operations control centers, and that $800
    million be provided for security related operating costs, including
    threat assessments, planning, public awareness, training, and drills.
        We further request that the existing process for distributing
    Office of Domestic Preparedness (ODP) Federal grant funding be modified
    so that funds are distributed directly to transit agencies as was done
    in fiscal year 2003, rather than through State Administrating Agencies
    (SAA) as was done in fiscal year 2004.

                         PUBLIC TRANSPORTATION SECURITY

        Mr. Chairman, transit employees are on the front line in our
    Nation's effort against terrorism. They are the first responder
    evacuation teams who will assist in getting the public out of critical
    incident areas and our cities in the event of a terrorist attack. This
    was evident on September 11, 2001, when public transportation systems
    in New York City, New Jersey and Washington D.C. helped safely evacuate
    citizens from center cities. Indeed, this same story was true around
    the country as transit systems quickly and efficiently evacuated people
    from closed airports and downtown areas. We remember that the
    interstate highway program was begun by President Eisenhower as a
    national defense interstate highway program. It is clear now that
    public transportation too has a significant national defense component
    and is a fundamental element in responding to terrorist attacks and
    other community disasters and emergencies.
        In that connection, APTA has played a critical role in
    transportation security and works closely with a number of Federal
    agencies in this regard, notably the Federal Transit Administration
    (FTA) and the Federal Railroad Administration of the U.S. Department of
    Transportation, and the Transportation Security Administration (TSA),
    the Office of Domestic Preparedness (ODP), and the Directorate of
    Information Analysis & Infrastructure Protection of the U.S. Department
    of Homeland Security. At the program level, APTA works closely with
    these agencies to administer an industry audit program that oversees a
    system safety and security management plan for transit systems around
    the country. Our safety audit program for commuter rail, bus, and rail
    transit operations has been in place for many years and includes
    elements specific to security planning and emergency preparedness.
    Separately, in connection with Presidential Decision Directive Number
    63, we are pleased to have been designated a Public Transportation
    Sector Coordinator by the Department of Transportation, and as my
    testimony notes below, we have established a Transit Information
    Sharing Analysis Center (ISAC) that provides a secure two-way reporting
    and analysis structure for the transmission of critical alerts and
    advisories to transit agencies around the country. This ISAC is also a
    mechanism for transit agencies to provide information to the DHS.
        Since the events of 9/11, State and local public transit agencies,
    like all State and local entities, have spent significant sums on
    police overtime, enhanced planning and training exercises, and capital
    improvements related to security. As mentioned in the overview, a 2004
    APTA survey of transit agencies around the country has identified in
    excess of $6 billion in added transit security needs. These include
    both one-time capital investments and recurring operating expenses
    related to security. It is important to note that these costs are above
    and beyond the capital infrastructure needs we have identified under
    the TEA 21 reauthorization effort.

                                   BACKGROUND

        Mr. Chairman, prior to and following September 11, 2001, the date
    of the most devastating terrorist attack in U.S. history, American
    public transportation agencies have taken significant measures to
    emphasize their security and emergency preparedness to adjust to
    society's new State of concern. Although agencies had a wide range of
    security initiatives in place at the time of the World Trade Center and
    Pentagon attacks and already had developed emergency response plans,
    the September 11 incidents caused the agencies to focus, strengthen,
    and prioritize additional security efforts.
        Transit agencies have had an excellent safety record and have
    worked for years to enhance their system security and employee security
    training, partly responding to government standards, APTA guidelines,
    and by learning through the attacks on transit agencies abroad. For
    example, the 1995 sarin gas attack in the Tokyo subway system caused
    U.S. transit properties managing tunnels and underground transit
    stations to go on high alert. The San Francisco Bay Area Rapid Transit
    District, for instance, responded to the possible threat of chemical
    weapons attacks by sending a police team to Fort McClellan, Alabama, to
    learn response tactics from U.S. Army chemical weapons experts.
        In the months following the September 11 terrorist attacks, transit
    agencies of all sizes worked to identify where they might be vulnerable
    to attacks and increased their security spending for both operations
    and capital costs. The agencies subsequently upgraded and strengthened
    their emergency response and security plans and procedures, taking
    steps to protect transit infrastructure and patrons and increase
    transit security presence while giving riders a sense of security.
        Some initiatives around the country include:
      --Increased surveillance via closed circuit TV
      --Increased training for employees
      --Hired more police, K-9 units added
      --Chemical detection systems being tested
      --Infrastructure design to eliminate hiding places
      --Drills are routinely held with first responders
      --Encouraging riders to be vigilant for suspicious activities or
            items.
        After September 11, many transit organizations worked to prevent
    unauthorized entry into transit facilities. The need for employees and
    passengers to stay alert and report suspicious occurrences became a key
    goal of many agencies. These efforts are paying off. But while many
    transit agencies are more secure than prior to September 11, more needs
    to be done.
        Since the attacks, APTA and the Federal Transit Administration have
    emphasized the need for effective transit security and emergency
    preparedness. FTA has sent security resources toolkits to transit
    agencies; completed security-vulnerability assessments of the Nation's
    largest transit systems; and provided technical support and grants of
    up to $50,000 to fund agency emergency drills.
        FTA continues to provide emergency preparedness and security forums
    nationwide. In emphasizing the importance of enhancing transit
    security, FTA Administrator Jennifer L. Dorn noted that thousands of
    lives were spared on September 11 in New York City and Washington
    ``because of the quick action of first responders and transit
    workers.''
        APTA has launched additional efforts to further transit industry
    security and preparedness, collaborating with FTA in developing
    emergency preparedness forums, and sponsoring and organizing security-
    related conferences and workshops. Moreover, APTA developed a list of
    critical safety and security needs faced by the transit industry, which
    it has provided to the Department of Transportation and the U.S.
    Congress.
        public transportation information sharing analysis center (isac)
        Presidential Decision Directive Number 63 authorizes and encourages
    national critical infrastructures to develop and maintain ISACs as a
    means of strengthening security and protection against cyber and
    operations attacks. APTA is pleased to have been designated a Public
    Transportation Sector Coordinator by the U.S. Department of
    Transportation, and in that capacity has received a $1.2 million grant
    from the Federal Transit Administration to establish a transit ISAC.
    APTA recently formalized an agreement with a private company to
    implement the ISAC and make it available to public transit systems
    around the country.
        This ISAC for public transit provides a secure two-way reporting
    and analysis structure for the transmission of critical alerts and
    advisories as well as the collection, analysis and dissemination of
    security information from transit agencies. The public transit ISAC
    also provides a critical linkage between the transit industry, the U.S.
    Department of Transportation, the Transportation Security
    Administration, and the Office of Homeland Security. A request for
    funding to continue this ISAC has been submitted to the Department of
    Homeland Security's Directorate of Information Analysis &
    Infrastructure Protection.

                       ONGOING TRANSIT SECURITY PROGRAMS

        Mr. Chairman, while transit agencies have moved to a heightened
    level of security alertness, the leadership of APTA has been actively
    working with its strategic partners to develop a practical plan to
    address our industry's security and emergency preparedness needs.
    Shortly after the September 11 events, the APTA Executive Committee
    established a Security Task Force under the leadership of Washington
    Metro's CEO, Richard A. White. The APTA Security Task Force has
    established a security strategic plan that prioritizes direction for
    our initiatives. Among those initiatives, the Task Force serves as the
    steering group for determining security projects that are being
    implemented through over $2 million in Transit Cooperative Research
    funding through the Transportation Research Board.
        Through this funding, APTA held four transit security workshop
    forums for the larger transit systems with potentially greater risk
    exposure. These workshops provided confidential settings to enable
    sharing of security practices and applying methodologies to various
    scenarios. The outcomes from these workshops were made available in a
    controlled and confidential format to other transit agencies unable to
    attend the workshops. The workshops were held in New York, San
    Francisco, Atlanta, and Chicago.
        In partnerships with the Transportation Research Board, the APTA
    Security Task Force has also established two TCRP Panels that
    identified and initiated specific projects developed to address
    Preparedness/Detection/Response to Incidents and Prevention and
    Mitigation. The Security Task Force emphasized the importance for the
    research projects to be operationally practical.
        In addition to the TCRP funded efforts, a generic Checklist For
    Transit Agency Review Of Emergency Response Planning And System Review
    has been developed by APTA as a resource tool and is available on the
    APTA website. Also through the direction of the Security Task Force,
    APTA has reached out to other organizations and international
    transportation associations to formally engage in sharing information
    on our respective security programs and directions and to continually
    work towards raising the bar of safety and security effectiveness.
        Within this concept of partnership and outreach, APTA also
    continues in its ongoing collaboration with the Federal Transit
    Administration to help in guiding and developing FTA programs. Among
    these are regional Emergency Preparedness and Security Planning
    Workshops that are currently being delivered through the Volpe Center
    and have been provided in numerous regions throughout the United
    States. The primary focus of such workshops has been to assist
    particularly smaller transit systems in building effective emergency
    response plans with first responders and their regional offices of
    emergency management. Also within this partnership, APTA has assisted
    the FTA and the National Transit Institute in the design of a new
    program ``Security Awareness Training for Frontline Employees and
    Supervisors.'' This program is now being provided by NTI to transit
    agencies throughout the Nation.
        Collaborative efforts between APTA, FTA, Volpe Center, and the
    National Transit Institute are also underway to establish a joint
    website that will specifically gather and disseminate effective transit
    practices with initial emphasis on safety and security.
        As you may be aware, APTA has a long-established Safety Audit
    Program for Commuter Rail, Bus, and Rail Transit Operations. Within the
    scope of these programs are specific elements pertaining to Emergency
    Response Planning and Training as well as Security Planning. In keeping
    with our industry's increased emphasis on these areas, the APTA Safety
    Audit Programs have similarly been modified to place added attention to
    these critical elements.
        APTA's Committee on Public Safety continues to provide a most
    critical forum for transit security professionals to meet and share
    information, experiences and programs and to also provide valuable
    input to programs being developed by the FTA.

                           SECURITY INVESTMENT NEEDS

        Mr. Chairman, after the awful events of 9/11, the transit industry
    invested some $1.7 billion in enhanced security measures building on
    the industry's considerable efforts already in place. At the same time,
    our industry undertook a comprehensive review to determine how we could
    build upon our existing industry security practices. This included a
    range of activities, some of which I discussed earlier in my testimony,
    including research, best practices, education, information sharing in
    the industry, surveys and the like. As a result of those efforts we are
    now at a phase where we know what we can most effectively do in terms
    of creating a more secure environment for our riders and have
    accordingly identified critical security investment needs.
        Our latest survey of public transportation security identified
    needs of at least $5.2 billion in additional capital funding to
    maintain, modernize, and expand transit system security functions to
    meet increased security demands. Over $800 million annually for
    increased operating costs for security personnel, training, technical
    support, and research and development have been identified, bringing
    total additional transit security funding needs to more than $6
    billion.
        Responding transit agencies were asked to prioritize the uses for
    which they required additional Federal investment for security needs.
    Priority examples of operational needs include:
      --Funding current and additional transit agency and local law
            enforcement personnel
      --Funding for over-time costs and extra security personnel during
            heightened alert levels
      --Training for security personnel
      --Joint transit/law enforcement training
      --Security planning activities
      --Security training for other transit personnel
        Priority examples of security capital investment needs include:
      --Radio communications systems, including operational control center
            redundancy
      --Security cameras on-board transit vehicles and in transit stations
      --Controlling access to transit facilities and secure areas
      --Automated vehicle locator systems
      --Security fencing around facilities
        Transit agencies with large rail operations also reported a
    priority need for Federal capital funding for intrusion detection
    devices.
        To date the DHS has allocated some $115 million for public
    transportation security through its Office of Domestic Preparedness.
    While we appreciate this support from the Department, we must build on
    those initial investments and begin to address the $6 billion in
    critical needs the transit industry has identified. We believe that a
    funding level of $2 billion in the fiscal year 2005 Homeland Security
    Appropriations bill would effectively begin the process of funding
    those needs. Of that amount, we suggest that $1.2 billion be provided
    for transit capital needs, and that $800 million be provided for
    transit agencies for operating costs.
        The Administration's fiscal year 2005 budget, however, does not
    specifically call for investment in public transportation security. We
    think it should. Currently ODP grants for transit systems are made
    available through the States, which means that our transit systems do
    not have a direct relationship with DHS, and which also means that the
    process of getting the funds to the local transit systems can be
    lengthy. Mr. Chairman, our Nation's transit systems have a direct and
    cooperative working relationship with DOT's Federal Transit
    Administration which allocates Federal capital investment directly to
    them, and we believe this is an excellent model that we would like to
    see developed with the DHS. We stand ready to help in any way we can in
    that regard.

                                   CONCLUSION

        Mr. Chairman, in light of our Nation's heightened security concerns
    post 9/11, and the bombings in Madrid, tens of millions of Americans
    relying on public transportation expect the services they use to be
    made more secure. Increased Federal investment in public transportation
    security by the Congress and DHS is critical. The public transportation
    industry has made great strides in transit security improvements since
    9/11 but much more needs to be done. We look forward to building on our
    cooperative working relationship with Congress and the Department of
    Homeland Security to begin to address these needs. We again thank you
    and the Committee for allowing us to submit testimony on these critical
    issues and look forward to working with you on safety and security
    issues.
                                     ______

      Prepared Statement of the Association of State Dam Safety Officials

        Dear Chairman Cochran and Members of the Subcommittee: The
    Association of State Dam Safety Officials (ASDSO) is pleased to offer
    testimony on the President's proposed fiscal year 2005 budget for the
    Department of Homeland Security.
        The Association of State Dam Safety Officials respectfully requests
    that the Subcommittee increase the Administration's proposed budget of
    $5.9 million to $8.6 million to fully fund the National Dam Safety
    Program at its authorized level for fiscal year 2005. The Association
    further requests that these funds be earmarked for the sole purpose of
    carrying out mandates authorized in the National Dam Safety and
    Security Act of 2002.
        The Association of State Dam Safety Officials is a national
    organization of more than 2,200 state, Federal and local dam safety
    professionals and private sector individuals dedicated to improving dam
    safety through research, education and technology transfer. ASDSO
    represents the 50 state dam safety programs, as the state dam safety
    officials are the governing body of the Association. Our goal is simply
    to save lives, prevent property damage and to maintain the many
    benefits of dams by preventing dam failures.
        During the 1970s this country suffered devastating dam failures
    that caused tragic loss of life and enormous property damage; and
    focused national attention on the catastrophic consequences of dam
    failures. Those historic failures and recent dam failures serve as a
    constant reminder that dams must always be properly constructed,
    properly designed and properly operated and maintained to provide vital
    benefits and prevent failures.
        Today our focus in not only on the safety of dams related to
    maintenance issues but on security as the Nation faces a significant
    challenge to protect our infrastructure from terrorist attacks.
    Protection of U.S. dams is a major concern and focus of national
    strategic planning efforts within the Department of Homeland Security.
    National Dam Safety Program
        The National Dam Safety Program Act of 1996 (Public Law 104-303)
    created the first national program that focused on improving the safety
    of the Nation's dams. Congress reauthorized the program through the Dam
    Safety and Security Act of 2002 (Public Law 107-310) and made modest
    increases in the authorized funds. This small, yet critical program
    provides much needed assistance to the state dam safety programs in the
    form of grant assistance, training and research; and through
    facilitating the exchange of technical information between Federal dam
    safety partners and the states. The program provides $6 million in
    grant assistance to states based on the relative number of dams in each
    state. The grants may be utilized to best suit the individual state's
    needs. In addition, the National Dam Safety Program provides $500,000
    each year to be used for training of state dam safety engineers and
    $1.5 million annually for research. These research funds are used to
    identify more effective methods of evaluating the safety of dams and
    more efficient techniques to repair dams. And now, these research funds
    can be used to develop better methods to assess and improve the
    security of dams.
        There are over 79,000 dams in the United States, but the
    responsibility of assuring their safety falls on the shoulders of the
    states, as they regulate 95 percent of the country's dams. Because of
    limited staff and limited funding, most states are overwhelmed by that
    challenge. Table 1 attached to this testimony provides state-by-state
    data on the number of dams, the number of staff, the state budget and
    the number of dams that are considered ``unsafe.'' Unsafe means that
    they have identified deficiencies that make the dam more susceptible to
    failure, which may be triggered by a large storm event, an earthquake
    or simply through inadequate maintenance. Currently states have
    identified over 3,300 dams as being deficient, or unsafe. In Kentucky
    the state lists 88 unsafe dams including 36 that are classified as high
    hazard potential. In Pennsylvania there are 531 unsafe dams and 98 of
    these are classified as high hazard potential.
        There are over 10,000 dams classified as high hazard potential
    meaning that the consequences of the dam's failure will likely include
    loss of human life and significant downstream property damage. Every
    member of this Subcommittee has high hazard dams in their home state.
    There are 217 high hazard potential dams in Kentucky, 861 high hazard
    potential dams in Texas and 1,027 high hazard potential dams in North
    Carolina. According to the National Inventory of Dams more than 53
    percent of the high hazard potential dams have not been inspected in
    the last ten years. High hazard potential dams should be inspected
    every year.
        The task for state dam safety programs is staggering; in Iowa where
    there are over 3,300 dams there are only 1.25 full time employees
    assigned to the dam safety program. Texas has over 8,000 dams with only
    5 engineers in their dam safety program; and Minnesota, which has
    almost 1,000 dams, only has a staff of 2.1 full time employees
        The American Society of Civil Engineers' 2003 Progress Report for
    America's Infrastructure listed a downward trend line indicating that
    the condition of the Nation's dams continues to decline. The dams
    across the United States are aging as 85 percent of the dams will be 50
    years or older by the year 2020.
        Downstream development within the dam failure flood zone places
    more people at risk. When homes are built in the dam failure flood zone
    below a low hazard dam, (low hazard: failure is not expected to cause
    loss of life or significant property damage) the dam no longer meets
    dam safety criteria as the potential consequences of a failure now
    include loss of life.
    Federal Leadership Role
        There is a clear need for continued Federal leadership to provide
    assistance in support of dam safety. This country suffered several
    large and tragic dam failures in the 1970s that focused attention on
    dams and prompted Congress to pass national dam safety legislation. In
    1972, the Buffalo Creek Dam in West Virginia failed and killed 125
    individuals; in 1976 the Teton Dam failure in Idaho caused $1 billion
    in damages and 14 deaths; the Kelly Barnes Dam in Toccao Falls, Georgia
    failed in 1977 killing 39 Bible college students; also in 1977 40
    people died from the failure of the Laurel Run Dam in Pennsylvania; and
    in 1996 the 38 foot tall Meadow Pond Dam in Alton, New Hampshire failed
    killing one woman and causing $8 million in damage.
        However, the recent failure of the Silver Lake Dam in Michigan in
    May 2003 again demonstrated the enormous potential damages that dam
    failures can produce. This dam failure caused more than $100 million in
    damages including $10 million in damages to utilities, $4 million to
    the environment, $3 million to roads and bridges and flooded 20 homes
    and businesses. In addition, the Silver Lake Dam failure flooded a
    major power plant, which in turn caused the closure of two iron mines,
    putting 1,100 miners temporarily out of work.
        Just last month on March 12, 2004, the Big Bay Lake Dam in
    Mississippi failed destroying 48 homes, damaging 53 homes, 2 churches,
    three businesses and a fire station and washing out a bridge. This dam,
    which cost $2.5 million to construct, has caused many millions in
    damages, will require downstream homeowners and businesses to rebuild,
    caused significant loss of property values around the lake and has
    resulted in $100 million lawsuit filed against the dam owner on behalf
    of the homeowners.
        Dam failures do not respect state boundaries, as a dam failure in
    one state may cause loss of life and property damage in an adjacent
    state. The Federal Government funds the recovery costs from the
    President's disaster relief fund and through the Flood Insurance
    Program, but the cost of one small dam failure can easily exceed the
    annual costs of the National Dam Safety Program. Full funding of the
    National Dam Safety Program is an investment in public safety that will
    be repaid many times over in fewer dam failures, reduced Federal
    expenditures for dam failure recovery and, most importantly, fewer
    lives lost.

