    [Senate Hearing 109-]
    [From the U.S. Government Publishing Office]

      COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR
                                FISCAL YEAR 2007

                                  ----------

                             WEDNESDAY, MAY 3, 2006

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:04 p.m., in room S-146, the
    Capitol, Hon. Richard C. Shelby (chairman) presiding.
        Present: Senators Shelby and Mikulski.

                             DEPARTMENT OF COMMERCE

                            Office of the Secretary

    STATEMENT OF HON. CARLOS GUTIERREZ, SECRETARY

                 OPENING STATEMENT OF SENATOR RICHARD C. SHELBY

        Senator Shelby. The subcommittee will come to order.
        I want to welcome all of you to the third hearing of the
    Commerce, Justice, Science, and Related Agencies Appropriations
    Subcommittee.
        We are pleased to have with us today the Secretary of the
    Department of Commerce. Mr. Secretary, the subcommittee
    appreciates your willingness to appear as a witness and discuss
    the needs of your Department.
        Overall, the Department of Commerce budget request for the
    2007 fiscal year is $6.1 billion. This is a decrease of nearly
    $300 million from the Department's fiscal year 2006
    discretionary funding level. The Commerce Department contains
    some of our Nation's most important economic development,
    economic analysis, and science and research agencies, including
    the Economic Development Administration (EDA), the National
    Institute of Standards and Technology (NIST), and the National
    Oceanic and Atmospheric Administration (NOAA).
        The Department is staffed by some of the most dedicated and
    distinguished experts in their fields, including three Nobel
    Prize winners. These scientists, engineers, and economists are
    in high demand inside and outside of the Government, and I hope
    we can hold onto them, Mr. Secretary.
        The subcommittee is concerned, Mr. Secretary, about your
    Department's ability to maintain the level of qualified
    personnel required to provide such needed services to the
    Nation. I hope that you can provide us some assurances today
    that this budget request will not require reorganizations or
    restructuring that will put your ability to support these
    important personnel at risk.
        The National Oceanic and Atmospheric Administration--or
    NOAA--remains one of our Nation's preeminent science agencies
    and represents nearly two-thirds of the Department's budget at
    $3.7 billion. NOAA provides important support for our Nation's
    fisheries, severe weather prediction, and navigation of the
    waters surrounding our country.
        Up-to-date and accurate maps of our navigable waters are
    critical to the shipping industry as well as the fishing
    industry, and I am hopeful that the budget before us today will
    allow NOAA to continue their work in this area.
        Some here today may be surprised to learn that nearly 90
    percent of our world's oceans remain unexplored. In fact, we
    have higher resolution maps of the entire surface of Mars than
    we do of the ocean floor. I am concerned about the lack of
    leadership and direction on ocean policy.
        Recent reports from the Pew Oceans Commission and the U.S.
    Commission on Ocean Policy indicate that we are not doing
    enough to manage and preserve our ocean resources. As a Senator
    from a coastal State whose economy is strongly linked to our
    commercial ports, the fishing industry, and tourism, I am
    concerned about the health of our oceans, our fisheries, and
    the future of marine research.
        I would like to commend the Department for their efforts
    surrounding the recent hurricanes. Particularly, I would like
    to thank the men and women of the National Weather Service
    (NWS) and the NOAA corps.
        In an upcoming hearing, we will talk with Admiral
    Lautenbacher and Max Mayfield in more detail about hurricane
    preparedness and response. But I wanted you, Mr. Secretary, to
    know how much the entire gulf coast appreciates your
    Department's efforts. They have been on time in their
    predictions and accurate.
        We look forward to your testimony today. Your written
    testimony will be made part of the hearing record, and I hope
    you summarize whatever you care to.
        Secretary Gutierrez. Thank you.
        Senator Shelby. Senator Mikulski.