    Benefits of the National Dam Safety Program
        The National Dam Safety Program has been very successful in
    assisting the state programs. The training program is created is one
    aspect of this success ($500,000). This training provides access to
    technical courses and workshops that states engineers could not
    otherwise attend. Examples include Dambreak Analysis, Concrete
    Rehabilitation of Dams, Slope Stability of Dams, Earthquake Analysis,
    Emergency Action Planning and many others including recent training in
    Dam Site Security. Training courses are also offered through FEMA's
    training facility at their Emergency Management Institute in Maryland
    where state dam safety inspectors receive training at no cost to the
    states.
        The Research Program is an important program to all within the dam
    safety community. Its funds have been used to identify future research
    needs such as inspections using ground penetrating radar or risk
    analysis. In addition, these funds have been used to create a national
    library and database of dam failures and dam statistics at the National
    Performance of Dams Program at Stanford University as well as a
    national clearinghouse and library of dam safety bibliographic data at
    ASDSO.
        Research funds are currently being used to provide security
    training, security assessment tools and best management practices for
    states to utilize in addressing potential terrorists actions against
    the 75,000 non-Federal dams. The small increase ($500,000) in the
    funding levels authorized by the 2002 act was intended to address dam
    site security. Dam site security is now an urgent area of concern for
    state dam safety officials both in training needs and in research to
    better understand and respond to potential threats to dams.
        The most valuable benefit to the state programs comes from the
    State Grant Assistance Program. The grants are based on the number of
    dams in each of the participating states and are used as an incentive
    to encourage states to improve their program by meeting basic criteria
    such as:
      --State statutory authority to conduct inspections of dams;
      --State authority to require repairs to unsafe dams; or
      --State policies that address dam site security at non-Federal dams.
        Use of these grants is left up to the state's discretion as each
    state has its own unique challenges. States have utilized grant funds
    to perform dam failure and dam stability analyses, to hire additional
    staff to conduct inspections and to conduct owner education workshops.
    In addition, grant funds have enabled states to provide additional
    staff training, and to purchase equipment such as computers, field
    survey equipment and software, and remote operated cameras for internal
    inspections.
        As we begin to realize the benefits of the grant assistance
    program, dam safety inspections have increased and so has the number of
    Emergency Action Plans, used to notify and evacuate downstream
    populations in the event of a failure, it is disappointing to see that
    appropriations over the past 2 years are well below the authorized
    levels. They have remained at the previous level of $5.9 million.
    Despite the increase in funding approved by Congress in the Dam Safety
    and Security Act of 2002 to $8.6 million, the states have not realized
    any increase in assistance. Moreover, budget reductions at have further
    reduced the state grant assistance funds by almost 22 percent.
        Table 2, attached to this testimony, provides information on the
    amount of state grant assistance received for each state, the potential
    grant funding if fully funded at authorized levels and the grant amount
    each state will lose as a result of the reduced funding. The lost
    grants come at a difficult time when development below dams creates
    more high hazard potential dams, dams continue to age and, now,
    security issues must be addressed by the states.

    Dam Security of Non-Federal Dams
        The horrific events of September 11, 2001 have focused
    unprecedented attention on the security of our Nation's critical
    infrastructure, including dams. Dams, in fact, have been identified by
    intelligence and law enforcement agencies in specific threat alerts.
    Federal agencies that own dams, such as the U.S. Army Corps of
    Engineers and the Bureau of Reclamation, have been conducting
    vulnerability assessments and security improvements on these Federally
    owned dams. However, little has been provided by the Federal Government
    in leadership or assistance to the states who have similar and equally
    urgent dam security demands.
        Security experts advise that it is very difficult to make a site
    completely safe from intentional acts of terror. They offer that their
    goal is to enhance security and effectively deter a potential attack at
    a site so that the terrorist will seek another site with less security.
    The improved security at federally owned dams makes non-Federal dams
    more attractive targets. There are clearly thousands of non-Federal
    dams that are potential targets based on type of construction, size,
    purpose (water supply, hydro power, flood control); and on the
    population and infrastructure at risk below the dam. Federal leadership
    is urgently needed to provide technical and financial assistance to
    states for training, for conducting vulnerability assessments and for
    identifying and implementing security improvements on dams determined
    to have an inadequate security program.

    Conclusion
        Dams are a vital part of our aging national infrastructure that
    provide many vital benefits, but that also pose a threat to life and
    property if they fail. The National Dam Safety Program is a valuable
    program that offers assistance to states as an investment in public
    safety. One dam failure alone, as evidenced by the Silver Lake Dam
    failure in 2003, can easily exceed the $8.6 million authorized for this
    program. The National Dam Safety Program, administered by FEMA, is a
    modest and prudent investment protecting public safety.
        Therefore, the Association of State Dam Safety Officials
    respectfully requests that this Subcommittee increase the
    Administration's proposed funding for the National Dam Safety Program
    from $5.9 million to the full authorized level of $8.6 million; and
    further earmark these funds to be used only for the National Dam Safety
    Program in the Department of Homeland Security.
        Thank you Mr. Chairman and Members of the Subcommittee for this
    opportunity offer this testimony. The Association looks forward to
    working with you and the Subcommittee staff on this important issue of
    safe dams.

                                        TABLE 1.--ASSOCIATION OF STATE DAM SAFETY OFFICIALS--STATE-BY-STATE STATISTICS ON DAMS AND STATE SAFETY REGULATION--2004
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Total Dams in    Dams Under State Regulation         State-Determined Deficient Dams \3\       State Dam Safety     State Staff Dedicated to Dam
                                                    National                   \2\              ------------------------------------------------  Budget ( thousand)   ----------------------------------
                                                   (2002 NID)         Total            HH             Total            HH              SH                              Total FTEs      Dams Per FTE
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Alabama \4\................................           2,102               0             171              NA  ..............  ..............              $0                 0                 NA
    Alaska.....................................             104              82              16              NR  ..............  ..............             105.5               1                 82
    Arizona....................................             328             251              85              58              44              14             570.0               8                 31
    Arkansas...................................           1,225             407             102              24              22               1             331.0               4.6               88
    California.................................           1,471           1,225             335              57               2              26           7,800.0              61                 20
    Colorado...................................           1,684           1,879             327             220              35              52           1,400.0              12                157
    Connecticut \4\............................             720           2,000             236              12              NR              NR             472.0               4.3              465
    Delaware \4\...............................              61              98               9              NR  ..............  ..............              NR                NR                 NR
    Florida....................................             724         \4\ 778         \4\ 100             >20              NR              NR              NR                NR                 NR
    Georgia \4\................................           4,470           3,412             399             105              NR              NR             682.0              10                341
    Hawaii \4\.................................             122             129              56               0               0               0             135.0               2                 65
    Idaho \4\..................................             393             439             106              NR  ..............  ..............             350.0               7.5               59
    Illinois...................................           1,456           1,326             173             >22              13               9             345.0               5.5              241
    Indiana....................................           1,069           1,129             238              NR  ..............  ..............             340.0               5                226
    Iowa.......................................           3,249           3,303              74              16               8               7              55.0               1.25           2,642
    Kansas.....................................           5,634           5,890             192              23              13              10             271.0               7.58             777
    Kentucky...................................           1,051           1,002             175              88              36              35           1,600.0              14                 72
    Louisiana..................................             357             465              13              17               1               3              NR                 9                 52
    Maine......................................             641             843          \4\ 26              68               7              35          \4\ 46.0               1.5              562
    Maryland...................................             291             355              63              10               1               5             416.6               5.5               65
    Massachusetts..............................           1,490           2,917             333              40              22              18             500.0               4                729
    Michigan...................................             943           1,039              80              18               3               7              NR                 4.8              216
    Minnesota..................................             986           1,442              40             250               2              20             250.0               2.1              687
    Mississippi................................           3,315           3,594             282              NR  ..............  ..............             137.8               4.5              799
    Missouri...................................           4,854             640             445              15              11               4             192.9               4                160
    Montana....................................           2,885           2,874             101             >11              11              NR             330.0               5.25             547
    Nebraska...................................           2,179           2,173             113             130               7              48             289.0               5.67             383
    Nevada.....................................             469             599             128             >29               5               4              NR                 2.25             266
    New Hampshire..............................             645             838              86             590              63             159             612.0               7                120
    New Jersey.................................             792           1,680             194             567              50             317           1,251.0              18                 93
    New Mexico.................................             375             390             156              61              38              14             450.0               6                 65
    New York \4\...............................            1964           5,021             380             >54              NR              NR             746.0               6.3              797
    North Carolina.............................            2723           4,638           1,027             >61              NR              NR             902.0              17                273
    North Dakota...............................             685           1,758              20              19               5              11             200.0               4.5              391
    Ohio.......................................           1,325           1,727             462              NR  ..............  ..............           1,020.0              11                157
    Oklahoma...................................           4,610           4,485             184               5               3               1             185.0               1.8            2,492
    Oregon \4\.................................             820           3,733             122               0               0               0             255.0               3.1            1,204
    Pennsylvania...............................           1,442           3,044             770             531              98              23           2,039.0              24                127
    Puerto Rico................................              34              36              34               0               0               0             600.0               8                  5
    Rhode Island...............................             185             565              16               0               0               0              99.6               1.2              471
    South Carolina.............................           2,447           2,312             153               3              NR              NR              NR                 4.5              514
    South Dakota...............................           2,377           2,328              47              >3               3              NR              NR                 2.5              931
    Tennessee..................................           1,051             638             148               5               3               1             275.0               7                 91
    Texas......................................           7,025           8,133             861              NR  ..............  ..............             300.0               5              1,627
    Utah.......................................             752             649             192              82              82              NR             460.0               7                 93
    Vermont....................................             354             538              55              NR  ..............  ..............             215.0               2.2              245
    Virginia...................................           1,586             521             112              54              31              13             475.6               7                 74
    Washington.................................             832             933             135              32              13              14             550.0               6.5              144
    West Virginia..............................             543             362             266              38              35               3             454.5               6                 60
    Wisconsin..................................           1,097           3,748             243              NR  ..............  ..............             487.0               6.25             600
    Wyoming....................................           1,335           1,374              76               3               0               1             142.1               5.09             270
                                                ----------------------------------------------------------------------------------------------------------------------------------------------------
          TOTAL................................          79,272          89,742          10,157          >3,341             645             837          28,337.6             359.24         20,576
    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    \1\ Includes dams of any size that are likely to pose a significant threat to human life or property in case of failure, and all other Federal and non-Federal dams > 25 high that impound > 15
      acre feet; and dams > 6 high that impound > 50 acre-feet.
    \2\ Estimated number of all dams under state regulatory control.
    \3\ Dams with identified deficiencies by state definition (varies state to state) derived from state inventory in column 2.
    \4\ 2003 data
    NR-Not Reporting. Some states do not keep data on these categories.

      Prepared Statement of the Association of State Floodplain Managers,
                                      Inc.

        The Association of State Floodplain Managers, Inc. (ASFPM) is
    pleased to share comments on four specific aspects of the fiscal year
    2005 budget proposal for the Department of Homeland Security, Emergency
    Preparedness and Response Directorate (FEMA):
      --Restoration of 15 percent formula for Hazard Mitigation Grant
            Program funding;
      --Protection of NFIP funds from transfer for other purposes;
      --Support for continued funding for modernization of flood maps;
      --Urge increase in NFIP Community Assistance Program funds for state
            technical assistance;
      --Urge appropriation of funds to address the NFIP's repetitive loss
            problem, given imminently pending authorizing legislation; and
      --Continue to retain a separate account for the Flood Mitigation
            Assistance Program.
      --Monitor how the Department of Homeland Security addresses natural
            hazards and mitigation.
        The Association of State Floodplain Managers, Inc. and its 19 state
    chapters represent over 6,500 State, local, and private sector
    officials as well as other professionals who are engaged in all aspects
    of floodplain management and hazard mitigation. All are concerned with
    reducing our Nation's flood-related losses and reducing the costs of
    flooding.

     RESTORATION OF 15 PERCENT FORMULA FOR HAZARD MITIGATION GRANT PROGRAM

        ASFPM urges restoration of the 15 percent formula used to determine
    amounts made available post-disaster for the Hazard Mitigation Grant
    Program (HMGP) authorized by the Stafford Act as Section 404. States
    across the country have evidence that the most effective time to garner
    support for mitigation projects is in the aftermath of disasters. While
    mitigation planning is a vital activity to identify hazards and
    potential risks, only actual damaging events generate significant
    public interest and State and local financial support. The fact is that
    most cities, counties and towns across the country have many immediate
    and pressing financial needs. Regardless of the statistical evidence of
    the likelihood of future disaster occurrence, communities will not
    place mitigation higher than today's demands for education, social
    programs, local first responders, and the like. This is especially true
    in smaller communities where financial resources are always tight.
        On the proverbial ``sunny day,'' flooding is a low priority for the
    millions of homeowners and business owners in the Nation's flood hazard
    areas--regardless of the mounting evidence that future floods will
    occur. Homeowners and business owners view offers for buyouts,
    elevations, and retrofit floodproofing very differently when they are
    shoveling mud, coping with toxic mold, or faced with collapsed
    foundations. Restoring HMGP to the 15 percent formula will provide
    resources to those who have just experienced damage and are most
    receptive to change.
        Pre-disaster funding should be directed to community-based planning
    in order to prepare communities to undertake mitigation projects when
    the disaster strikes. It would also be reasonable to make pre-disaster
    mitigation funds available to support public projects that address at-
    risk State and community buildings and public infrastructure--among the
    more costly categories of public disaster assistance. These projects,
    which do not require direct and voluntary participation of property
    owners, can readily be designed and implemented in the pre-disaster
    context and provide broad public benefits.
      --ASFPM urges the Subcommittee to restore the Hazard Mitigation Grant
            Program formula to 15 percent of certain Federal disaster
            expenditures. The Disaster Mitigation Assistance Act of 2000
            calls for communities to have pre-disaster local mitigation
            plans in order to access HMGP. One result of this requirement
            is that communities will be better prepared to identify
            eligible activities after the next declared disaster, thus
            further shortening the time needed to obligate and expend the
            HMGP funds.
      --ASFPM recommends that the Subcommittee fully investigate the
            implications of the nationwide pre-disaster program funded in
            fiscal year 2003. Initiated in 2002 as a pilot program, the
            pre-disaster mitigation program was not, as originally
            intended, evaluated prior to authorization of PDM in the
            Disaster Mitigation Action of 2000. Particular attention should
            be paid to citizen, community and State receptivity to
            mitigation offers and how the ability to provide the non-
            Federal cost share differs in the pre- and post-disaster
            periods. Another critical aspect to attend to is whether and
            how FEMA balanced different hazards, different geographic
            areas, and communities of different sizes and capabilities.
              protect nfip funds from transfer for other purposes
        The National Flood Insurance Program (NFIP) collects premiums and
    policy service fees from just 4.4 million flood insurance
    policyholders. These funds are authorized for specific purposes
    directly related to administration of the NFIP. Certain Federal
    employees are supported by these funds, as are such activities as the
    Flood Mitigation Assistance grant program, grants to States to provide
    technical assistance to local governments, and flood mapping. Because
    these funds are not general taxpayer funds, it is vital that they are
    used only for the specific purposes for which they are collected.
      --ASFPM urges the Subcommittee to require DHS to disclose funds
            collected from NFIP policyholders that have been transferred
            for other purposes. We further urge the Subcommittee to
            prohibit the transfer of NFIP funds, and funds authorized and
            appropriated for the Map Modernization Initiative, for other
            purposes by DHS.
      --ASFPM urges the Subcommittee to require DHS to report on the use of
            certain NFIP funds to support Federal employees, specifically,
            the number of such positions, where they are located, how many
            are vacant and for what period of time, and how those specific
            positions directly support the NFIP.

                  CONTINUE SUPPORT FOR FLOOD MAP MODERNIZATION

        Good flood maps play a major role in disaster cost reduction
    through wise floodplain management and are use for many purposes beyond
    the immediate needs of the National Flood Insurance Program. FEMA
    estimates that local regulation of flood hazard areas, using the flood
    maps, avoids property losses of over $1 billion each year. FEMA's
    estimate does not count the benefits associated with using the maps to
    guide development to less hazard-prone areas. Flood maps yield benefits
    at all levels of government, including reducing the need for Federal
    disaster assistance when people build elsewhere or build to minimize
    damage.
        Initiated with the fiscal year 2003 appropriation of $200 million
    for the multi-year Flood Map Modernization effort, FEMA and States will
    use current technologies to expedite cost-effective collection of
    mapping data and to develop the models to identify flood-prone areas.
    This will yield digitized map products that will be accessible on the
    Internet and reduce future costs associated with ongoing map revisions
    and updates.
      --ASFPM strongly endorses the Administration's request for $200
            million and urges the Subcommittee to request that FEMA report
            on technical partnerships that are forming with States and
            communities, incentives offered to foster those partnerships,
            and to revisit the time and cost estimates for completion of
            the initiative.
      --ASFPM urges the Subcommittee to express its expectation that FEMA
            will address State-identified priorities and that quality data
            and quality maps are the objective--rather than focus only on
            the quantity or the average age of maps. High quality products
            also serve as incentives and justification for investment of
            State and local funds.