                    STATEMENT OF SENATOR BARBARA A. MIKULSKI

        Senator Mikulski. Thank you very much, Mr. Chairman.
        And I, too, would welcome Secretary Gutierrez for his
    second hearing before the subcommittee. And just want to echo
    your statements in terms of concerns about NOAA and the
    outstanding contribution that it does in oceans and some of the
    others.
        When we think about the Department of Commerce budget, we
    really think about what it needs to keep America competitive
    and what we need to do to be able to innovate. We know that the
    President has outlined an innovation strategy, as well as our
    own colleagues, with the famous report now called ``Gathering
    Storm.''
        But when I think about the Commerce Department, we do think
    about innovation, where there will be new technologies
    developed that will lead to new products. The National
    Institute of Standards and Technology will create jobs and also
    set the standards so that the private sector can create jobs,
    manufacture or develop products or processes that then can go
    around the world.
        Our own Patent and Trademark Office, which is under your
    administration, also is the key first step to protecting an
    inventor's intellectual property.
        So, as we look at this year's budget, I want to look at
    what is it we are going to do to sponsor innovation and also to
    have an innovation-friendly government that protects patents
    and promotes free enterprise and the American know-how around
    the world.
        We have fantastic agencies within the Commerce Department.
    Several are located in Maryland. NOAA is headquartered in
    Silver Spring. And we have talked about how they focus on
    saving lives and saving property through their weather
    declarations, and also the very important role that they play
    in oceans management and fisheries management.
        The National Institute of Standards and Technology is in
    Gaithersburg and, again, sets those standards for reliability,
    security, doing important research, and then our census.
        So, but what we are concerned about, and I will discuss
    this, is the cuts. When we look at NOAA, the National Ocean
    Service is cut by 30 percent. Marine fisheries by 8 percent.
    NOAA research by 8 percent. We are grateful that the NOAA
    satellites are getting an increase because that is the bread
    and butter of forecasts. But we are afraid that we could get
    out of kilter there.
        In terms of NIST, we are very grateful to the fact that the
    President wanted to increase the National Institute of
    Standards and Technology budget, but it seems to be robbing
    Peter to pay Paul, taking out of the advanced technology
    program and manufacturing extension partnership. And we will
    talk about that.
        And last, but not at all least, among the many things we
    could talk about, I and, I know, my colleagues are concerned
    about the backlog of patents and what we can do in partnership
    to make sure that they are standing in line to buy American
    products. They are not standing in line to patent those
    products that are going to keep us a global force.
        So we look forward to your testimony and working with you.
        Senator Shelby. Mr. Secretary, we welcome you again. You
    may proceed as you wish.

                     SUMMARY STATEMENT OF CARLOS GUTIERREZ

        Secretary Gutierrez. Thank you, Mr. Chairman and Senator
    Mikulski.
        If I may, Mr. Chairman, before I get started on my written
    statement, I would like to let you know that all tsunami
    warnings and watches have been cancelled. There was an
    earthquake this morning in Tonga, and we just got word that all
    the warnings and watches have been cancelled.
        So it looks like it wasn't a tsunami in the making. That is
    good news.
        Senator Shelby. Earthquake?
        Secretary Gutierrez. Yes.
        Senator Shelby. Was the magnitude as high as----
        Secretary Gutierrez. Well, they took it from 8.1 to 7.8,
    which is still very high. But----
        Senator Shelby. So you think things are going to be okay?
        Secretary Gutierrez. That is what we are hearing.
        Senator Shelby. What you are hearing.
        Senator Mikulski. Praise the Lord.
        Secretary Gutierrez. I will probably give you the----
        Senator Mikulski. Praise the Lord and our sensors.
        Senator Shelby. That takes care of my first question.
        Secretary Gutierrez. Again, Mr. Chairman and Senator
    Mikulski, I am pleased to present President Bush's fiscal year
    2007 budget request for the Commerce Department. It is a tight
    and targeted budget. It reflects the President's commitment to
    reducing the deficit while maintaining America's economic and
    competitive leadership.
        At the Commerce Department through each of our agencies, we
    promote economic opportunity for the American people. To
    support this vital mission, the President's total budget
    request for our Department is $6.1 billion, and I will briefly
    highlight some of the key components.
        For our NIST laboratories, which, as you rightly mentioned,
    Mr. Chairman, have produced three Nobel Prize winners, we are
    requesting $581 million. This includes an increase of $104
    million for research and development (R&D) in the physical
    sciences to begin to implement the President's 10-year American
    competitiveness initiative (ACI).
        The ACI funding will help advance innovative NIST research.
    It will also be used to start renovation at our NIST campuses.
    The Boulder facility especially is in desperate need of repair.
        For the International Trade Administration, the request is
    $409 million. These funds will support programs to ensure that
    U.S. companies and workers have access to international
    markets, can compete on a level playing field, and have their
    intellectual property rights protected.
        For NOAA, which did an outstanding job in providing
    warnings during the busiest hurricane season on record, the
    request is $3.7 billion. This includes $19.7 million to support
    robust fisheries in the Gulf of Mexico and part of the
    administration's rebuilding effort in the gulf region.
        The budget proposal for the Economic Development
    Administration is $327 million, including $297 million for
    grants to economically distressed areas.
        We are requesting $878 million in discretionary funds for
    the Census Bureau, which is ramping up their 2010 census. In
    order to meet new fiscal priorities, no new funds are requested
    for the Advanced Technology Program.
        We are requesting $46 million for the Hollings
    Manufacturing Extension Partnership (MEP). This will maintain
    an effective network of MEP centers around the country.
        To ensure the security, health, and safety of our
    employees, we are requesting $5.9 million to begin installation
    of blast mitigation windows and $18 million to correct basic
    code deficiencies and modernize the 73-year-old Hoover
    Building.
        Mr. Chairman, we want to thank you and the subcommittee for
    your support of Commerce programs. We look forward to working
    with you to provide the best and most efficient services to the
    American people.

                               PREPARED STATEMENT

        And I welcome, as always, your comments and questions and
    would like to submit my written testimony for the record.
        Senator Shelby. Your written testimony will be made part of
    the record in its entirety, Mr. Secretary.
        Secretary Gutierrez. Thank you.
        [The statement follows:]

                     Prepared Statement of Carlos Gutierrez

        Mr. Chairman and Members of the Subcommittee, I am pleased to
    appear before you today to present the President's Budget request for
    economic, scientific, technological, and environmental programs of the
    Department of Commerce. Our request of $6.1 billion in discretionary
    funds reflects both the Administration's commitment to promote and
    sustain economic growth and opportunity, and the need to restrain
    discretionary Federal spending. Enactment of this budget will enable
    the Department to effectively support its diverse mission, including
    programs that promote strong and equitable trade relationships; improve
    our scientific and technological capabilities; protect intellectual
    property rights; upgrade our capabilities for weather observations and
    forecasting; and, ensure the long-term economic and ecological
    sustainability of our natural resources.
        I would like to highlight some of the work our bureaus have planned
    in the fiscal year 2007 President's Budget. Each bureau within the
    Department supports one of three strategic goals; I will address each
    bureau within its relevant goal.

    Foster science and technological leadership by protecting intellectual
            property, enhancing technical standards, and advancing
            measurement science.
        The National Institute of Standards and Technology is a high-
    leverage Federal research agency that performs high-impact basic
    research and contributes to the development of economically significant
    innovations in areas such as new materials and processes, electronics,
    information technology and advanced computing processes, advanced
    manufacturing integration, biotechnology, nanotechnology, and new
    energy sources such as hydrogen. In his State of the Union Address,
    President Bush announced the American Competitiveness Initiative (ACI),
    which provides an agenda for maintaining our leadership in intellectual
    and human capital, two areas that significantly contribute to our
    nation's innovation capacity. A centerpiece of the ACI is the
    President's strong commitment to double investment over ten years in
    the key Federal agencies that support basic research in the physical
    sciences--the National Science Foundation, the Department of Energy's
    Office of Science, and the Department of Commerce's National Institute
    of Standards and Technology (NIST). The President's fiscal year 2007
    Budget requests $581 million for NIST. To start implementation of the
    ACI, the request includes an increase of $104 million for NIST core
    activities (laboratory programs and facilities, less congressionally-
    directed projects).
        NIST accomplishments in high-impact basic research are evidenced by
    the three Nobel Prizes that have been awarded to its scientists in the
    last decade. NIST research has led to innovations that we can see
    today, from the high-density magnetic storage technology that makes
    devices such as computer hard drives and mp3 players so compact, to
    protective body armor for law enforcement officers and diagnostic
    screening for cancer patients.
        NIST also plays a critical role in developing standards that are
    used by the private and public sectors. In fiscal year 2007, NIST will
    seek to focus 3,900 scientists and engineers from government, industry,
    and universities--an increase of 600 researchers over fiscal year
    2006--on meeting the Nation's most urgent measurement science and
    standards needs to speed innovation and improve U.S. competitiveness.
        Also in the NIST budget, the President is requesting $46.3 million