     INCREASE NFIP COMMUNITY ASSISTANCE PROGRAM FUNDS FOR STATE TECHNICAL
                                   ASSISTANCE

        The Community Assistance Program (CAP), funded by 4.4 million NFIP
    flood insurance policyholders, provides small, cost-shared grants that
    provide partial support of State floodplain programs that, in turn,
    provide technical assistance to nearly 20,000 local jurisdictions that
    administer the NFIP's minimum floodplain management regulations. CAP is
    critical because the best way to limit increases in future flood damage
    is to build State capability to work with and train local officials to
    ensure that developers comply with the rules and post-flood recovery is
    undertaken properly. FEMA's staff is too small to provide this vital
    assistance to nearly every community in the country, thus the
    partnership with States was established. In 1995, CAP was funded at
    $4.2 million which, even then, was insufficient to establish adequate
    capacity in every State.
        Currently, CAP stands at $7 million. Although the increased funding
    has improved state capacity and capability to meet the demand, the
    increased workload of state floodplain management offices has far
    outstripped the increased funding. The increased state workload is due
    to the following factors: more demand for technical assistance and
    training of local officials; nationwide emphasis on pre- and post-
    disaster planning and coordination; more communities participating in
    the NFIP; significant increases in the number of properties insured by
    the NFIP; and decreases in FEMA staff, which shifts even more
    programmatic responsibilities to the States. Importantly, the FEMA Map
    Modernization program is generating extreme demands for assistance and
    coordination (implementation is expected to last at least 7 years). It
    is reasonable to predict that Map Modernization program alone will
    necessitate at least one additional full time employee in each State
    floodplain management office, which would require approximately $3.75
    million.
      --ASFPM urges increasing CAP funding to $10 million in order to
            increase the technical assistance and training the states
            provide to the 20,000 communities in the NFIP as FEMA's
            partners, and to successfully implement the Map Modernization
            Program.

       EXPECT AUTHORIZATION TO ADDRESS THE NFIP'S REPETITIVE LOSS PROBLEM

        The National Flood Insurance Program's authorization is due to
    expire on June 30, 2004. On November 20, 2003, the House of
    Representatives passed the Flood Insurance Reform Act of 2003 (HR 253)
    and the Senate Subcommittee on Economic Policy recently marked up the
    companion bill (S. 2238). FEMA has characterized the disproportionate
    amount of claims paid on a very small percentage of NFIP-insured
    properties as the most significant factor that drives increases in the
    cost of flood insurance. Having more flood-prone homes and businesses
    insured by the NFIP is an effective way to reduce the Federal burden of
    disaster assistance.
        Both the House and Senate bills authorize augmentation of the
    existing Flood Mitigation Assistance grant programs to focus on
    repetitive loss problem, and both bills authorize the transfer of funds
    from the National Flood Insurance Fund (generated by premium and fee
    income). The Flood Mitigation Assistance program is mature, with
    virtually all states currently active to some degree, therefore new
    funds can be used immediately. Because the NFIP must be reauthorized
    and extended before June 30, 2004, action on the bills is expected
    before work on appropriations is completed.
      --ASFPM requests that the Subcommittee monitor progress on the Flood
            Insurance Reform Act of 2004. If the S. 2238 passes prior to
            final action on the fiscal year 2005 budget, ASFPM urges the
            Subcommittee to include in the fiscal year 2005 budget the
            authorized transfer of funds from the National Flood Insurance
            Fund to the National Flood Mitigation Fund.
      --Continue to Retain A Separate Account for the Flood Mitigation
            Assistance Program
        The ASFPM appreciates direction in the fiscal year 2004
    appropriations that FEMA maintain the Flood Mitigation Assistance
    Program (FMA) funds separate from other mitigation funds. FMA was
    authorized by the National Flood Insurance Reform Act of 1994, which
    also created the National Flood Mitigation Fund as a separate account.
    FMA is not supported with general funds, but is funded entirely by a
    portion of the service fee collected from the 4.4 million flood
    insurance policies. Therefore, the ASFPM is concerned with the
    Administration's proposal to combine FMA funds with other mitigation
    funds, even to achieve accounting efficiencies. To ensure
    accountability to the policyholders and to ensure that these funds are
    used only for the explicit purposes authorized, the FMA funds are best
    kept separate. In particular, how FMA is administered must not be
    changed. FMA is specifically intended to support cost containment for
    the NFIP, in part by addressing the problem characterized as repetitive
    losses, but also to mitigate against severe flood damage and imminent
    threats due to coastal erosion.
      --ASFPM urges the Subcommittee to clarify--again--that Flood
            Mitigation Assistance Program funds in the National Flood
            Mitigation Fund are not to be co-mingled with pre-disaster
            mitigation funds.

       MONITOR HOW THE DEPARTMENT OF HOMELAND SECURITY ADDRESSES NATURAL
                             HAZARDS AND MITIGATION

        Millions of Americans are at risk--every day--of experiencing
    floods, tornados, earthquakes, hurricanes, wildfires, severe winter
    storms, and other natural hazards. From a broad perspective, ASFPM is
    disturbed that the Department of Homeland Security has deliberately
    diminished focus on natural hazards. Despite continued verbal
    assertions of commitment to FEMA's all-hazards mission, DHS has reduced
    cohesiveness of programs and reduced staff who deal with hazards and
    mitigation. The following are specific concerns: transferring FEMA
    funds to areas of DHS that are not under the jurisdiction of the Under
    Secretary for Emergency Preparedness & Response; detailing FEMA staff
    out of that directorate; and reducing support for the vital network of
    State and local public safety and disaster mitigation officials.
      --ASFPM urges the Subcommittee to monitor DHS proposals and actions
            that affect FEMA programs and staff to prevent unwise and
            unnecessary reduction in FEMA's effectiveness, which in turn
            will jeopardize State and local efforts to deal with natural
            hazards and mitigation.
                                     ______

       Prepared Statement of the International Association of Emergency
                                    Managers

        Chairman Cochran, Ranking Member Byrd, and distinguished members of
    the Subcommittee, thank you for this opportunity to provide a statement
    for the record regarding the fiscal year 2005 budget proposal for the
    Department of Homeland Security.
        My name is Daryl Lee Spiewak, and I am the emergency programs
    manager for the Brazos River Authority in Waco, Texas. I am a certified
    emergency manager, a certified Texas emergency manager, and a Texas
    certified floodplain manager. I currently serve as the President of the
    International Association of Emergency Managers (IAEM). Our over 2,000
    members include emergency management professionals at the State and
    local government levels, the military, private business and the
    nonprofit sector in the United States and in other countries. Most of
    our members are city and county emergency managers who perform the
    crucial function of coordinating and integrating the efforts at the
    local level to prepare for, mitigate the effects of, respond to, and
    recover from all types of disasters including terrorist attacks.
        We respectfully submit suggestions on two particular issues
    relating to the Department of Homeland Security budget for 2005.
    Emergency Management Performance Grants (EMPG)
      --Reject administration request to cap at 25 percent amount which can
            be used for personnel.
      --Request that the funding cut be rejected and the amount increased.
      --Request the program retain all hazards emphasis, including
            terrorism.
      --Urge that funding be specifically designated in the Appropriations
            Bill and maintained as a separate account.
    Hazard Mitigation Grant Program (HMGP)
      --Urge the Committee to return the funding level to 15 percent of
            certain eligible disaster costs.
        In addition, we would like to offer our support for the
    Administration's request for $200 million to continue the Map
    Modernization program and for the $150 million request to continue the
    PreDisaster Mitigation program.
    Emergency Management Performance Grants
        The Emergency Management Performance Grants (EMPG) are pass-through
    funds to State and local emergency management offices to provide a
    foundation for basic emergency preparedness and response capabilities.
    Congressional report language has referred to the program as ``the
    backbone of the Nation's emergency management system.'' This funding
    has existed in the past under several different names such as the
    Emergency Management Assistance Program and State and Local Assistance
    Program which were actually more appropriate names. This program is
    different from most grants, in that it is a continuing program with
    deliverables and requirements which must be met in order to receive
    funding the following year.
        We very much appreciated the support of the House and Senate
    Appropriations Committees for EMPG in the fiscal year 2004 Department
    of Homeland Security Appropriations Bill. Congress specifically
    designated funds in a separate account, increased the amount from the
    fiscal year 2002 level to $179 million; specifically indicated the
    funds could continue to be used for personnel costs and supported the
    all hazards approach. The House Report recognized that ``State and
    local emergency managers rely on these funds for a variety of expenses,
    but predominately for personnel who plan, train, coordinate, and
    conduct exercises and other functions essential to effective
    preparedness, mitigation, response, and recovery efforts.''
        Reject Cap on Expenditures for Personnel.--Since the purpose of the
    program is to provide support for State and local emergency management
    personnel, the Administration's request to cap the amount of funds
    which can be used for personnel at 25 percent of each grant is
    puzzling. Since the functions of emergency management are almost 100
    percent personnel driven, such as planning, coordinating, exercise
    design, training, and public education, the effect of the 25 percent
    cap would be devastating. States have estimated that this cap would
    result in potential losses of up to 60 percent of their emergency
    management staff. In some localities it would result in the elimination
    of whole programs. We would be cutting capacity at the very time we
    need to be building capacity.
        Perhaps to put this proposed cap in perspective one could consider
    the effect on the functioning of a Congressional office or a
    Congressional Committee if directions were given to only spend 25
    percent of the funds received for running the offices on personnel and
    administrative costs.
        Reject Funding Cut and Increase Funding.--Historically, funding for
    EMPG has been inadequate. The program was intended to be 50 percent
    Federal and 50 percent State or local funding. Currently many
    jurisdictions receive 20 percent or less. Some jurisdictions do not
    receive any EMPG monies due to inadequate funding levels. State and
    local emergency management programs are in desperate need of financial
    support if they are to continue to meet the requirements of all hazard
    planning and coordination as well as implement the President's homeland
    security strategy in States, counties, cities and neighborhoods across
    America. The new security concerns arising from the current world
    situation make the coordination and unifying role served by emergency
    managers more important than ever. Given continued support and funding,
    emergency managers have the skills, the expertise, and the willingness
    to rise to the planning and coordinating challenges presented by the
    full range of hazards affecting their communities.
        We respectfully request that the $9 million reduction in the
    President's request be rejected and that the funding be increased. A
    2004 study by the National Emergency Management Association (NEMA)
    indicates that at the 50-50 shared cost level there is a $245 million
    shortfall.
        Maintain the All Hazards Approach.--Legislative language is
    included in the Administration's 2005 request giving ``priority to
    homeland security activities.'' The simple fact is that almost all
    emergency management activity creates a generic capacity to deal with
    crises. For nearly 50 years, the Federal Government has provided
    funding assistance to State and local governments to support a
    comprehensive national emergency management system. During that time,
    the Federal emphasis has shifted on numerous occasions and our members
    have adjusted programs accordingly. There is no doubt that ``homeland
    security'' (currently, although we believe, incorrectly, defined as
    terrorism) has priority today, but the proposed language certainly has
    the potential to limit the ability of the emergency management system
    to adjust to changes in the future and is therefore problematic.
    Hazard Mitigation Grant Program
        Restore Hazard Mitigation Grant Program (HMGP) to 15 percent. The
    Hazard Mitigation Grant Program in the Emergency Preparedness and
    Response Directorate provides post disaster mitigation funding. The
    program is authorized in Section 404 of the Robert T. Stafford Disaster
    Relief and Emergency Assistance Act (Public Law 93-288) and the monies
    are provided from the President's Disaster Relief Fund. We appreciate
    the House and Senate Appropriations Committees retaining the program
    rather than terminating it as requested in the Administration's Budget
    requests in fiscal year 2003 and fiscal year 2004. However, the fiscal
    year 2003 Omnibus Appropriations bill changed the formula used to
    determine hazard mitigation funding from 15 percent to 7.5 percent of
    eligible disaster costs. In order to reduce future disaster costs,
    commitments must be made to both pre-disaster and post disaster
    mitigation. Citizens and elected officials are most receptive to
    undertaking projects and initiatives that reduce the impacts of future
    disasters immediately after a disaster has occurred. Without the HMGP
    funding, those opportunities will be missed.
        The House unanimously passed H.R. 3181 in November of 2003 which
    would have restored the funding to 15 percent. This bill is pending in
    the Senate Environment and Public Works Committee and at this time it
    is not known if action will be completed given the limited time left in
    this legislative session. We, therefore, urge that the HMGP program be
    restored to 15 percent.
    Flood map Modernization and PreDisaster Mitigation
        IAEM supports the Administration's request for $200 million for
    flood map modernization. Flood maps play a key role in disaster
    reduction, mitigation, and community planning and development
    activities. Many of the flood maps in place are 15 to 30 years old and
    do not reflect recent development and may contain inaccurate
    information about the floodplains as a result. FEMA estimated the cost
    of a multi-year map modernization plan at $750 million over a 7-year
    period. We support this multi-year effort.
        IAEM supports the Administration's request for $150 million for
    predisaster mitigation. We believe that both predisaster and post
    disaster funds are important for reducing future disaster costs. We
    support administrative funds being available to FEMA to administer the
    program and urge that FEMA review and streamline the application
    process.
        Thank you for giving us the opportunity to provide this testimony.
    We would welcome the opportunity to provide additional information to
    the Subcommittee.
                                     ______

      Prepared Statement of the National Emergency Management Association

    Introduction
        Thank you Chairman Cochran, Ranking Member Byrd, and distinguished
    members of the Committee for allowing me the opportunity to provide you
    with a statement for the record on the Department of Homeland Security
    (DHS) fiscal year 2005 budget. I am Edward F. Jacoby, Jr., President of
    the National Emergency Management Association and Director of the New
    York State Emergency Management Office. In my statement, I am
    representing the National Emergency Management Association (NEMA),
    whose members are the state emergency management directors in the 50
    States and the U.S. territories. NEMA's members are responsible to
    their governors for emergency preparedness, homeland security,
    mitigation, response, and recovery activities for natural, man-made,
    and terrorist caused disasters.
        At this time, the Department of Homeland Security has been in place
    for over a year and the state of emergency management in our Nation is
    of grave concern. Each day, State and local governments are responding
    to natural and man-made disasters, the threat of terrorism remains
    elevated while fortunately, actual terrorism incidents remain sporadic
    on U.S. soil. The multi-hazards emergency system continues to be the
    means to practice and exercise for devastating acts of terrorism, while
    at the same time preparing the Nation for hurricanes, tornadoes,
    hazardous materials spills, and floods. Yet, all-hazards preparedness
    may be a thing of the past as more focus is being placed on terrorism.
    We must ensure that our capability to deal with many hazards, including
    terrorism remains intact and that we do not shift our focus to
    preparedness for a single peril.
        The capability to coordinate an effective response to an event does
    not change by the type of disaster. The all-hazards approach relies
    upon the maintenance of plans, trained personnel to carry them out, and
    supporting infrastructure in the form of emergency operations
    facilities with inter-operable communications. We must continue this
    approach in practicing and exercising for devastating acts of
    terrorism, as well as day-to-day emergencies. We cannot afford to lose
    the system we have in place to deal with all disasters in order to
    build new infrastructure for homeland security's sake.
        The Department of Homeland Security budget provides critical
    support to State and local emergency management programs through actual
    dollars, grants, and program support. This year, NEMA would like to
    address three main issues with the proposed Federal budget for
    Department of Homeland Security.
      --Extreme concern for the 25 percent cap on personnel use and the cut
            to the Emergency Management Performance Grant (EMPG) program;
      --Support for continuing and enhancing the Homeland Security Grants,
            which must be coordinated and managed through the States; and
      --Concern about the reduced formula for the post-disaster Hazard
            Mitigation Grant Program (HMGP).

                  EMERGENCY MANAGEMENT INFRASTRUCTURE FUNDING

        The Emergency Management Performance Grant (EMPG) is the single
    all-hazards emergency preparedness grant program in support of capacity
    building at the State and local level. While the State and local
    government partnership with the Federal Government to ensure
    preparedness dates back to the civil defense era, increased
    responsibilities over the last decade have fallen on State and local
    governments. With the recent expanded focus on terrorism and the
    increased demands of the Federal Government to assist in the National
    Strategy for Homeland Security, EMPG is the vital source of funding to
    assist State and local governments in ensuring that the infrastructure
    is in place to address all of the traditional hazards that threaten
    communities--including terrorism.
        More than any other intergovernmental program, emergency management
    and disaster response are a joint and shared responsibility among all
    levels of government. The increase or decrease in resources for one
    level has a direct impact on the other partners. For example, a
    decrease in the capability of local governments to respond to any
    disaster automatically passes the burden of cost and long-term
    redevelopment activities to the State, and then to the Federal
    Government. Unfortunately, the consequences of such policies are much
    more significant in terms of the effects of disasters on our citizens
    and communities. The inability to respond to life-threatening
    emergencies by the local government cannot be replaced by efforts at
    the State and Federal levels. Likewise, the basic elements of
    comprehensive emergency preparedness cannot be replaced by narrow
    program funding for homeland security efforts.
        The President's budget proposal will have a devastating impact on
    the Nation's emergency management system at the same time that
    responsibilities are increasing for new and emerging hazards. The
    proposal decreases funding for the EMPG program by $9 million,
    increases the focus on terrorism, and most destructively, the proposal
    imposes a 25 percent cap on personnel uses of the EMPG grants. Over the
    last 2 years, Congress has affirmed the importance of EMPG in
    appropriations bills in language addressing the significance of the
    program and increased the levels of funding for the program twice.
    Prior to these increases in fiscal year 2003 and 2004, the program had
    been straight lined for over a decade. NEMA is appreciative of
    Congress' recognition of the EMPG program, but this year we
    respectfully ask that Congress not only address the programs
    shortfalls, but maintain the EMPG multi-hazard approach and the
    program's flexibility to be used for personnel without arbitrary
    constraints.
        EMPG is the only all-hazards program that State and local
    governments can use to build their emergency management capacity. The
    grants can be used for personnel, planning, training, exercises,
    warning systems, emergency operations centers, public outreach, and
    interagency coordination. EMPG is a flexible program that allows State
    and local governments to tailor funds to address the specific risks and
    needs of their jurisdiction. While it is called a grant, EMPG is really
    a cost-share system which ties together the emergency management system
    of local, State, and Federal Governments. EMPG's modest Federal
    increases in 2003 and 2004 helped the program grow, but the program
    continues to be funded at greater levels by State and local
    governments. States are continuing to increase their out of pocket
    costs in order to ensure there is adequate funding for local programs.
    In fact, a 2004 NEMA study found that there is approximately a $245.9
    million shortfall in EMPG for all 50 States. This means that many
    communities that would like to implement a full-time, professional
    emergency management capability cannot do so because of shortfalls in
    Federal funding. Further, EMPG is primarily used as a pass-through
    program for local governments, so the shortfall affects our smallest
    localities that are often those most in need of emergency preparedness
    planning.
        Changing the focus of the program to terrorism could severely
    hamper the ability of State and local government capabilities to
    respond to a wide range of events with a higher likelihood of occurring
    such as natural disasters, non-traditional disasters like the Columbia
    Space Shuttle explosion, Mad Cow disease, West Nile virus, civil
    unrest, and hazardous material incidents. An increased homeland
    security focus must be viewed as an enhancement to our basic emergency
    management capacity. Success in building vigorous and robust
    capabilities for homeland security will be sabotaged by taking away the
    basic building blocks of the emergency management system. While
    terrorism is a major focus at this time, we must balance preparedness
    efforts by integrating terrorism as one of the many threats facing our
    Nation, rather than the current approach of making all other
    preparedness efforts a subset of terrorism. Further, Homeland Security
    Presidential Directive 8 States that, ``to the extent permitted by law,
    Federal preparedness assistance will be predicated on the adoption of
    statewide comprehensive all-hazards preparedness strategies.'' The all-
    hazards approach cannot be dismissed based upon the assumption that one
    threat is greater and more significant than the other. After all, no
    one really has a crystal ball to predict what the next disaster or
    emergency may be. However, last year there were no terrorism disaster
    declarations and 56 major disaster declarations, 19 emergency
    declarations, and 46 fire suppressions declarations. Our system for
    day-to-day public safety and homeland security must be mutually
    supportive and nimble enough to address any hazard.
        The most significant attack on the way that emergency management
    functions in this country is the proposal to cap personnel costs for
    EMPG at 25 percent. The cap will result in immediate, near-term and
    long-term degradations in the Nation's ability to effectively address
    emergencies and disasters. Citizens and communities that handled
    emergencies locally may no longer be able to do so and the
    responsibility and costs will be passed to the next higher level of
    government. But the costs will be greater, more frequent, and more
    dramatic. A 2003 NEMA survey on EMPG found that 1,565.5 or 42.9 percent
    of state level full time positions are supported in part by EMPG funds.
    Eighty-three part-time state emergency management personnel are funded
    in part or entirely with EMPG funds. At the local level, 2,172 full-
    time positions and 1,184 part-time positions are supported by EMPG.
    States are reporting to NEMA potential losses of up to 60 percent of
    their emergency management personnel should this arbitrary cap be
    imposed. A snap-shot of the impact in Mississippi shows that 75 percent
    of state emergency management personnel and 95 percent of local
    emergency management personnel are funded by the program and both
    programs would have to sustain significant cuts under the proposal. In
    West Virginia, the cap could cost the State 18 full-time employees from
    emergency management and 38 full-time employees in local positions for
    emergency management. While the Administration explains that this
    measure would allow for more training and exercises, we find it hard to
    understand how extra training and exercises could be accomplished with
    less man-power. Emergency management personnel, particularly at the
    local level, provide the coordination function for all disaster and
    emergency response. How can we expect the response to terrorism to be
    effective and efficient without proper coordination among responders?
        The Federal Government must continue the commitment to ensuring
    national security though all-hazard preparedness. Without adequate
    numbers of State and local personnel to operate the all-hazards
    emergency management system, the infrastructure used to prevent,
    prepare for, respond to, and recover from all disasters will collapse.
    Congress must affirm the intent of the program and also ensure
    predictable funding levels for the program.

                        HOMELAND SECURITY GRANT PROGRAM

        Congress has made significant attempts to ensure that the Homeland
    Security Grant Program is streamlined and provides greater flexibility.
    We appreciate the attention and funding that the Congress has given to
    ensuring emergency responders are adequately prepared for domestic
    terrorism threats. Emergency responders are better prepared today to
    face the various threats associated with terrorism because of the
    Federal commitment to address the war on terrorism that is being played
    out in our States, cities, and towns. States continue to take an all-
    hazards approach to disaster preparedness as we have integrated our
    domestic preparedness efforts into the proven systems we already use
    for dealing with both man-made and natural disasters.
    Funding Levels
        This year, we are concerned about the President's budget proposal
    for homeland security that would cut over $600 million in funding that
    has been dedicated to improving emergency responder preparedness for
    homeland security. The Federal Government must maintain its commitment
    to ensure that homeland security preparedness continues and the
    Constitutional responsibility to maintain a national defense is not
    compromised. Continuity of effort can only be maintained by State and
    local governments with adequate Federal support, especially when it
    deals with the front line emergency responders. Reductions in funding
    will immediately be translated into reductions in prevention,
    protection, and preparedness activities. We cannot afford to lose the
    strides that we have already made in protecting our country by limiting
    funding, where more is still necessary to achieve the objectives in the
    National Strategy for Homeland Security. The funding level must be
    appropriately increased to address areas where shortfalls exist.
    Further, continued or increased funding should not take away from
    traditional all-hazards capacity building programs for public safety,
    public health, and emergency management.

    One Stop Shop for Grants Information
        The Congressionally created and appointed Advisory Panel to Assess
    Domestic Response Capabilities for Terrorism Involving Weapons of Mass
    Destruction (known as the Gilmore Commission) initially said a
    ``Federal focal point and clearinghouse for related preparedness
    information and for directing State and local entities to appropriate
    Federal agencies is needed,'' in their first report to Congress on
    December 15, 1999. NEMA affirmed the notion of a single visible point
    of contact and coordination of information for State and local
    governments in the August 25, 2000 Resolution on States' Principles for
    a National Domestic Preparedness Strategy.

    Congressional Legislation to Simplify the Grants Process
        As Congress considers legislation to address and reform the
    Homeland Security Grants, we ask that you take NEMA's suggestions into
    consideration. The suggestions include the following:
      --All efforts to increase emergency management capacity must be
            coordinated through the states to ensure harmonization with the
            state emergency operations plan, ensure equitable distribution
            of resources, and to synthesize resources for intra-state and
            inter-state mutual aid. Also, the Stafford Act, which governs
            the way disaster assistance is allocated, successfully uses
            States and Governors as the managers of Federal disaster relief
            funds for local governments, which can become overwhelmed and
            in need of assistance when disasters occur.
      --States understand the need to get funding quickly to the first
            responders and have long coordinated statewide and regionally
            to ensure adequate state assistance to local governments for
            emergency preparedness and response;
      --Each State must have a base minimum level of funding to ensure the
            capacity to respond to any event. Such capacity is necessary
            for homeland security because of the changing nature of the
            threat and also because of the importance our emergency system
            places on mutual aid to respond to events;
      --Traditional emergency management capacity building programs like
            EMPG must be continued as separate and distinct from the
            homeland security grants programs;
      --Duplicative requirements in the grants process must be eliminated
            and flexibility in the use of the grants must be enhanced; and
      --Federal streamlining is necessary to consolidate the Federal grant
            application process for homeland security funds in order to
            ensure that funding can be provided faster to first responders.
            The current application submission, review, and approval
            process is lengthy and should be reviewed for efficiency.

    Fiscal Conditions and Match Requirements
        Further, because the war on terrorism is a national emergency and
    States and local governments continue to be in the toughest fiscal
    situations since the deep recession in the early 1980s, we must be wary
    of programs that would require significant matches. In fact, for local
    governments to meet the match would be even more difficult given their
    fiscal constraints. If a significant match is required, the application
    of this initiative will only go to those agencies and governments that
    can fiscally afford the match and not necessarily where the need is
    greatest. If a match is necessary, we would suggest that the match be
    non-fiscal or in the form of a deliverable as opposed to soft or hard
    dollars. We also recommend continuation of the current match
    requirements for Emergency Operations Centers enhancements of 75
    percent Federal and 25 percent State and local. Waivers may be a way
    for the Federal Government to also address the lack of capital for a
    match when State and local governments are experiencing fiscal
    distress.

    Flexibility for Personnel to Manage the Program
        Greater flexibility to use some of the first responder grants for
    personnel both at the State and local level to manage the programs is
    critical to completing the preparedness mission. As an existing funding
    stream, EMPG is used in part to fund State and local staff to manage
    critical programs including the homeland security grants. The First
    Responder Grants should recognize that personnel are necessary to
    manage these programs, particularly when rigid deadlines are set for
    obligating millions of dollars and accountability is paramount. State
    and local government, emergency management, and responder organizations
    are already working at a maximum capacity within existing resources and
    need Federal support for more than the purchase of equipment.
    Flexibility based on strategic approaches should be the norm, not
    single-issue, narrowly focused grants.

    Standards and Strategy
        NEMA has long supported the development of standards to ensure
    interoperability of equipment, communications, and training across
    State, regional, and local jurisdictions. In terms of establishing
    voluntary minimum standards for the terrorism preparedness programs of
    State and local governments, NEMA offers itself as a resource in this
    area. Our organization, along with other stakeholder groups such as the
    Federal Emergency Management Agency, International Association of
    Emergency Managers, National Governors' Association, National
    Association of Counties, International Association of Fire Chiefs, and
    others, has developed and implemented the Emergency Management
    Accreditation Program (EMAP). EMAP is a voluntary standards and
    accreditation program for State and local emergency management that is
    based on NFPA (National Fire Protection Association) 1,600 ``Standard
    for Disaster/Emergency Management and Business Continuity Operations''
    (an ANSI or American National Standards Institute approved standard)
    and FEMA's Capability Assessment of Readiness (CAR). EMAP is currently
    conducting baseline capability assessments of all states, some of which
    are pursuing accreditation in conjunction with this initial assessment.
    The State of Florida and the District of Columbia were granted
    accreditation through the program. NEMA suggests that these standards
    already being collaboratively developed through EMAP be considered in
    the development of minimum standards for training, exercises and
    equipment. The EMAP baseline capability assessment process should also
    be considered as a model when considering changes or refinements to
    other assessment processes conducted by the Department of Homeland
    Security.
        Further, NEMA has called for a long-term strategy for our Nation's
    homeland security that becomes the ``roadmap'' for the future of our
    Nation on homeland security. Such an effort must define the ``new
    normalcy'' and also address what State and local governments must
    accomplish in order to be prepared for a homeland security event. NEMA
    sees a role for the Gilmore Commission or a similar body to undertake
    the development of such a National Long-Term Strategy for Homeland
    Security. Such an effort must include input from State and local
    stakeholders.

            HAZARD MITIGATION GRANT PROGRAM & PREDISASTER MITIGATION

        NEMA supports efforts by the Congress and the Administration to
    continue both pre- and post-disaster mitigation activities. The two-
    pronged effort can help to address Federal costs towards disasters,
    because both programs can help to lower overall disaster costs. NEMA
    calls on Congress to reauthorize the predisaster mitigation program
    before December 31, 2004 and to also restore the post-disaster Hazard
    Mitigation Grant Program (HMGP) formula to 15 percent.
        Effective February 20, 2003, Congress changed the formula for post-
    disaster mitigation grants from 15 percent to 7.5 percent. This change
    limits the availability of funds for post-disaster mitigation and
    prevents the lessons learned from disasters from being immediately
    incorporated into mitigation projects to prevent losses of life and
    destruction of property. As a result, State governments no longer can
    offer property buy-outs or other mitigation measures to as many
    disaster victims. The months immediately following disasters provide
    unique opportunities to efficiently incorporate risk reduction measures
    in a very cost-effective manner, in many cases lowering the overall
    cost of the project by leveraging other funding sources including
    insurance settlements. We ask that you restore the formula to 15
    percent this year in order to address mitigation needs.
        Some of the most vivid examples of projects that were not funded in
    fiscal year 2003 because of the formula reduction include HMGP projects
    from recent disasters. These properties and projects will remain
    vulnerable with continued risk in future disasters. Some of these
    include:
      --3 acquisitions, 7 elevations, and 7 flood proofing projects for
            properties flooded during Hurricane Isabel and Tropical Storm
            Henri in Delaware;
      --3 outdoor warning siren proposals, one acquisition project for 18
            structures, and one stormwater handling system improvement
            project as a result of a flood declaration in Kentucky;
      --over 88 families who were flood victims remain untouched by post-
            disaster mitigation in West Virginia because of the formula
            change; and
      --over $18.5 million in projects resulting from Hurricane Isabel will
            remain unfunded in Maryland as a result of the lack of post-
            disaster funds.
        The HMGP has proven to be a highly effective tool in steering
    communities toward risk reduction measures, in many cases breaking
    repetitive loss cycles that have cost other Federal disaster relief
    programs multiple times. Cost-benefit analysis is currently a
    requirement for predisaster mitigation programs. We must not lose these
    opportunities to initiate projects to enhance our communities and
    reduce future disaster costs.

                          EMERGENCY OPERATIONS CENTERS

        In fiscal year 2002, $56 million was appropriated to the Federal
    Emergency Management Agency to address Emergency Operations Centers
    (EOCs) improvements. EOCs are the coordination point for State and
    local government in the response and recovery of any disaster or
    incident. After September 11, 2001, NEMA's members saw an implicit and
    urgent need to upgrade the Nation's emergency infrastructure and to
    make it more redundant. After all, the New York City EOC was destroyed
    on that very day as it stood within the World Trade Center 7 Complex.
    The coordinated response effort of the NY State Emergency Management
    Office and the NY Office of Emergency Management was later moved to
    Pier 92 in New York City as a temporary EOC. However, losing the NYC
    EOC provided a valuable lesson to be learned by all States and
    localities on redundancy. The $56 million was allocated to states to
    begin the planning process to assess necessary infrastructure and
    security improvements and security measures to be taken. Since then no
    dedicated Federal funding has been provided for the implementation of
    these plans. Many State and local facilities are out of date; do not
    have the interoperable technology to coordinate with the Federal
    Government or among State and local levels; and lack adequate security
    features. Federal assistance is necessary to match State and local
    commitments to upgrade their EOCs as an integral part of the Nation's
    emergency response system. According to a 2003 NEMA survey, it is
    projected more tan $1.6 billion will be needed to construct and
    maintain State and local primary and alternate EOCS over the next 2 to
    5 years. This includes the costs to consistently upgrade equipment and
    software, train personnel, and conduct operations during emergency and
    non-emergency situations.

                                   CONCLUSION

        As we continue to build national preparedness efforts through the
    Department of Homeland Security, we must not forget about the multi-
    hazard approach to incident management and the role it plays in
    preventing the loss of life and devastation to our communities on a
    daily basis. We must be prudent and thoughtful in addressing homeland
    security enhancements to our exisiting emergency preparedness and
    response system. In this year's appropriations process Congress will
    make critical decisions that shape the future of emergency management
    in this country. As you begin your consideration, we ask you to
    recognize the importance of the EMPG program in building capacity
    through people at the State and local level. I thank you for the
    opportunity to testify on behalf of NEMA and appreciate your
    partnership.
                                     ______

       Prepared Statement of the National Flood Determination Association

        Mr. Chairman and members of the Subcommittee, The National Flood
    Determination Association (NFDA) strongly supports the $200 million
    requested in the President's most recent fiscal year 2005 budget for
    map modernization. NFDA is a national nonprofit organization comprised
    of flood determination companies, their vendors, re-sellers and other
    industry associates involved in the making, distributing and reselling
    of flood zone determinations.
        The flood zone determination industry is a key stakeholder in the
    map modernization initiative. By producing flood zone determinations
    for the lending industry to assist them with the compliance
    requirements of the National Flood Insurance Program (NFIP) and the
    National Flood Insurance Reform Act, NFDA recognizes accurate flood
    maps are an important part of compliance with requirements of the NFIP.
    Today, FEMA paper flood maps are the maps of record for compliance, and
    the flood zone determination industry is the single largest extensive
    user of the maps. In 2001 and 2002, our industry completed 24,507,632
    and 30,211,047 flood zone determinations respectively, related to newly
    originated loans for the mortgage industry. In addition, we completed
    another 5,472,532 and 4,906,743 determinations for the same years for
    loans we were tracking on behalf of lenders that were affected by map
    revisions.
        Map modernization is a positive initiative, not only for the flood
    zone determination industry, but for State and local communities as
    well. By employing state-of-the-art technology, such as Geographic
    Information Systems (GIS) and Geographic Positioning Systems (GPS),
    communities can map their flood risk digitally. As a result, the
    updated maps will be easier and more cost-efficient to update as
    conditions change. In addition, digital flood maps are dynamic visual
    tools for State and local officials, land-use planners, private
    businesses, environmental protection organizations and emergency
    management personnel to recognize and chart areas for future
    development and plan for public safety.
        NFDA has been given the opportunity to provide feedback on the
    current FEMA maps, most of which are greater than 10 years old, in an
    effort to improve the quality of the existing maps as well as create
    some standards for the new maps to be published. These technical
    mapping meetings provide a communication forum that enables the end
    users of the maps, FEMA, and its contractors to identify practical
    solutions to the daunting challenge of maintaining and enhancing the
    accuracy and quality of the FEMA maps.
        As a result of the success from the technical mapping meetings,
    NFDA strongly encourages map modernization representatives to establish
    an advisory committee comprised of stakeholders and FEMA and contractor
    representatives as a means of ensuring regular, consistent
    communication takes place regarding this initiative. In order for the
    new maps to be truly effective, it is critical to emphasize quality
    over quantity. The use of new flood studies to develop quality data
    rather than re-use of possibly out-of-date data is key to achieving
    truly accurate flood maps. Development of consistent mapping standards
    for all communities is also important. An advisory committee modeled on
    the technical mapping advisory council established for 5 years by the
    Flood Insurance Reform Act of 1994 would be able to review the metrics
    used for establishing standards, as well as make recommendations for
    enforcement of those standards in order to create and retain a quality
    product.
        As strong supporters of FEMA, the National Flood Determination
    Association also strongly supports reauthorizing the National Flood
    Insurance Program for 3 more years. Multi-year reauthorization is
    important to the prevention of a program lapse similar to the one that
    occurred in January of 2003 when the NFIP was unauthorized for 13 days.
        Additionally, NFDA asks that important programs such as the natural
    disaster programs remain within FEMA's jurisdiction. Removing such
    programs is a threat to FEMA's effectiveness, and it is important that
    FEMA is allowed to maintain its management without interruption.
        In closing, our association has been an avid supporter of FEMA and
    its map modernization initiative since its inception, and is pleased to
    offer our continued support in the future. As a part of that support,
    we ask that the Committee appropriate the $200 million requested for
    map modernization and reauthorize the NFIP for 3 more years.
                                     ______

          Prepared Statement of the National Treasury Employees Union

        Chairman Cochran, Ranking Member Byrd, distinguished members of the
    Subcommittee; I would like to thank the Subcommittee for the
    opportunity to comment on the fiscal year 2005 budget for the
    Department of Homeland Security (DHS) and specifically its impact on
    the DHS Bureau of Customs and Border Security (CBP).
        As President of the National Treasury Employees Union (NTEU), I
    have the honor of leading a union that represents over 13,000 Customs
    and Border Protection employees who are stationed at 307 ports-of-entry
    across the United States. Customs and Border Protection officers,
    canine enforcement officers, and import specialists make up our
    Nation's first line of defense in the wars on terrorism and drugs as
    well as the facilitation of lawful trade into the United States. In
    addition, legacy Customs personnel are responsible for ensuring
    compliance with import laws and regulations for over 40 Federal
    agencies, as well as stemming the flow of illegal contraband such as
    child pornography, illegal arms, weapons of mass destruction and
    laundered money.
        In 2003, legacy Customs Service employees seized over 2.2 million
    pounds of cocaine, heroin, marijuana and other illegal narcotics.
    Customs and Border Protection Officers also processed over 412 million
    travelers last year, including over 1 million cars and trucks. These
    numbers continue to grow annually. Over the last decade trade has
    increased by 137 percent. Legacy U.S. Customs Service personnel
    facilitate more trade, and interdict more drugs than any other agency
    within the Customs and Border Protection Bureau. The legacy Customs
    Service collects over $20 billion in revenue on over 26 million entries
    involving over $1.2 trillion in international trade every year. The
    legacy Customs Service also provides the Federal Government with its
    second largest source of revenue. Last year, the legacy Customs Service
    deposited over $24.7 billion into the U.S. Treasury.