    to fund the Hollings Manufacturing Extension Partnership (MEP) program.
    This is a reduction from the fiscal year 2006 enacted level that would
    be made in order to address the Nation's most pressing funding needs in
    this austere fiscal environment. NIST will focus the fiscal year 2007
    MEP funding to maintain an effective network of centers with an
    emphasis on activities that promote innovation and competitiveness in
    small manufacturers.
        No fiscal year 2007 funds, however, are requested for the Advanced
    Technology Program (ATP). The fiscal year 2006 appropriations for ATP
    and estimated recoveries will be sufficient to meet all existing
    obligations and to phase out the program.
        The Technology Administration (TA), which includes the National
    Institute of Standards and Technology (NIST) and the National Technical
    Information Service (NTIS), seeks to maximize technology's contribution
    to economic growth, high-wage job creation, and the social well-being
    of the United States. In fiscal year 2007, the key administrative and
    policy operations within the Office of the Under Secretary will be
    streamlined. TA will remain an effective advocate for technology within
    the Department of Commerce. TA, for instance, was the lead office at
    the Commerce Department responsible for working on the recent
    competitiveness summit hosted at the Department.
        The U.S. Patent and Trademark Office (PTO) promotes the research,
    development, and application of new technologies by protecting
    inventors' rights to their intellectual property through the issuance
    of patents. The PTO also enables businesses and consumers to clearly
    identify specific products through the issuance of trademarks. In the
    United States, intellectual property-intensive industries--the
    biotechnology and information technology sectors, for example--account
    for over half of all U.S. exports, represent 40 percent of our economic
    growth, and employ 18 million Americans whose wages are 40 percent
    higher than the U.S. average. PTO has launched a vigorous reform effort
    aimed at enabling the Office to examine patent and trademark
    applications in a more timely manner, without compromising quality. The
    President's fiscal year 2007 Budget request of $1.84 billion in
    spending authority for the PTO includes increases for both patent and
    trademark processes. By hiring additional examiners, refining the
    electronic patent application filing and processing system, improving
    quality assurance programs, and implementing higher standards for
    examiner certification and recertification now, the PTO will
    significantly reduce application processing time and increase the
    quality of its products and services in the out-years. Consistent with
    recent years, the Department proposes to fund the PTO budget
    exclusively through offsetting fee collections.
        The National Telecommunications and Information Agency (NTIA)
    develops telecommunications and information policy, manages the Federal
    radio spectrum, and performs telecommunications research, engineering,
    and planning. The Department's request for NTIA supports its core
    activities and eliminates all new funding for Public Telecommunications
    Facilities, Planning & Construction, as funds for those activities are
    available from other sources.
        The Digital Television Transition and Public Safety Fund, created
    by the Deficit Reduction Act of 2005, funds a number of programs with
    the auction proceeds of electromagnetic spectrum recovered from
    discontinued analog television signals. Programs supported by this Fund
    in fiscal year 2007 will provide consumers with vouchers to aid in
    their purchase of digital-to-analog television converter boxes, assist
    public safety agencies in acquiring interoperable communications
    systems, and support an interim digital television broadcast system for
    New York City. In 2007, most activity will be related to planning for
    these programs, with actual grant making expected to begin in 2008.

    Observe, protect and manage the earth's resources to promote
            environmental stewardship.
        The 2005 Atlantic hurricane season was the busiest on record and
    extended the current period of increased hurricane activity which began
    in 1995--a trend likely to continue for years to come. This season
    shattered records that have stood for decades--the most named storms,
    most hurricanes, and most category five storms. Arguably, it was the
    most devastating hurricane season the country has experienced in modern
    times. The devastation along the Gulf Coast from Hurricanes Katrina,
    Rita, and Wilma is like nothing I have witnessed before. It is
    catastrophic. Words cannot convey the physical destruction and personal
    suffering in that part of our nation.
        The Department, including the National Oceanic and Atmospheric
    Administration (NOAA), Minority Business Development Agency (MBDA),
    NTIA, and Census, has served a critical role in the repair and recovery
    of the region. I am committed to utilizing the tools and expertise of
    the Department to facilitate the resurgence of the Gulf Coast region. I
    would also like to recognize the efforts of the professionals at NOAA
    for their timely and accurate predictions, which prevented further loss
    of life. Hurricane forecasts for Katrina and Rita were more accurate
    than ever for storm track, size, intensity, surge, and warning lead
    time, allowing for evacuation of 80 percent of New Orleans and 90
    percent of Galveston. This is a key component of NOAA's mission to
    understand and predict changes in the Earth's environment, as well as
    to conserve and manage coastal and marine resources to meet our
    Nation's economic, social, and environmental needs. NOAA continues to
    apply its scientific and technological expertise to a wide range of
    issues that serve to expand our knowledge of the world around us and
    strengthen our economic prosperity.
        Data from NOAA's satellites are essential to public safety and the
    economy. Weather and climate-sensitive industries, both directly and
    indirectly, account for approximately $3 trillion of the U.S. Gross
    Domestic Product. Average annual damage from tornadoes, hurricanes, and
    floods is $11.4 billion. The Geostationary Operational Environmental
    Satellites (GOES) serve as some of the key sentinels that observe
    hurricanes and other severe weather. The President's fiscal year 2007
    Budget request includes an increase of $113 million to continue the
    GOES-R series system acquisition, which will have key enhancements over
    the GOES-N platform.
        In addition to the geostationary satellites, NOAA is also a
    participant in the National Polar-Orbiting Environmental Satellite
    System (NPOESS), which will replace the current Polar-Orbiting
    Environmental Satellite (POES) program. The Department requests an
    increase of $20 million for NOAA's share of this tri-party system (Air
    Force, NOAA, NASA), which will deliver more accurate atmospheric and
    oceanographic data to support medium- to long-range weather forecasts
    and severe storm warnings, further reducing loss of life and property.
        The NPOESS request is based on the funding profile from last year's
    Budget. As you know, the NPOESS program has experienced schedule
    slippage and higher costs than we expected. We are currently
    participating in the Nunn-McCurdy review being conducted by the
    Department of Defense, which will be completed in June. In addition,
    the Government Accountability Office and our Office of Inspector
    General are reviewing the program. We will keep the Committee informed
    of the results of these reviews and our plans going forward, including
    any impact on our fiscal year 2007 request or out-year estimates. Our
    goal will be to ensure the best possible approach for meeting the
    Nation's civilian and military meteorological needs and protecting the
    taxpayer.
        As part of the National Weather Service's overall plan to improve
    the timeliness and accuracy for all weather-related hazards, the
    Department requests $12.4 million to sustain our commitment to the U.S.
    Tsunami Warning System. This funding level will be used to operate and
    maintain the equipment and networks created following the 2004 Indian
    Ocean Tsunami. I wish to thank this Committee for its support of the
    Administration's tsunami warning initiative in the fiscal year 2005
    supplemental and the fiscal year 2006 appropriation.
        Construction will continue in fiscal year 2007 on the NOAA Center
    for Weather and Climate Prediction, which just had its groundbreaking.
    With the requested increase of $11 million, the facility will be ready
    to start operations in 2008. This project is a key component of the
    NWS' effort to improve its weather and climate modeling performance, to
    accelerate the transfer of newly developed scientific information into
    operations, and to improve the use of global environmental satellite
    data.
        NOAA also serves as the lead coordinating agency for the U.S.
    Climate Change Science Program (CCSP), which integrates a broad range
    of climate-related observations, field studies and computer model
    projections sponsored by 13 federal agencies. CCSP has a goal of
    substantially improved understanding of both the causes and the
    potential effects of climate variability and change, on time scales
    extending from weeks to decades. NOAA's mission also includes the
    implementation of climate predictive and interpretive services for a
    wide range of applications, thereby providing significant benefits to
    users in several sectors of the economy.
        Through the National Marine Fisheries Service (NMFS), the
    Department proposes an increase of $19.7 million for activities in the
    Gulf of Mexico. As the Gulf region rebuilds, these programs will ensure
    that adequate science and management resources are available to promote
    and support sustainable and robust fisheries. Also within NMFS, the
    Department requests $6 million for the Open Rivers Initiative (ORI).
    ORI will remove obsolete river barriers in coastal states, thus
    enhancing populations of key NOAA trust species and supporting the
    President's Cooperative Conservation Initiative.