                            FISCAL YEAR 2005 BUDGET

        The President's fiscal year 2005 budget requests a funding level of
    $40.2 billion for the Department of Homeland Security and from that
    total $6.2 billion is requested for the Bureau of Customs and Border
    Protection (CBP). The CBP includes the legacy inspection and border
    security personnel of the Customs Service, INS, Border Patrol and
    APHIS. The focus of the CBP is security at and in-between ports-of-
    entry.
        Unfortunately, the President's request for the CBP represents a
    token increase from last year's appropriations for all of the agencies
    transferred into the CBP. NTEU believes that this recommendation is
    simply inadequate to meet the needs of Customs and other border
    security personnel, especially in light of their additional homeland
    security missions such as the Customs Trade Partnership Against
    Terrorism (C-TPAT), the Container Security Initiative (CSI), U.S. VISIT
    and the 24-Hour Rule that requires advanced transmission of accurate
    cargo manifest information to the CBP.
        In addition to annual appropriations, Customs also receives funds
    from a user fee account known as the COBRA account. This user fee
    account funds all inspectors' and canine enforcement officers' overtime
    pay as well as approximately 1,200 Customs positions across the
    country. The COBRA account is funded with user fees collected from air
    and sea passengers entering the United States (except from the
    Caribbean and Mexico), commercial vehicles, commercial vessels/barges
    and rail cars. The COBRA fund was recently reauthorized and now will
    expire on March 31, 2005. However, the President's fiscal year 2005
    budget does not address the future reauthorization of COBRA or the
    possible integration of the COBRA fees with other CBP user fees. The
    COBRA fund must continue to be reauthorized or Congress must
    appropriate additional funds to make up for the loss of the user fees
    in the future.
        Despite the increased threats of terrorism, the dramatic increases
    in trade resulting from NAFTA, and new drug smuggling challenges, CBP
    personnel has confronted its rapidly increasing trade workload and
    homeland security missions with relatively static staffing levels and
    resources. While staffing was increased in last year's supplemental and
    fiscal year 2004 appropriations, in the last 10 years, there simply
    have not been adequate increases in staffing and resource levels for
    inspectional personnel and import specialists to successfully conduct
    their missions. The events of September 11 brought attention to the
    fact that the Northern border, and especially the Nations' seaports,
    and the Southwest border are still in urgent need of additional
    personnel and resources.
        In fact, Customs' recent internal review of staffing, known as the
    Resource Allocation Model or R.A.M., shows that the Customs Service
    alone needed over 14,776 new hires just to fulfill its basic mission
    and that was before September 11. In addition, in 2001 the Patriot Act
    called for a tripling of the number of Northern Border personnel from
    the roughly 2,300 personnel who were on the border in the fall of 2001
    to 6,900 by the end of 2004, a number that DHS is far short of
    reaching. According to the testimony of Commissioner Robert Bonner
    before the 9/11 commission on January 28, 2004, the CBP currently has
    approximately 3,900 CBP personnel on the northern border.
        Traffic volume at U.S. land ports-of-entry has steadily increased
    as our shared borders with Mexico and Canada have become more open as a
    result of the NAFTA and other trade initiatives. The steady increase of
    commercial and non-commercial traffic has led to increased wait times
    at many land ports-of-entry, particularly those along the Southwest
    border. Wait times along the Southwest border can often extend to 45
    minutes or more during peak hours. Such lengthy delays can be both
    irritating and costly to businesses and the traveling public.
        The lack of resources at ports-of-entry is also a problem along the
    Northern Border and at seaports. Port security, largely overlooked in
    the Homeland Security Act, must also be a priority of this committee.
    The fiscal year 2005 budget provides only $50 million for port security
    grants as part of the Transportation Security Administration
    appropriation, a reduction of almost $100 million in grant money for
    ports from the President's fiscal year 2004 budget. Each year more than
    16 million containers arrive in the United States by ship, truck and
    rail. In the last 5 years alone, Customs has witnessed a 60 percent
    increase in trade entries processed, and this rate is expected to grow
    an average of 8 to 10 percent a year. Port security must remain a high
    priority for the Department of Homeland Security.
        With increased funding for resources, modern technologies, such as
    Vehicle and Cargo Inspection Systems (VACIS), which send gamma rays
    through the aluminum walls of shipping containers and vehicles to
    enable Customs inspectors to check for illegal drugs or weapons of mass
    destruction, as well as decreasing the amount of time shipping
    containers are out of the supply chain, could be acquired. Other
    technologies, such as portable contraband detectors (a.k.a. Busters),
    optical fiber scopes and laser range finders can be invaluable to
    Customs personnel protecting our borders from terrorists and illegal
    drugs. However, adequate and consistent funding for personnel to
    operate these technologies has not been forthcoming. On a daily basis,
    CBP officers are being tasked with additional anti-terrorism, trade,
    immigration, agriculture and drug smuggling initiatives with little
    increase in across the board staffing, leaving many ports of entry with
    too few personnel to successfully carry out all of the DHS mission
    priorities.

                              CBP PERSONNEL ISSUES

    CBP Personnel Overtime Cap
        An aspect of the consolidation of legacy Customs, INS and APHIS
    inspectors into a single front-line border security position that needs
    to be addressed immediately by this subcommittee is the correction of
    the overtime cap language for all CBP employees. When legacy Customs
    employees joined together last March to form the Bureau of Customs and
    Border Protection, the Department and Congressional appropriators
    realized the differences in overtime systems between the various border
    agencies. Unfortunately, the fiscal year 2004 DHS Appropriations bill
    included a provision that, while intending to provide greater
    consistency in overtime earnings among the front line CBP workforce,
    has instead created additional problems for the CBP workforce, more
    specifically, legacy Customs personnel and the new CBP officers.
        Specifically, the fiscal year 2004 DHS Appropriations bill states
    that all CBP employees are subject to a $30,000 annual overtime cap
    (legacy Customs, INS, APHIS, & new CBP officers). However, the fiscal
    year 2004 appropriations language does not address COPRA (Customs
    Officer Pay Reform Act) overtime earnings for legacy Customs personnel
    and new CBP officers. The original language of the COPRA law included a
    $25,000 cap. However, for the past several years, the annual
    appropriations bills specifically amended COPRA to provide for an
    increase to $30,000 as an overtime cap. Unfortunately, this year's
    (fiscal year 2004) appropriation does not contain this amendment and
    has had the unintended effect of re-instituting a $25,000 cap for only
    those employees covered by COPRA (legacy Customs personnel and the new
    CBP officers).
        Commissioner Bonner is well aware of this problem, as he indicated
    in a November 2003 Commissioner's message to all CBP employees stating
    that, ``we believe that this disparity was not intentional and we have
    begun to take all necessary steps to correct it through the proper
    channels. At my direction, the CBP Office of Congressional Affairs is
    now working with the Department to address this inconsistency through a
    legislative correction.'' NTEU hopes that the Commissioner, working
    closely with the members of this subcommittee, can fix this situation
    both retroactively for legacy Customs employees this year and
    prospectively in the fiscal year 2005 DHS Appropriations bill.
    FLETC 6 Day Training Issues
        On January 1, 2002, at the request of the Federal Law Enforcement
    Training Center (FLETC), the legacy U.S. Customs Service implemented a
    6-day a week training schedule for all basic training courses for
    Customs officers in order to accommodate the higher volume of employees
    being sent to FLETC as a result of the events of September 11.
        Unfortunately, as a result of the 6-day a week basic training
    schedule, the legacy U.S Customs Service, and now the Bureau of Customs
    and Border Protection (CBP) have refused to compensate legacy customs
    officers and the new CBP officers for their sixth day of basic training
    at FLETC. Legacy Customs officers and the new CBP officers receive no
    pay, either ``straight time'' or overtime pay for their work on the
    sixth day of basic training. While there may be disagreement as to what
    overtime system may be appropriate, it is outrageous that these
    employees are required to work 1 day a week for no pay at all.
        This inequity has become even more egregious for legacy Customs
    inspectors due to a recent decision of the Bureau of Immigration and
    Customs Enforcement (BICE), that authorized the retroactive payment of
    FLSA overtime to legacy immigration inspectors who, like legacy Customs
    officers had been assigned to a 6-day workweek while attending their
    basic training at FLETC since January 1, 2002. Again, by forcing
    hundreds of newly trained legacy Customs inspectors and new CBP
    officers to work a sixth day without any compensation while their
    legacy INS counterparts receive FLSA overtime is certain to hinder the
    esprit-de-corps and development of the Department of Homeland
    Security's ``One Face at the Border Initiative'' which has merged the
    legacy Customs and INS inspectional workforces into one border security
    position within DHS. The committee needs to work closely with DHS and
    the CBP bureau to immediately correct this training pay inequity for
    legacy Customs employees and the new CBP officers.

    One Face at the Border
        As the subcommittee is aware, on September 2, 2003, Secretary Tom
    Ridge announced the creation of a new CBP officer position and the
    ``One Face at the Border'' initiative. Under this plan, a new position,
    the Customs and Border Protection Officer (CBPO) would combine the
    duties of legacy inspectors from Customs, INS and APHIS into a single
    front-line border security position at the 307 official ports-of-entry
    across the United States.
        NTEU believes that combining the border protection responsibilities
    that were held by three highly-skilled specialists into a ``super
    inspector'' raises some serious concerns. Each of the job
    responsibilities from the three legacy inspection agencies is highly
    specialized and distinct. By utilizing one employee to perform all
    three primary and secondary inspection functions, will the agency lose
    the expertise that has made the United States border inspection
    personnel second to none?
        NTEU believes that the CBP officer position was created with the
    assumption that the basic skill sets for legacy Customs and INS
    inspectors are similar and NTEU would have to agree with this statement
    as far a primary inspection is concerned. However, it is in secondary
    inspections where expertise is needed. It is in secondary inspections
    where legacy Customs and INS experts ``drill down'' to seek the facts
    they have been trained to find.

    CBP Officer Training
        Prior to the creation of the CBP officer position, legacy Customs
    inspectors received 9 to 12 weeks of intensive basic training on
    Customs Service rules and regulations alone. Now, the new CBP officer
    will receive only 14 weeks of training for all Customs, INS, and APHIS
    rules and regulations. Under the new CBP officer training guidelines,
    legacy inspectors currently on the border will be transitioning into
    the new position in the spring of this year by way of classroom
    training, CD-ROM computer teaching and on-the-job training. While the
    new training will lead to a broader knowledge of the INS, Customs and
    APHIS rules and regulations of entry for passengers and goods entering
    the United States, there is a concern as to whether it will provide the
    specialized expertise necessary to ensure the successful accomplishment
    of the critical missions of the Department of Homeland Security.
        Another aspect of the ``One Face at the Border'' initiative that
    needs more thorough scrutiny is the lack of details with regard to the
    secondary inspection process at ports of entry. Currently, legacy
    Customs and INS inspectors are ``cross-trained'' as to the most basic
    Customs and INS procedures for entry into the United States for
    passengers and goods. However, if a legacy Customs inspector is faced
    with a complicated visa entry situation at an airport or land border
    primary inspection station they have the ability to send the passenger
    to a more intensive secondary inspection where an experienced legacy
    INS inspector can make a determination as to the validity of a
    particular visa. It is unclear whether experts in visa issues or other
    specific Customs and INS border protection matters will continue to be
    readily available for secondary inspection. This issue is even more
    urgent in light of the fact that on January 5, 2004, DHS rolled out its
    new entry/exit visa processing system known as U.S. VISIT. Operating at
    115 airports and 14 seaports across the country, and eventually
    expanding to the 50 largest land border ports of entry by the end of
    2004, U.S. VISIT is currently being manned by only legacy INS
    inspectors because legacy Customs inspectors do not have the on the job
    experience to thoroughly determine the validity of a particular visa or
    passport. NTEU feels strongly that if border initiatives such as U.S.
    VISIT are to be successful, specific expertise must be maintained among
    the CBP officer ranks as it relates to Customs and INS regulations.

    Law Enforcement Officer Status
        In addition, legislative action that would help to ensure the
    retention of Customs and other CBP personnel could include granting law
    enforcement status for legacy Customs Inspectors, Canine Enforcement
    Officers and other border security personnel in the CBP. For example,
    legacy Customs Service Inspectors and Canine Enforcement Officers
    continue to be the Nation's first line of defense against terrorism and
    the smuggling of illegal drugs and contraband at our borders and in our
    ports. Legacy Customs Service Inspectors have the authority to
    apprehend and detain those engaged in terrorism, drug smuggling and
    violations of other civil and criminal laws. Canine Enforcement
    Officers and Inspectors carry weapons, and at least 3 times a year they
    must qualify and maintain proficiency on a firearm range. Yet, they do
    not have law enforcement officer status. They are being denied the
    benefits given to other Federal employees who they have been working
    beside to keep our country safe. Legacy Customs employees face real
    dangers on a daily basis, granting them law enforcement officer status
    would be an appropriate and long overdue step in recognizing and
    retaining the Customs personnel who continue to protect our borders
    from terrorism and drugs. There currently is a bill before the House HR
    2442, which would grant law enforcement status to CBP personnel.
    Representative Filner introduced this bill and it currently has 101
    cosponsors. I would ask the members of this subcommittee to cosponsor
    this very important legislation.