    Provide the information and tools to maximize U.S. competitiveness and
            enable economic growth for American industries, workers, and
            consumers.
        The Economic Development Administration (EDA) supports the federal
    economic development agenda by promoting innovation and competitiveness
    and preparing American regions for growth and success in the worldwide
    economy. The President's fiscal year 2007 Budget expands EDA's Economic
    Development Assistance Programs by $47 million to $297 million and
    streamlines the program to reflect the Administration's emphasis on
    regional development strategies, innovation, and entrepreneurship.
    Regions and communities can achieve significant competitive advantage
    by identifying and then aligning research, educational infrastructure,
    and private activities around fields in which they have unique
    strengths. Four of EDA's programs, representing the majority of EDA's
    funding, will be merged into a new Regional Development Account that
    will administer their competitive grant component, including support
    for University Centers.
        The Economics and Statistics Administration (ESA) promotes the
    understanding of the U.S. economy and its competitive position. ESA's
    Bureau of Economic Analysis (BEA) provides key objective data on the
    Nation's economic condition, including the Gross Domestic Product
    (GDP), in a timely and cost-effective manner. The Department requests
    $80.5 million to maintain the level of funding ESA Headquarters and BEA
    need to efficiently and accurately provide these statistics, as well as
    research and policy analysis, that are critical to public and private
    sector decision-making.
        The Census Bureau serves as the leading source of quality data
    about the Nation's people and economy. The President's fiscal year 2007
    Budget requests $878 million in discretionary funds for the Census
    Bureau, of which the largest component is the 2010 Decennial Census
    Program. The re-engineering of the decennial census has made great
    strides: the annual American Community Survey has been fully
    implemented to replace the once-a-decade long form, the modernization
    of the geographic database of all U.S. counties is over halfway
    complete, and the technological developments for the short-form-only
    decennial census are progressing on schedule.
        In 2007, only three years out from Census Day 2010, the extensive
    planning, testing, and development activities related to the short form
    consume the majority of the decennial budget--a trend that will
    continue through 2010. In addition to continued preparation for the
    2010 Decennial Census, fiscal year 2007 will see increased activity for
    the Economic Census and the Census of Governments, the five-year
    snapshots of our economy that provide critical data.
        The rapid world-wide development and transfer of technology present
    great opportunities and risk to the United States' economic and
    national security. The Bureau of Industry and Security (BIS) regulates
    the export of sensitive goods and technologies, striking a balance
    between those economic opportunities and the security of the United
    States. The President's fiscal year 2007 Budget requests $78.6 million
    to enable BIS to effectively carry out this mission. The proposed
    budget includes a $0.3 million increase for modernization of the Export
    Control Automated Support System, which is the tool used to process
    export licenses.
        The International Trade Administration (ITA) supports U.S.
    commercial interests at home and abroad by strengthening the
    competitiveness of American industries and workers, promoting
    international trade, opening foreign markets to U.S. businesses, and
    ensuring compliance with domestic and international trade laws and
    agreements. ITA conducts domestic and international analyses to ensure
    that the U.S. manufacturing and service sectors can compete effectively
    and meet the demands of global supply chains, and to understand the
    competitive impact of regulatory and economic changes. ITA directly
    supports U.S. businesses via a Trade Information Center that provides
    customers a single point of access to ITA's programs and services. The
    President's fiscal year 2007 Budget requests $409 million for ITA,
    which includes an increase of $2 million to support the President's
    Asia-Pacific Partnership on Clean Development and Climate. This
    partnership will accelerate the development and deployment of clean
    technologies among partner countries. Commerce's role will be to
    promote the use of American products and technologies in Australia,
    China, India, Japan, and South Korea by providing U.S. firms with
    market research on those countries and coordinating trade missions to
    those countries.
        The Minority Business Development Agency (MBDA) focuses on
    accelerating the competitiveness and growth of minority-owned
    businesses by helping to close the gaps in economic opportunities and
    capital access. The President's fiscal year 2007 Budget requests $29.6
    million to enable MBDA to continue pursuing additional avenues to
    leverage resources and expand the availability of services to minority
    business enterprises.