    DHS Proposed Personnel Regulations
        As the committee is aware, the Homeland Security Act of 2002
    authorized the Secretary of Homeland Security and the Director of OPM
    to develop new human resources (HR) systems for Federal employees in
    the Department of Homeland Security in the areas of pay, performance
    management, job classification, labor-management relations, and
    disciplinary matters. As part of the creation of the new DHS HR system,
    a design team composed of DHS managers and employees, HR experts from
    DHS and OPM, and representatives from the agency's three largest
    unions, including NTEU, were assembled to develop a wide range of HR
    options for consideration by Secretary Tom Ridge and OPM Director Kay
    Coles James who will develop the new DHS HR system.
        To support the effort to create the new DHS personnel system, the
    President's fiscal year 2005 budget provides the department with $102.5
    million to develop and implement a new performance-based pay system for
    DHS personnel including funding for a pay for performance pilot program
    within the Coast Guard. NTEU is strongly opposed to the $102.5 million
    requested in the President's budget to fund the implementation of this
    ill-conceived program and believes that this funding would be better
    spent by this committee on additional staffing and equipment to protect
    or borders from terrorism.
        As a member of the DHS Human Resources Design Team NTEU has always
    strongly advocated that in designing pay, classification and
    performance management systems for DHS, that the principles of
    credibility, transparency and accountability must be honored and
    applied to the DHS HR options that were introduced by Secretary Ridge
    and Director James in February. Unfortunately, the proposed DHS
    personnel regulations neither honored nor applied the principles that
    employees in the department deserve.
        As the Committee is aware, the public comment period on the
    proposed DHS personnel regulations, closed on March 22, 2004. It is our
    understanding that DHS received over 2,000 comments during the past
    month from DHS employees, Members of Congress, employee representatives
    and the general public. From an initial review of the submitted
    comments, it can be safely said that the vast majority of the comments
    oppose the proposed pay and job classification system for DHS
    personnel.
        The proposed DHS personnel regulations propose to implement a
    radical change to pay and job classification systems for DHS employees,
    and to increase the linkage between pay and performance. However, no
    reliable information exists to show that this system will enhance the
    efficiency of DHS operations and promote homeland security. Indeed,
    most of the key components of the system are not clearly determined in
    the proposed regulations. The proposed regulations consist only of
    broad statements concerning the creation of occupation clusters of
    related positions in the department and the ability of DHS/OPM to
    create a number of ``pay bands'' for each cluster that relates to skill
    level. The ``pay band'' ranges will be set by an extremely complicated
    formula of mission requirements, local labor market conditions,
    availability of funds, and pay adjustments received by other Federal
    employees.
        The proposed pay system lacks the transparency and objectivity of
    the General Schedule. Critical decisions on pay rates for each band,
    annual adjustments to these bands and locality pay supplements and
    adjustments will no longer be made in public forums like the U.S.
    Congress or the Federal Salary Council, where employees can watch the
    process and have the opportunity to influence its outcome. Rather,
    these decisions would now be made behind closed doors by a group of DHS
    managers (sometimes in coordination with OPM) and their consultants.
        If the proposed system is implemented, employees will have no basis
    to accurately predict their salaries from year to year. They will have
    no way of knowing how much of an annual increase they will receive, or
    whether they will receive any annual increase at all, despite having
    met or exceeded all performance expectations identified by the
    Department. The ``pay-for-performance'' element of the proposal will
    pit employees against each other for performance-based increases.
    Making DHS employees compete against each other for pay increases will
    undermine the spirit of cooperation and teamwork needed to keep our
    country safe from terrorists, smugglers, and others who wish to do
    America harm.
        One thing is clear. The proposed pay system will be extremely
    complex and costly to administer. A new bureaucracy will have to be
    created, and it will be dedicated to making the myriad, and yet-to-be
    identified, pay-related decisions that the new system would require.
        In the area of labor relations, NTEU is extremely disappointed by
    the proposed DHS personnel system. Despite the congressional mandate to
    protect an employee's right to collectively bargain, the proposed DHS
    personnel regulations are drafted as such to minimize the influence of
    collective bargaining so as to undermine the statutory right of
    employees to organize and bargain collectively. When Congress included
    provisions in the Homeland Security Act to protect employees'
    collective bargaining rights, Congress could not have intended those
    rights to be gutted as they are in the proposed regulations.
        For example, the proposed regulations eliminate bargaining over
    otherwise negotiable matters that do not significantly affect a
    substantial portion of the bargaining unit, they eliminate a union's
    right to participate in formal discussions between bargaining unit
    employees and managers, and they drastically restrict the situations
    during which an employee may request the presence of a union
    representative during an investigatory examination. In addition, the
    proposed regulations set and change conditions of employment and void
    collectively bargained provisions through the issuance of non-
    negotiable departmental regulations, assign authority for resolving
    many labor-management disputes to the Homeland Security Labor Relations
    Board, composed exclusively of members appointed by the Secretary, and
    grant broad new authority to establish an entirely new pay system, and
    to determine each employee's base pay and locality pay, and each
    employee's annual increase in pay, without requiring any bargaining
    with employee representatives.
        The Homeland Security Act required any new human resources system
    for DHS employee ``contemporary.'' Unfortunately, the labor relations
    and performance management proposals are, however, remarkably
    regressive. By proposing to silence front-line employees and the unions
    that represent them, DHS/OPM appear to have decided that employees and
    their representatives can make no contribution to the accomplishment of
    the essential mission of protecting the homeland. This backwards-
    thinking approach is at odds with contemporary concepts of labor
    relations.
        In the area of due process for DHS employees the proposed personnel
    regulations make drastic changes. Included in the proposed regulations
    are provisions that bar the Merit Systems Protection Board from
    reducing or otherwise modifying any penalty selected by DHS, which
    would deprive employees of a chance to challenge excessive or
    unreasonable penalties, the proposed regulations eliminate the right of
    a union to submit serious adverse actions imposed against bargaining
    unit employees to an arbitrator, and they reduce an agency's burden of
    proof in adverse actions cases to a standard that would require DHS's
    decisions to be upheld even if they are more likely than not to have
    been improper.
        In addition, the proposed DHS regulations would allow the Secretary
    of Homeland Security to determine an unlimited number of mandatory
    removal offenses or ``deadly sins'' that require mandatory termination
    for DHS personnel, without access to any independent review of the
    charges; the only review would be by an in-house entity. These proposed
    DHS ``deadly sins'' are even more Draconian that the IRS' deadly sins,
    which are subject to independent review and are set by statute, not
    subject to the whim of the current or future DHS Secretaries.
        It is important to note that President Bush supports repealing the
    mandatory termination provisions currently in effect at the IRS and
    legislation drafted by the Administration to do this (H.R. 1528) has
    passed the House with strong bipartisan Congressional, as well as,
    Administration support. The Administration believes that the IRS needs
    more flexibility in this area. Since flexibility has been the primary
    goal of personnel changes at DHS, it is totally inconsistent to
    introduce procedures that take away all discretion by requiring
    mandatory penalties.
        When Congress mandated that DHS employees be treated fairly and
    afforded the protections of due process, and authorized only limited
    changes to current appellate processes, Congress could not have
    envisioned the drastic reductions in employee rights that are in the
    proposed DHS personnel regulations. No evidence shows that current
    employee due process protections or the decisions of an arbitrator or
    the MSPB jeopardize homeland security. While there was support
    expressed in Town Hall meetings and focus groups for speeding up the
    adverse action and appeals process, there was no support for
    drastically altering the process in favor of management or otherwise
    reducing the likelihood of fair and accurate decisions.
        Ideally, a new DHS human resource management system should promote
    esprit-de-corps so as to enhance the effectiveness of the workforce.
    Unfortunately, these proposals fall far short of that ideal. Instead,
    they will result in a demoralized workforce composed of Federal
    employees who feel as if they have been relegated to second-class
    citizenship. This system will encourage experienced employees to seek
    employment elsewhere and will deter qualified candidates from
    considering a career in DHS.
        Thank you for the opportunity to share NTEU's thoughts on a number
    of extremely important issues concerning the Department of Homeland
    Security, its fiscal year 2005 Budget and its front line employees.
                                     ______

                 Prepared Statement of the University of Miami

        Chairman Cochran, Ranking Member Byrd, and distinguished members of
    the Subcommittee, thank you for giving me the opportunity to provide
    testimony on the Disaster Resistant University initiative and to
    request continued funding in the fiscal year 2005 appropriations bill
    of your Subcommittee.
        We very much appreciate the interest of Members of Congress in this
    program. It is a modest program with great benefits.
    Request for fiscal year 2005
        We respectfully request the following language in the fiscal year
    2005 Department of Homeland Security Appropriations Bill Emergency
    Preparedness and Response section of the bill under the Predisaster
    Mitigation section.
        The Committee directs Emergency Preparedness and Response (FEMA) to
    continue the Disaster Resistant University Program by providing
    continued support to the pilot universities and those selected in
    fiscal year 2003 and fiscal year 2004 to implement mitigation efforts
    to reduce their vulnerabilities and improve protection of their
    students, employees, and the Federal investment in vital research.

    Program Background
        The FEMA Disaster Resistant University (DRU) Initiative was created
    to reduce the potential for large loss of life and hundreds of millions
    of dollars in key Federal research and billions of dollars in damage
    from natural disasters. The University of California at Berkeley was
    the prototype and founding member of the program. In October 2000, FEMA
    selected five additional universities to join Berkeley in the pilot
    phase of the program: the University of Alaska at Fairbanks, University
    of Miami, University of North Carolina at Wilmington, Tulane
    University, and the University of Washington at Seattle. The selected
    universities have two elements in common: a vulnerability to disasters
    and a commitment to improve protection of students, faculty and staff,
    and one of our most valuable assets, intellectual property. The pilot
    program was funded with $700,000 in grants from predisaster mitigation
    funds and the U.S. Fire Administration.

    Purpose of the Program
        The purpose of the program is to help the Nation's colleges and
    universities facing the threat of natural disasters and acts of
    terrorism to assess their vulnerabilities and find ways to protect the
    lives of their students, faculty, and staff; their research; and their
    facilities. It will provide a framework and process for other
    universities to do the same.
        The intent of the program was to assist universities by first
    providing a small grant for them to assess their vulnerabilities,
    devise appropriate plans, and set priorities and then to provide grants
    in following years of approximately $500,000 each for the universities
    to take steps to reduce those vulnerabilities.

    Need for the Program
        The Federal Government funds $19.4 billion annually in university
    research, according to the National Science Foundation statistics in
    2001, the latest year available. This Federal investment in the vital
    intellectual property of the Nation should be protected.
        In addition, universities are critical to the economic health of
    their surrounding communities. Their ability to resume operations
    quickly following a disaster greatly speeds the recovery of the entire
    community. For example, the University of Miami is the 3rd largest
    employer in Miami-Dade County and has a $1.9 billion a year impact on
    the community; the University of Washington is the 3rd largest employer
    in the State of Washington and has a $3.4 billion impact; the
    University of North Carolina at Wilmington is the 3rd largest employer
    in the area and is a $400 million annual benefit to an eight county
    area; the University of California at Berkeley is the 3th largest
    employer in the Bay area and generates $1.4 billion annually in the Bay
    area; Tulane University is the largest employer in Orleans Parish and
    the 5th largest in Louisiana with a $1.5 billion gross impact on New
    Orleans; and the University of Alaska at Fairbanks is the largest
    civilian employer in the Tanana Valley. In addition, many universities
    operate medical schools which provide essential clinical services to
    the residents of their communities and adjacent areas.
        Many recent events underscore the need for the program: the loss of
    many years of research at the Texas Medical Center as result of
    flooding from Tropical Storm Allison, the earthquake damage to the
    University of California at Northridge and the University of California
    at Los Angeles, the facility damage and loss of life at the University
    of Maryland as result of a tornado, hurricane damage to the University
    of North Carolina at Wilmington, the earthquake damage to the
    University of Washington at Seattle, and the declaration by the FBI
    that our universities are ``soft'' targets for terrorists.

    Status of the Program
        On December 31, 2003, FEMA published a Notice of Funds Availability
    (NOFA) for grant applications. As directed by Congress, $500,000 is to
    be available to the six existing DRUs and $100,000 each is to be
    available for six new ones to start the process. The funds are from the
    PreDisaster Mitigation Fund.
        The applications were due to FEMA regions on March 1, 2004. The
    FEMA regions have completed preliminary reviews and forwarded the
    applications to FEMA headquarters. Panels will be reviewing the
    applications in late April and awards are expected in early June.
        Forty-four universities and four consortia applied. Applications
    were received from six Historic Black Colleges and Universities (HBCU)
    and one tribal school. Applications were received from universities
    located in nine of the ten FEMA regions.
        Although no additional funding has been made available since the
    original small grants in 2000, great progress has been made by the
    universities with the modest Federal investment. Participation in the
    DRU brought high level commitment and a framework for disaster planning
    and mitigation activities that helped universities focus and enhance
    efforts to protect their students, faculty, staff, vital research, and
    facilities.
        Each university has made significant improvements in developing
    awareness campaigns on campus; assessing their risks, vulnerabilities,
    and mitigation options, prioritizing and implementing some of the
    mitigation options; updating emergency operations plans; and developing
    and implementing plans for business continuity. The universities have
    improved disaster resistant design specifications for buildings and
    their contents, incorporated disaster resistance into campus master
    planning, and partnered more closely with governmental and private
    entities.
        These six pilot universities are making strong efforts to protect
    their over 120,000 students, over 60,000 employees, 1,550 buildings
    valued at over $11,820,458,000, and $1,600,710,000 in annual research.
        The six participating Disaster Resistant Universities look forward
    to continuing their progress and to mentoring the six new universities
    which FEMA will be selecting soon.
        Included in the applications from the six pilots for the fiscal
    year 2003 funding were projects such as protecting windows, tying down
    rooftop mechanical equipment, structural bracing for hurricane damage
    protection for buildings housing major research projects; seismic
    retrofit of the university police Department 9-1-1 dispatch center and
    emergency operations center; developing emergency plans for campus
    special needs populations; seismic evaluation of the power plant vital
    for research facilities; and improving nonstructural hazard mitigation
    in university laboratories, increasing data backup, and expanding
    business resumption planning into departments and research units.

    Streamlining the Process
        We are grateful that the process of getting out the fiscal year
    2003 funding is underway; however, the new application process for the
    fiscal year 2003 funds was very time consuming. Some of the information
    required seemed much more appropriate for communities than a
    university. One pilot university estimated it took 200 hours of staff
    time to prepare the application and several spent more than 150 hours.
    One of the universities applying as a new selection for a $100,000
    grant devoted 150 hours of staff time. In addition the process is time
    consuming for State and local emergency management officials. We would
    like to work with FEMA on suggestions for streamlining the process
    while still maintaining high quality applications.

    Summary of Congressional Interest
        We very much appreciate the support Congress has given this
    program.

    Fiscal year 2002
        The Conference Report on the VA, HUD and Independent Agencies
    Appropriations bill for 2002 (House Report 107-272 ) contained the
    following language:
        The conferees believe that many of the Nation's universities are
    vulnerable to disaster and urge FEMA to continue its Disaster Resistant
    University program and expand the scope to include safe-guarding
    university assets from acts of terrorism.

    Fiscal year 2003
        The Conference Report on the fiscal year 2003 Omnibus bill in the
    FEMA section of the VA, HUD and Independent Agencies stated the
    following:
        The conferees are in agreement that FEMA should continue the
    Disaster Resistant University program and direct FEMA to carry out the
    direction contained in House Report 107-740.
        House Report 107-740 stated the following:
        Finally, the Committee notes that in September of 2000 FEMA
    selected five universities to join the University of California at
    Berkeley in the pilot phase of the Disaster Resistant University
    program: University of Alaska/Fairbanks, University of Miami,
    University of North Carolina/Wilmington, Tulane University, and
    University of Washington/Seattle. The purpose of the program is to help
    the Nation's colleges and universities facing the threat of natural
    disasters to assess their vulnerabilities and find ways to protect
    their research, facilities and the lives of students, faculty and
    staff. The Committee directs FEMA to continue the Disaster Resistant
    University Program with grants of $500,000 to each of the six pilot
    Disaster Resistant Universities and $100,000 each to at least six
    additional universities, including at least one HBCU, to join the
    program.

    Fiscal year 2004
        The Senate Report on the Department of Homeland Security
    Appropriations bill (S. Report 108-86) included the following language
    under the National Pre-Disaster Mitigation Fund which was funded at
    $150,000,000.
        The Committee encourages the Department to continue the existing
    Disaster Resistant University program at the fiscal year 2003 level.
        The House receded to the Senate in the conference agreement.
        We again thank you for the opportunity to provide written comment
    on the need for continued funding of this important program. We would
    welcome the opportunity to provide additional information or to discuss
    the program further with your staff.
                                     ______

      Prepared Statement of the Upper Mississippi River Basin Association

        The Upper Mississippi River Basin Association (UMRBA) is the
    organization created in 1981 by the Governors of Illinois, Iowa,
    Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating
    the five States' river-related programs and policies and for
    collaborating with Federal agencies on regional water resource issues.
    As such, the UMRBA has an interest in the budgets for the U.S. Coast
    Guard and the Federal Emergency Management Agency (FEMA).
        Both the Coast Guard and the FEMA have vital functions specifically
    related to homeland security that must be adequately funded. But both
    also have other traditional missions that are equally important to
    public health and safety, economic well-being, and environmental
    protection. For the Coast Guard, these include activities such as aids
    to navigation, vessel and facility inspections, emergency response, and
    mariner licensing. For FEMA, key traditional missions include the
    National Flood Insurance Program, flood map modernization, hazard
    mitigation, and response to floods and other natural disasters. Nowhere
    are these services more important than on the Upper Mississippi River
    System, which supports a vital link in the inland waterway
    transportation system, some of the Nation's most productive
    agricultural land, population centers ranging from small towns to major
    metropolitan areas, and a nationally significant ecosystem.

                                  COAST GUARD

    Operating Expenses
        A continuing priority for the UMRBA is the Coast Guard's Operating
    Expenses account. The President's fiscal year 2005 budget proposal
    includes $5.173 billion for this account, an increase of almost 10
    percent from the fiscal year 2004 enacted level. However, this net
    increase of $455 million for Operating Expenses is more than fully
    consumed by specific increases tied to implementation of the Maritime
    Transportation Security Act (MTSA); increased personnel costs; and
    operating costs for new vessels, aircraft, and facilities related to
    the Coast Guard's saltwater responsibilities. These initiatives are
    important in their own right and will benefit a range of Coast Guard
    missions. However, it is also true that the Coast Guard's non-security
    missions will be under continued strain as the inflation-adjusted
    resources for these missions remain static or shrink.
        When the Department of Homeland Security was formed, the UMRBA
    strongly supported the Coast Guard's stated objective of sustaining
    traditional missions near their pre-9/11 levels. These traditional
    missions are critical to the safe, efficient operation of the Upper
    Mississippi River and the rest of the inland river system. Under these
    mission areas, the Coast Guard maintains navigation channel markers,
    regulates a wide range of commercial vessels in the interest of crew
    and public safety, and responds to spills and other incidents. The
    beneficiaries include not only commercial vessel operators, but also
    recreational boaters; farmers and others who ship materials by barge;
    and the region's citizens, who benefit enormously from the river as a
    nationally significant economic and environmental resource.
        Even prior to September 11, recent years had brought a number of
    changes to the way the Coast Guard operates on the inland river system,
    including elimination of the Second District; closure of the Director
    of Western Rivers Office; decommissioning the Sumac, which was the
    largest buoy tender on the Upper Mississippi River; and staff
    reductions. While the States understand the need for efficiency, the
    cumulative impacts of these changes must be carefully monitored,
    particularly in light of the increased demands that we are now placing
    on the personnel and assets that remain in the region. The UMRBA is
    quite concerned that staff reductions and resource constraints have
    combined to impair the Coast Guard's ability to serve as an effective,
    proactive partner.
        Specifically, increased security demands have reduced the staff
    assigned to vessel inspections and limited the Coast Guard's
    investigation of reported spills. Sending a single person to conduct
    vessel inspections reduces the rigor of those inspections, and, in a
    worst case scenario, potentially puts the inspector at risk. Similarly,
    electing not to respond to reports of small spills means some of these
    spills will go uninvestigated and puts increased demands on local
    officials, who do not have the Coast Guard's expertise or resources.
    Moreover, it could result in costly delays should a spill turn out to
    be larger than first reported, an all-too-common occurrence. Temporary
    adjustments initially made to accommodate immediate security needs are
    now evolving into long term standard operating procedures. While
    everyone recognizes the need to adjust to our new security environment,
    it is essential for the Coast Guard to retain the capacity to perform
    its traditional missions on the Upper Mississippi River. Toward that
    end, the UMRBA supports the President's fiscal year 2005 budget request
    for the Coast Guard's Operating Expenses account, but urges Congress to
    ensure that sufficient resources from within this account are allocated
    to the Coast Guard's inland river work.

    Research, Development, Testing, and Evaluation
        Through its Research, Development, Testing, and Evaluation (RDT&E)
    program, the Coast Guard conducts cutting edge research in several
    critical areas, including oil spill prevention and response, risk
    assessment, and mariner safety. Of particular note, researchers at the
    Coast Guard's Groton, Connecticut Research and Development Center have
    made invaluable contributions to state-of-the-art fast water spill
    response, in situ burning, and human error reduction. However, the
    President is now proposing to shift the Coast Guard's RDT&E funding to
    the Department of Homeland Security's Science and Technology (S&T)
    Directorate. This proposal represents precisely the kind of diminution
    of the Coast Guard's non-security missions with which the UMRBA and
    others have repeatedly expressed concern. Research on innovative oil
    spill recovery equipment or new methods for combating crew fatigue will
    simply be lost in the department-wide S&T Directorate, with its
    overwhelming focus on homeland security issues. Moreover, the
    President's proposal appears to be inconsistent with Section 888 of the
    Homeland Security Act, which calls for ``the authorities, functions,
    and capabilities of the Coast Guard to perform its missions . . . [to]
    be maintained intact.'' The UMRBA urges Congress to provide adequate
    and direct funding to the Coast Guard's multi-mission RDT&E program in
    fiscal year 2005.

    Reserve Training
        The President is requesting $117 million for Coast Guard Reserve
    Training in fiscal year 2005. The UMRBA States are keenly aware of the
    importance of the reserve forces. During major flood events on the
    inland rivers, reservists have consistently provided exemplary service,
    augmenting the Coast Guard's capabilities and helping to protect public
    health and safety. More recently, many reservists have been called to
    active duty, enabling the Coast Guard to meet many new security-related
    demands. On the inland rivers, this has included increased patrols near
    critical facilities and development of security plans for key inland
    ports. The UMRBA urges Congress to fund Reserve Training at $117
    million in fiscal year 2005, thereby helping to maintain a Coast Guard
    reserve that can effectively execute both homeland security- and
    natural disaster-related missions.

    Boating Safety Grants
        The Coast Guard's boating safety grants to the States have a proven
    record of success. The Upper Mississippi is a river where all types of
    recreational craft routinely operate in the vicinity of 15-barge tows,
    making boating safety all the more important. As levels of both
    recreational and commercial traffic continue to grow, so too does the
    potential for user conflicts. This is particularly true with major
    events like the Grand Excursion 2004, during which flotillas of boaters
    will retrace President Millard Fillmore's 1854 steamboat journey from
    Rock Island, Illinois to the Twin Cities.
        Boat safety training and law enforcement are key elements of
    prevention. However, the future of this successful grants program is
    uncertain. Following the pattern of recent years, the President has
    requested $59 million in fiscal year 2005 funding for boating safety
    grants to the States. This is the amount historically authorized
    without annual appropriation from the Boat Safety Account, which is
    funded by a tax on fuel for recreational motor boats. Successive
    Administrations have not typically exercised their option to request an
    additional $13 million in annual appropriations for the grants.
    However, the authority for the funding from the Boat Safety Account has
    expired and must be extended if the program is to continue in fiscal
    year 2005. Such a provision is currently being considered as part of
    the pending Highway Bill. The UMRBA urges prompt reauthorization of the
    Boating Safety Program, and funding of this important work at $72
    million annually.

        FEDERAL EMERGENCY MANAGEMENT AGENCY (EMERGENCY PREPAREDNESS AND
                             RESPONSE DIRECTORATE)

    Hazard Mitigation
        UMRBA is particularly interested in FEMA programs that help
    mitigate future flood hazards. Mitigation, which is the ongoing effort
    to reduce or eliminate the impact of disasters like floods, can include
    measures such as relocating homes or community facilities off the
    floodplain, elevating structures, and practicing sound land use
    planning. Mitigation planning and projects are essential to reducing
    the Nation's future disaster assistance costs. Given the importance of
    mitigation, UMRBA supports the Pre-Disaster Mitigation (PDM) grant
    program, which was created in fiscal year 2003 and for which the
    President is requesting $150 million in fiscal year 2005. While the PDM
    grant program is still relatively new, it holds promise for enhancing
    communities' ability to prevent future damages, particularly in areas
    that have not experienced a major disaster and thus have not had access
    to post-disaster mitigation assistance through the Disaster Relief
    Fund. In addition, pre-disaster mitigation assistance is an effective
    means of meeting the ongoing need in all communities to plan for future
    floods and reduce their vulnerability before the next flood disaster.
        FEMA is still in the process of awarding fiscal year 2003 grant
    funds, and fiscal year 2004 grant guidance has not yet been released.
    In fiscal year 2003, each State in the country was provided $248,375
    for planning grants. The balance of the $150 million appropriated in
    fiscal year 2003 is being allocated nationally as competitive grants,
    in three phases. While fiscal year 2003 competitive grants have not yet
    been awarded, the review process has concluded. A total of nearly $6
    million in PDM competitive grants will likely be awarded, from fiscal
    year 2003 funds, to communities throughout the five States of the Upper
    Mississippi River Basin. Although the PDM grant program has gotten off
    to a slow start, it holds promise. Thus, UMRBA supports the President's
    fiscal year 2005 funding request of $150 million for the PDM program.

    Flood Map Modernization
        Flood maps are not only used to determine risk-based National Flood
    Insurance Program premium rates, but also provide the basis for local
    regulation of flood hazard areas and for State and local disaster
    response planning. However, most flood maps are over 15 years old and
    are rapidly becoming obsolete. Many flood maps are outdated by the
    effects of land use changes in the watersheds. When outdated maps
    underestimate flood depths, it can often lead to floodplain development
    in high risk areas. It is therefore important that flood maps be
    updated on an ongoing basis and in a timely way.
        The President's fiscal year 2005 budget proposes $200 million for
    FEMA's Flood Map Modernization program. While funding for flood maps
    has increased substantially since the Map Modernization initiative
    began in fiscal year 2003, there are growing concerns about the
    adequacy of the original time and cost estimates. For instance,
    producing updated and accurate maps often requires that new studies be
    conducted. However, the existing map modernization budget is only
    sufficient to fund actual mapping costs and will not adequately cover
    the costs of necessary associated tasks, such as new flood elevation
    studies or levee certifications. In fiscal year 2004, FEMA Region 5 was
    allocated $12 million for map modernization and Region 7 was allocated
    $7.28 million. Given such constrained funding and the fact that mapping
    needs are being prioritized based on population, rather than flood risk
    or need, it is not clear when relatively sparsely populated counties
    along the Mississippi River will be mapped. Ironically, the Federal
    Government, through the U.S. Army Corps of Engineers, recently spent
    approximately $17 million to develop new flood profiles for the Upper
    Mississippi and Lower Missouri Rivers. Unfortunately this updated
    information cannot be fully utilized until sufficient funding is made
    available to modernize and digitize the flood maps for river
    communities. Thus, the UMRBA urges Congress to provide adequate funding
    for map modernization, including sufficient funding to develop new maps
    for the Upper Mississippi and Lower Missouri Rivers based on the new
    flood profiles.

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    Aguirre, Eduardo Jr., Director, U.S. Citizenship and Immigration
      Services, Department of Homeland Security......................   465
        Prepared Statement of........................................   476
        Statement of.................................................   473
    American Public Transportation Association, Prepared Statement of   572
    Association of:
        American Universities, Prepared Statement of.................   571
        State Dam Safety Officials, Prepared Statement of............   576
        State Floodplain Managers, Inc., Prepared Statement of.......   582

    Bonner, Robert C., Commissioner, Bureau of Customs and Border
      Protection, Department of Homeland Security....................   465
        Prepared Statement of........................................   481
        Statement of.................................................   478
    Brown, Michael D., Under Secretary, Emergency Preparedness and
      Response Directorate, Office of the Under Secretary for
      Emergency Preparedness and Response, Department of Homeland
      Security.......................................................   141
        Prepared Statement of........................................   147
        Statement of.................................................   145
    Byrd, Senator Robert C., U.S. Senator From West Virginia:
        Questions Submitted by........97, 172, 274, 291, 335, 419, 448, 541
        Statements of.................................2, 142, 295, 372, 466

    Campbell, Senator Ben Nighthorse, U.S. Senator From Colorado:
        Prepared Statement of........................................   298
        Questions Submitted by.......................................   269
    Cochran, Senator Thad, U.S. Senator From Mississippi:
        Opening Statements of.........................1, 189, 295, 357, 465
        Prepared Statement of........................................   142
        Questions Submitted by...............60, 163 256, 324 403, 437, 527
    Collins, Hon. Admiral Thomas H., Commandant, United States Coast
      Guard, Department of Homeland Security.........................   357
        Prepared Statement of........................................   359
        Questions Submitted by.................................96, 271, 290
        Statement of.................................................   358

    Domenici, Senator Pete V., Senator From New Mexico, Questions
      Submitted by.............................................81, 267, 289

    Garcia, Michael J., Assistant Secretary, Bureau of Immigration
      and Customs Enforcement, Department of Homeland Security.......   465
        Prepared Statement of........................................   496
        Statement of.................................................   493
    Gregg, Senator Judd, U.S. Senator From New Hampshire:
        Questions Submitted by.......................................    95
        Statement of.................................................     4

    Harkin, Senator Tom, U.S. Senator From Iowa:
        Prepared Statement of........................................     8
        Questions Submitted by.......................................   132
        Statement of.................................................     7
    Hollings, Senator Ernest F., U.S. Senator From South Carolina:
        Prepared Statement of........................................   299
        Questions Submitted by...........................125, 351, 434, 459
    Hutchinson, Asa, Under Secretary, Border and Transportation
      Security Directorate, Department of Homeland Security..........   295
        Prepared Statement of........................................   301
        Statement of.................................................   299

    Inouye, Senator Daniel K., U.S. Senator From Hawaii:
        Prepared Statement of........................................     6
        Questions Submitted by...........................282, 350, 431, 458
        Statements of................................................5, 357
    International Association of Emergency Managers, Prepared
      Statement of...................................................   585

    Kohl, Senator Herb, U.S. Senator From Wisconsin, Questions
      Submitted by.................................................133, 186

    Leahy, Senator Patrick J., U.S. Senator From Vermont:
        Prepared Statements of......................................43, 470
        Questions Submitted by.................128, 184, 354, 435, 460, 566
        Statements of..............................................297, 468
    Libutti, Frank, Lieutenant General, Under Secretary, Information
      Analysis and Infrastructure Protection, Department of Homeland
      Security.......................................................   189
        Prepared Statement of........................................   223
        Statement of.................................................   219

    McQueary, Dr. Charles E., Under Secretary, Science and Technology
      Directorate, Department of Homeland Security...................   189
        Prepared Statement of........................................   193
        Statement of.................................................   191
    Mikulski, Senator Barbara A., U.S. Senator From Maryland:
        Prepared Statement of........................................     9
        Statement of.................................................     9
    Murkowski, Frank H., Letter From.................................    29
    Murray, Senator Patty, U.S. Senator From Washington:
        Prepared Statement of........................................    13
        Questions Submitted by.....................................137, 355
        Statements of.....................................12, 144, 374, 472

    National:
        Emergency Management Association, Prepared Statement of......   587
        Flood Determination Association, Prepared Statement of.......   592
        Treasury Employees Union, Prepared Statement of..............   593

    Reid, Senator Harry, U.S. Senator From Nevada:
        Question Submitted by........................................   463
        Statement of.................................................   375
    Ridge, Hon. Tom, Secretary, Department of Homeland Security......     1
        Prepared Statement of........................................    15
        Statement of.................................................    14

    Shelby, Senator Richard C., U.S. Senator From Alabama, Questions
      Submitted by.............................................88, 333, 470
    Specter, Senator Arlen, U.S. Senator From Pennsylvania, Opening
      Statement of...................................................   141
    Stevens, Senator Ted, U.S. Senator From Alaska:
        Questions Submitted by................................172, 266, 417
        Statements of................................................6, 380
    Stone, Admiral David M., Acting Administrator, Transportation
      Security Administration, Department of Homeland Security.......   357
        Prepared Statement of........................................   365
        Statement of.................................................   364

    University of Miami, Prepared Statement of.......................   598
    Upper Mississippi River Basin Association, Prepared Statement of.   601

                                 SUBJECT INDEX

                                  ----------

                        DEPARTMENT OF HOMELAND SECURITY

                                                                       Page
    Accomplishments:
        Achieved by the Department of Homeland Security..............    15
        Of the:
            IAIP Directorate.........................................   220
            Science and Technology Directorate.......................   211
        To Date......................................................   474
        Within the Past Year.........................................   494
    Acknowledgement of Hard Work and Success.........................   514
    Additional Committee Questions........................60, 256, 324, 527
    Adequacy of Resources............................................   508
    Aggressive Collection Against Delinquent Accounts................   556
    Agricultural Inspections.........................................   535
    Agro-terrorism...................................................     8
        Concerns.....................................................    28
    Air:
        And Marine Operations--Northern Border Airwing...............   539
        Cargo........................................................   439
        Marshal Training.............................................   111
        Pilot Program................................................   344
        Screening: Leveraging DOD Research...........................   109
        Security.....................................................   454
        Service to Artesia, New Mexico...............................    34
    Airline Passenger Screening: Wait Times..........................   450
    Airport:
        Funding Formula Changes......................................   449
        Security.....................................................     5
    Al Qaeda.........................................................    25
    Alaska-Canada Border Security....................................    80
    Alert Level Change...............................................     2
    Alien Removals...................................................   561
    All-State Minimum................................................   128
    Alleged Budget Shortfall.........................................   467
    Alteration of Bridges.......................................53, 54, 414
    Alternatives to:
        Detention....................................................   538
        VACIS........................................................   546
    Amnesty for Illegal Aliens.......................................    54
    Anthrax Vaccine..................................................    67
    Appendix.........................................................   211
    Arizona Border Control Initiative................................   527
    Arming Pilots....................................................   352
    Arrest Authority.................................................   562
    Asset Forfeiture Fund............................................   558
    Automated Commercial Environment.................................   534
    Automatic Identification System................................396, 426
    Automation/Information Technology................................   490
    Available New Technologies That Could be Used for Replacement
      Coast Guard Vessels............................................   395
    Aviation Security................................................    21
        Capital Fund.................................................   376
    Backlog..........................................................   503
        Issue........................................................   506
        Reduction....................................................   474
            Plan.....................................................   528
    Basic State Grant Program........................................    71
    Basis for Policy on the Use of the National Laboratories.........   210
    Benchmarks.......................................................   559
    Benefit Fraud..................................................530, 543
    Biodefense Countermeasures (BioShield)...........................   282
    Biological Countermeasures.......................................   260
    BioShield........................................................    66
    Biosurveillance System..........................................62, 256
    Border Patrol:
        IDENT........................................................   315
        Staffing.....................................................   546
        Vehicles.....................................................   547
    Budget:
        And Activities Supporting Cybersecurity R&D..................   210
        For University Centers of Excellence and Fellows Programs....   211
        Request for the:
            Federal Air Marshals.....................................   518
            Purchase and Installation of an Explosive Detection
              System.................................................   386
    Campaign Labor Costs.............................................   114
    Cancelled International Flights..................................    48
    Canine Teams.....................................................   451
        Diversion from Current Missions..............................   111
    CAPPS II.....................................................4, 55, 313
        Airline Passenger Information System.........................   335
        Development and Deployment...................................   397
        System.......................................................   383
        Testing....................................................335, 454
    Cargo and Container Security.....................................   450
    CBP Inspectors...................................................   479
    Charter Flights to Federal Law Enforcement Training Center in
      Artesia, New Mexico............................................    83
    Chemical:
        Detectors....................................................   238
        Plant Security..............................................97, 291
    Chief of Staff's Office..........................................   103
    Chimera..........................................................   560
    CIS Budget Request Concerns......................................   469
    Citizenship......................................................   530
        And Immigration Services...................................528, 541
            And Immigration and Customs Enforcement..................   543
    Coast Guard......................................................13, 80
        Offshore Patrol Cutters......................................    53
    COBRA Extension..................................................   548
    Cockpit Doors....................................................   352
    Competitive Analysis and Evaluation..............................   222
    Computer Assisted Passenger Pre-screening System (CAPPS II)......   441
    Concern Regarding TTIC Being Under the Leadership of the CIA.....   249
    Consolidation of Grant Programs Into the Office for State and
      Local Coordination and Preparedness............................    31
    Construction of NISAC Facility at Kirtland Air Force Base........    35
    Container Security...............................................   532
        Initiative.................................................480, 544
    Contingency Plan for the Flow or Commerce During an Incident at
      One of Our Ports...............................................   391
    Continuation of Operation Safe Commerce..........................    38
    Continued Dumping and Subsidy:
        Act..........................................................   549
        Offset Act Tradeoff..........................................   524
    Contracting Out..................................................   108
    Cooperation of Local and State Law Enforcement Officials.........   514
    Cooperative Law Enforcement With Local Accountable Law
      Enforcement....................................................    52
    Counter Man Portable Air Defense Systems (MANPADS)...............   257
    Counterfeiting and Financial Crimes..............................    68
    Countermeasures..................................................   234
    Counterterrorism Communication...................................     5
    Critical Infrastructure..........................................   132
        Protection............................................190, 246, 291
    Cross-training.................................................548, 558
    Customs and Border Protection..................................532, 544
        At 1 Year....................................................   482
    Customs:
        Officers.....................................................   473
        Trade Partnership Against Terrorism........................480, 532
    Cuts in Grant:
        Funding......................................................    13
        To States to Upgrade Their Public Health Systems.............    27
    Cyber Security..............................61, 255, 256, 258, 283, 285
    Data:
        Between 1996-2003............................................   544
        Integrity Issues.............................................   139
    Database Integration.............................................   355
    Deepwater:
        Awards to Prime Contractors..................................   421
        Budget Request...............................................   402
        Estimates....................................................   423
        Management...................................................   422
        Patrol Boats.................................................   425
    Delivery of State and Local Dollars..............................    32
    Department of Homeland Security Headquarters.....................    78
    Department-wide Research and Development.........................   262
    Departmental:
        Comparisons..................................................   103
        Management...................................................    99
    Detection:
        And Removals.................................................   538
        Technology...................................................   274
    DHS:
        Hiring Freeze................................................    99
        Personnel Regulations........................................   102
    Disaster:
        Medical Assistance Teams.....................................   133
        Relief.......................................................   114
    Discovering Presence of Detonators in Baggage....................   241
    Discrimination Complaints by TSA Screeners.......................   110
    Division of Effort Among the DHS S&T Directorate and Research
      Efforts at Other Government Agencies...........................   204
    Does ICE have Enough Resources to Handle Overstay?...............   522
    Effectiveness of the Screening Process...........................   379
    Effort to Improve Cargo Security Through Operation Safe Commerce.    36
    Emergency:
        Management Performance Grants................................   136
        Preparedness and Response...................................66, 112
    Energy Security..................................................   244
    Enhancing:
        Biodefense...................................................    17
        Border Patrol Integration into CBP...........................   547
        Flight Service/Transportation for Trainees to FLETC..........    34
        Immigration Security and Enforcement.........................    18
    Entry-exit.......................................................     5
    Environmental Monitoring.........................................   233
    Exact Timeframe on the Deployment and Establishment of the
      Northern Border Air Wing.......................................   318
    Expedited Registered Travel Program..............................   398
    Explosives Detection for Passengers..............................   449
    Federal Air Marshals......................................317, 323, 539
        On International Flights.....................................    21
        Program......................................................   395
        Service......................................................   494
        Staffing.....................................................   337
    Federal Law Enforcement Training Center........................332, 353
        In Artesia, New Mexico.......................................    33
    Federal Screener Opt-Out Program.................................   331
    FEMA--Cerro Grande Fire..........................................    87
    Fingerprint Database Integration: Vastly Delayed and Dangerous...   336
    Fire Services....................................................   130
    First Responder:
        Funding......................................................    47
        Responders..............................................58, 84, 130
    Fiscal Year 2005 Budget:
        Increase.....................................................     2
        Plans........................................................   193
        Request.......................................15, 16, 364, 480, 495
            For IAIP.................................................   221
    FLETC............................................................   320
        Budget:
            Charleston...............................................   344
            Facilities Operating Funds...............................   344
        Capitol Police Training Costs................................   345
        Facility at Artesia, New Mexico..............................   394
        Other Issues.................................................   345
    Flexibility in Authority to Distribute Funds to High-risk Areas..    41
    Flight Cancellations...........................................136, 437
    ``Force Multiplier'' to Federal Air Marshals.....................   115
    Four Priorities Embedded in the Budget Request...................   359
    Fraudulent Documents.............................................    50
    Fugitive Operations..............................................   538
    Funding:
        Federal Air Marshals and Port Security Grants................   108
        For:
            Enforcement Activities...................................   503
            Fire Departments.........................................    58
            First Responders.........................................     3
            Implementation of the Maritime Transportation Security
              Act....................................................    38
        Real Needs and Not Wants.....................................   392
        Transfers/Legislative Proposals..............................    77
    GAO Deepwater Program Management Report..........................   409
    Grant:
        Applications.................................................   341
        Consolidation...........................................11, 70, 107
        Within ODP...................................................   340
    Guest Worker Program.............................................   528
        And Contracts................................................   275
        Concerns.....................................................   506
        Funding for the National Center for Missing and Exploited
          Children...................................................    54
    Gulf Coast Maritime Domain Awareness Initiative..................   416
    HAITI............................................................   355
    Hazardous Material Transportation Funding........................   463
    HC-130J..........................................................   433
    HC-130JS Compared to the HC-130HS................................   385
    HH-65 Helicopter.................................................   429
    High:
        Interest Vessel Boardings....................................   430
        Threat:
            High Density Urban Area Security Grants..................   120
            Urban Area Grants........................................    75
    Highlights of:
        Accomplishments..............................................   191
        Service to the Nation Over the Past Month....................   358
    Hiring Freezes...................................................   467
        For ICE and CBP..............................................   468
    Hiring Priorities................................................   108
    Hollywood Job....................................................   453
    Homeland Security:
        Advisory System.............................................60, 283
        Centers of Excellence........................................   260
        Information Network..........................................   284
        Operation Center.............................................   222
    How:
        IAIP Funds are Being Spent...................................   190
        Threat Determinations are Made...............................    41
    IAIP Staffing..................................................190, 292
    ICE Response...................................................501, 517
        To Overstay Question.........................................   521
    IDENT/IAFIS Integration Project..................................   325
    Imbalance in Coast Guard Since 9/11..............................   388
    Immigration................................................98, 131, 348
        And Border Security..........................................    51
        And Customs Enforcement....................................536, 559
            And Citizenship and Immigration Services.................   115
        Enforcement..................................................   314
        Processing Fees and the Backlog (CIS)........................   542
        Reform and Control Act (ICRA)................................   543
        Related Casework--Assistance to Congressional Offices........   115
        System.......................................................   502
    Impact of:
        Deteriorating Ships, Coast Guard Cutters, Helicopters and
          Other Assets on Coast Guard's Ability to Carryout its
          Missions...................................................   376
        President's Amnesty Proposal.................................    22
        The President's Reform Plan..................................   541
        Transfer of Grant Programs from FEMA.........................    32
    Impact on Rural States...........................................    45
    Implementation of Air Cargo Strategic Plan.......................   108
    Improving Aviation Security......................................    18
    Increase Cap for the H2B Visa Program............................   469
    Increased:
        Burdens on First Responders..................................     7
        Requirement for Airlift Capacity Since 9/11..................   384
    Increasing Preparedness and Response Capability..................    19
    Information:
        Analysis.....................................................   190
            And Infrastructure Protection............................    60
              Questions Submitted to.................................   282
    Infrastructure Vulnerability and Risk Assessment.................   221
    Installation of Radiation Portal Devices at Ports of Entry.......   511
    Insufficient Use of Screening Equipment--GAO Testimony...........   456
    Integrated:
        Deepwater System (``Deepwater'').............................   403
        Fingerprint:
            Data Bases...............................................   525
            Systems..................................................   347
        Terrorist Watch List.........................................   292
    Integration of:
        Database Systems in Fiscal Year 2004.........................   311
        Information Technology Systems...............................    76
        Passenger Analysis Units and Consolidated Antiterrorism
          Secondary Examinations.....................................   479
    Intelligence:
        Analysis.....................................................   135
        Dissemination................................................   126
    Interagency Collaboration.......................................87, 268
        Of Homeland Security Research Efforts........................   263
    Interdiction and Seizure of Assets of Drug Smugglers on the High
      Seas off the Coast of South America and the Caribbean..........   377
    International Flight Cancellations...............................    20
    Interoperability Grants..........................................   339
    Interoperable Communications and SAFECOM.........................   235
    Investigative Emphasis...........................................   563
    Investing in Human Capital and Building Departmental
      Infrastructure.................................................    19
    Invitation to Secretary Ridge to Make a Statement................    14
    Is the Challenge Too Great?......................................   509
    Is There Money in the President's Budget to Implement the
      President's Amnesty Proposal?..................................   516
    ISIS Border Coverage.............................................   546
    Joint Customs and Border Protection and Immigration and Customs
      Enforcement....................................................   556
    Justification for Cutting First Responder Grants.................   237
    Kudos for Chairman Cochran.......................................   516
    Land Border ``Exit'' Control of US VISIT.........................   548
    Law Enforcement:
        Budget.......................................................   504
        Support Center...............................................   537
        Training Center in Williston, Vermont........................   468
    Legacy INS Program Funding.......................................    23
    Lessons Learned From Operation Safe Commerce.....................   510
    Letters of Intent................................................   457
        For Explosive Detection System (EDS) Installation............   444
    Level of Attention to the Likelihood of Threats to Other Modes of
      Transportation.................................................   379
    Limit on Full-time Equipment, Baggage and Personnel..............   387
    Limited Immigration Enforcement Resources........................   560
    Long-Range Radar.................................................   540
        System.......................................................   318
    Machine-Readable Passport Deadline...............................   541
    Making Pacific Fleet All 130JS...................................   385
    Manpads Surface to Air Missile Counter Measures..................   238
    MANPADS/Air Missile Countermeasures..............................   254
    Maritime:........................................................
        And Land: A Lack of Focus....................................   454
        Transportation:
            Act......................................................    12
            Security Act (MTSA) Implementation.......................   431
    Meeting Our Twin Goals: Building More Secure and More Efficient
      Borders........................................................   484
    Metrics Developed by the Science and Technology Directorate......   205
    Metropolitan Medical Response System.............................   116
    Mission Hours....................................................   419
    Nation is Vulnerable.............................................   467
    National:
        Alert System................................................. 6, 81
        Biological Surveillance......................................   232
        Center for Missing and Exploited Children....................    54
        Communication System.........................................   222
        Critical Infrastructures.....................................   286
        Infrastructure Simulation and Analysis Center..........81, 254, 289
        Plans and Strategies.........................................   222
    Nebraska Avenue Complex..........................................   107
    Need for Integrated Systems......................................   466
    New:
        Backlog Elimination Plan.....................................   475
        CBP Uniform for All CBP Inspectors and Created an Office of
          the Border Patrol..........................................   479
        DHS Regulations Supplemental Funding Requirements............    29
        Priorities...................................................   475
    NOAA:
        Alert System Report..........................................   246
        Warning Advisory System......................................   245
    Non-intrusive Screening of Passengers for Explosives.............   398
    Non-Security Missions............................................   431
    Northern Border Air Wing.........................................   317
    Notice and Protest Process.......................................   555
    Number of Illegal Aliens Residing in the United States.........471, 507
    Obligated Funding................................................   293
    Obligations......................................................   118
    Office:
        For Domestic Preparedness...................................70, 116
            Use of Database Information..............................   287
    Office of:
        Legislative Affairs..........................................   106
        Public Affairs...............................................   104
    Oil Platforms....................................................   416
    $1.2 Billion Shortfall Cause of Hiring Freeze....................   472
    On-Line Filing of Applications...................................   531
    Operation:
        Noble Eagle..................................................   420
        Predator...................................................471, 494
        Safe Commerce................................................    12
    Organization and Standup of the TTIC and ITS Function............   251
    Other:
        Issues.......................................................   349
        Traditional Missions.........................................   491
    Outreach and Partnership.........................................   222
    Outside Inputs to the S&T Budget.................................   205
    Overall Coast Guard Budget Request Only 6 Percent Increase.....126, 434
    Overdue Congressional Reports....................................    56
    Overseas:
        Airline Passenger Inspection.................................   545
        Operations Integration.......................................   556
        Staffing.....................................................   528
    Overstays........................................................   471
        On Visas.....................................................   509
    Pacific Northwest National Laboratory............................   512
    Passenger:
        And Baggage Screeners........................................   445
        Screening & Checkpoint Issues................................   128
    Pay Disparity....................................................   558
    Performance Based Pay System....................................77, 327
    Plan for Adjournment.............................................    57
    Port Security................................11, 12, 312, 346, 390, 433
        Assessments..................................................   413
        Funding......................................................   401
        Grant Funding................................................   402
    Ports............................................................   513
    Postponing or Deferring of Any Program Initiatives...............   502
    President's Immigration Proposal.................................   543
    Primary Threat, Target, and Delivery Systems.....................    25
    Prioritization...................................................   204
        Of Research and Development Efforts..........................   192
    Priority Mission of CBP..........................................   480
    Private Sector Share of Port Security............................    39
    Process for Raising Threat Level.................................    42
    Procurement Policy Issues........................................    59
    Project Bioshield................................................   112
    Proposal to Drop the All-State Minimum Formula for Allocating
      State Homeland Security Grant Funds............................    45
    Proposed Movement of Grant Money From TSAT-ODP...................   381
    R&D Consolidation................................................   274
    Rail Security.............................................353, 438, 450
    Rapid Prototyping................................................   264
    Rationale for Budget Increases: BioWatch and the National
      Biodefense Analysis and Countermeasures Center.................   208
    Reconciliation of the Fiscal Year 2004 Budget....................   495
    Redirecting the Base--Office of Investigations...................   536
    Reducing Vulnerability to Terrorist Attacks......................    26
    Refugee Services.................................................   529
    Regional Office and Impact on Existing FEMA Regional Structure...   113
    Registered Traveler............................................111, 453
        Program......................................................   447
    Relationship with Immigration Ombudsman..........................   532
    Remediation and Protective Actions...............................   222
    Report Due at the End of the Fiscal Year.........................   511
    Request for:
        Detention and Removal........................................   513
        Fugitive Operations Teams....................................    23
        The Customs Trade Partnership Against Terrorism..............   515
        Worksite Enforcement.........................................    24
    Rescue 21........................................................   397
    Research:
        And Development...........................................427, 0443
            Consolidation............................................   241
            Funding..................................................   326
        And Technology Information Dissemination.....................   253
        Development, Test and Evaluation.............................   413
    Resources Required to Implement the President's Amnesty Program..    24
    Response Boat Program..........................................389, 390
    Results from Current Research and Development (R&D) Spending and
      Fiscal Year 2005 Plans: Portfolio Details......................   196
    Review of the President's Budget.................................   466
    Rewarding of Deepwater Prime Contractor..........................   383
    Schedule of Needs for Deepwater and Refurbishing of Helicopters..   378
    Science and Technology:
        Budget.......................................................   190
        Directorate Organization.....................................   194
        Funding.....................................................85, 267
    Science and Technology Directorate, Questions Submitted to.......   256
    Screening for Biological Weapons.................................    49
    Seaport Security Implementation Costs..........................125, 351
    Securing:
        Land and Seaports-of-entry...................................   472
        Our Critical Infrastrucure and Key Assets....................   248
    Security:
        Checks.......................................................   474
        Enhancements.................................................   475
        In the Agriculture Sector....................................   134
        Of the Homeland..............................................   251
        Plans:
            For Vessels and Port Facilities..........................   425
            Required Under the Maritime Transportation Security Act399, 400
    Sensor and Surveillance Technology...............................   534
    72-Hour Rule--Southwest Border...................................   325
    Shift of $13.5 Million From the Coast Guard to the Science and
      Technology Directorate.........................................   241
    Shore Facilities.................................................   430
    Short-Term and Long-Term Research................................   208
    Shortcomings in Budget Request...................................   467
    Shortfall in Funding.............................................   500
    Sixth Day of FLETC Training......................................   548
    $64 Million Request for Sensor and Surveillance Technology.......   522
    Small:
        Boat Stations................................................   411
        Business Contracting.........................................   271
    Source of Most Significant Threat to the United States...........    25
    Staffing.........................................................   211
        Of Under Secretary's Office..................................   326
    Standards........................................................   265
    State:
        Formula Grants...............................................   340
        Grants (Including Law Enforcement Terrorism Prevention
          Grants)....................................................   120
        Plans........................................................   124
    Status of:
        Obligation of Funds Appropriated for Operation Safe Commerce.    36
        Ricin Incident Investigation.................................    20
    Stemming the Flow of Illegal Aliens Into the United States.......   471
    Stockpile........................................................   113
    Strengthening Border and Port Security...........................    16
    Support of Funding to Restore the Three-Quarters of 1 Percent
      Minimum to the State Formula Grants Program....................    46
    Supporting:
        Efforts in Iraq..............................................   420
        State and Local First Responders.............................    19
    Task Force.......................................................   119
    Technology of Detection..........................................    49
    Temporary Worker Program.......................................475, 504
    $10 Million Request for Unmanned Aerial Vehicles.................   523
    Terrorist Threat Integration Center.............................21, 249
    Terrorist Watch List.............................................    62
        Integration................................................338, 544
    Tethered Aerostats...............................................   557
        Radar System...............................................328, 541
    Threat:
        Based Distribution...........................................     4
        Determination and Assessment.................................   221
        From Hamas...................................................   452
    Three Priorities.................................................   473
    Timeline for Obligating the Last $17 Million Appropriated for
      Operation Safe Commerce........................................    37
    Trade Enforcement................................................   316
    Training.........................................................   119
    Transfer of R&D Budgets and Activities From Other Directorates...   209
    Transit Without Visa Program.....................................   321
    Transportation Security:
        Administration..............................................63, 108
            Fiscal Year 2004 Shortfall...............................   448
            Questions Submitted to...................................   437
        For all Modes................................................   328
    Trips Around the Country to Various Offices......................   469
    TSA............................................................306, 354
        Detection Systems............................................   239
        Funding: Adequacy of Fees....................................   456
        Reprogramming Proposal.......................................   100
        Role within the Department of Homeland Security..............   329
        Injury and Illness...........................................   457
        Port Security Grants.........................................   319
        Screeners....................................................   320
        Security Contract............................................   448
        Slow Movement of Appropriated Funds........................346, 455
    Turf Battles.....................................................   472
    TWIC.............................................................   452
    U.S. Visitor and Immigrant Status Indicator Technology (US VISIT75, 324
    Underfunded and Understaffed Immigration System..................    22
    Undocumented Workers.............................................    51
    United States:
        Coast Guard..................................................    79
            Questions Submitted to...................................   403
        Secret Service..............................................68, 114
    University:
        Centers of Excellence........................................   274
        Programs...................................................237, 245
            Energy Security..........................................   243
    Unmanned Aerial Vehicles...................................82, 533, 556
    Unobligated Grants Funding.......................................   382
    Unqualified Audit Opinion........................................   398
    Updating Citizenship Processes and Looking at the Test That is
      Given to Those Seeking Citizenship in the United States........   514
    Urgency to Get Funds to First Responders.........................    59
    US VISIT.......................................................304, 308
        Full Disclosure..............................................   338
    Utilization of Department of Energy National Labs................    96
    Vietnamese Exports of Fish Into the United States................   316
    Visa:
        Overstays....................................................   519
        Security Unit................................................   536
    Vulnerability Assessments and Security: Chemical Industry........   252
    Wait Times at Airports...........................................   109
    Way to Reconfigure the Calculation for High-risk Areas to Include
      the Tom Ridge Airport and Erie, Pennsylvania...................    40
    Weapons of Mass Destruction and Incident Management..............   219
    White House Mail Processing......................................    68
    Who is in the Country Legally and Overstayed?....................   520
    Why is China More of a Problem?..................................   525
    Wireless Public SAFEty Interoperability COMmunications (SAFECOM)
      Program........................................................   265
    Worksite Enforcement......................................536, 559, 562

     Office of the Under Secretary for Emergency Preparedness and Response

    Additional Committee Questions...................................   162
    All-Hazards Emergency Planning...................................   142
    Anthrax Vaccine..................................................   163

    Basic Firefighting Equipment.....................................   175
    Bioshield......................................................159, 163

    Communications...................................................   175
    Cuts to Emergency Management Performance Grants..................   157

    Disaster Relief Fund.............................................   154

    Emergency:
        Food and Shelter Program.....................................   169
        Management Performance Grants..........................156, 165 186
    EMS..............................................................   175
        Rescue.......................................................   175

    Fire Grant Program...............................................   155
    First Responder Funding..........................................   145
    Fiscal Year:
        2003 Accomplishments.........................................   146
        2004 Plans...................................................   146
        2005 Budget Request..........................................   146
    Flood Map Modernization..........................................   169
    Hazardous Materials (Hazmat).....................................   175
    Investigation....................................................   176
    Metropolitan Medical Response System.............................   164
    National:
        Disaster Medical System......................................   158
        Incident Management System...................................   162
    Office of National Security Coordination.........................   147
    Other PPE........................................................   176
    Personal Protective Equipment (PPE) List.........................   176
    Pre-disaster Mitigation..........................................   160
    Preparedness, Mitigation, Response, and Recovery.................   165
    Proposal to Limit the Amount of Emergency Management Funds That
      Can Be Spent On Salaries.......................................   144
    Proposed Cuts to Fire Grants Funding...........................143, 161
    Putting the Strategic National Stockpile Back Under the
      Department of Health and Human Services........................   158
    Respiratory......................................................   176
    Specialized......................................................   176
    Strategic National Stockpile...................................153, 164
    Structural.......................................................   176
    Terrorist Attack Concerns........................................   144
    Training Program Titles List.....................................   176
    Transfer of Several All-Hazards Programs From FEMA Into a New
      Office of State and Local Government Coordination and
      Preparedness...................................................   143
    Urban Search and Rescue..........................................   167
    Weapons of Mass Destruction (WMD)................................   176
    Wildland.........................................................   176