    Achieve organizational and management excellence.
        The Department's headquarters building, the Herbert C. Hoover
    Building (HCHB), is in critical need of major renovation and
    modernization. The 73-year-old HCHB is one of the last historic
    buildings in the Federal Triangle to be scheduled for renovation and
    modernization. The Department is requesting $18 million to correct
    basic health and safety code deficiencies, replace failing mechanical,
    electrical, and plumbing systems, and incorporate major security
    upgrades. In addition to the renovation, the Department also requests
    $5.9 million for the installation of blast resistant windows for one-
    third of the HCHB.
        Departmental Management (DM), in addition to funding the Offices of
    the Secretary and the Deputy Secretary, develops and implements policy,
    administers internal operations, and serves as the primary liaison to
    other executive branch agencies, Congress, and private sector entities.
    The Office of the Inspector General (OIG) is charged with promoting
    economy and efficiency, and detecting and preventing fraud, waste, and
    abuse. The President's fiscal year 2007 Budget request continues to
    support these objectives.
    Conclusion
        The President has submitted a budget that implements the
    Department's mission in a manner that maximizes benefits to our public.
    The Department of Commerce is home to a diverse collection of agencies,
    each with a unique area of expertise and a wide array of needs, tied
    together in a common commitment to ensure an environment exists that
    allows us to lead the world in competitiveness and innovation. The
    President's fiscal year 2007 Budget successfully addresses those needs
    in an efficient manner, mindful of the fiscal restraint required to
    sustain our economic prosperity. I look forward to working with the
    Committee to ensure that together we are providing the best services to
    the American people.

                          HURRICANE SUPPLEMENTAL FUNDS

        Senator Shelby. Mr. Secretary, I have a number of questions
    and I will go through them one by one.
        In December, Mr. Secretary, the President signed the third
    supplemental bill into law. In mid-March, our subcommittee was
    informed that $55 million in supplemental funds that were
    appropriated for NOAA had not yet been distributed to the
    intended recipients. This is May now.
        The Senate soon will pass another supplemental bill
    providing additional funds necessary for ongoing activities in
    relation to the war in Iraq and the recovery from Hurricane
    Katrina and other hurricanes in the 2005 season, which proposes
    additional funds for NOAA.
        Mr. Secretary, have all the December supplemental funds
    been distributed by NOAA as of now, and if not, why not?
        Secretary Gutierrez. Mr. Chairman, my understanding is they
    have been distributed to all of the line offices.
        Senator Shelby. Okay. How will the Department handle the
    distribution of additional supplemental funds?
        Secretary Gutierrez. We will ensure, given the dimension of
    this, that we do everything to get the money out there as soon
    as possible.
        Senator Shelby. Where it is needed?
        Secretary Gutierrez. Yes, sir.
        Senator Shelby. Okay. Could you provide the subcommittee
    with a timeline of events for getting supplemental funds to the
    intended recipients? You can do that for the record, if you
    want.
        Secretary Gutierrez. Yes, sir. If I may?
        Senator Shelby. You can do that.
        [The information follows:]

       Timeline of Events for Getting Supplemental Funds to the Intended
                                   Recipients

        Public Law Signed--December 30, 2005
        Apportionment Submitted to Department of Commerce--January
    21, 2006
        Apportionment Submitted to OMB--February 01, 2006
        OMB Approval of Apportionment--February 09, 2006
        Signed Apportionment received in NOAA--February 10, 2006
        Final transfer to NOAA Line Offices--February 15, 2006

                      ECONOMIC DEVELOPMENT ADMINISTRATION

        Senator Shelby. While the subcommittee is pleased that the
    2007 budget request proposes an overall increase of more than
    $46 million for the economic development assistance programs, I
    remain concerned that the proposal favors the creation of a new
    regional development account while zeroing out four other
    accounts--public works, technical assistance, research and
    evaluation, and economic adjustment.
        How would this restructuring of accounts be more beneficial
    to our communities that rely on these grants for economic
    improvement? And should the subcommittee agree to the changes
    in the accounts as proposed in the budget request, what
    assurances, Mr. Secretary, can you provide this subcommittee
    that the restructuring will not lead to gaps in assistance,
    considering there were four of those programs?
        Secretary Gutierrez. Yes, sir, Mr. Chairman. We have tried
    to simplify the procedure in that we had four different types
    of grants, which led to four different types of processes and
    ways of looking at public works versus infrastructure. And we
    believe that there is a common way of looking at these funds.
    Do they create jobs? Do they attract private sector grants? Do
    they improve the community?
        Senator Shelby. Those are good questions.
        Secretary Gutierrez. And so, we simplified the process and
    just have a common way of looking at all grants as opposed to
    four different buckets, which have a lot of overlapping
    criteria.
        Senator Shelby. Will you give us some more detail on this
    for the subcommittee? I think that Senator Mikulski would also
    like that.
        Secretary Gutierrez. Yes, of course.
        [The information follows:]
       Economic Development Administration--Regional Development Account
        The Regional Development Account (RDA) simply consolidates funding
    for EDA's four primary competitive investment (grant) programs into a
    single, more flexible account. This will allow EDA to strengthen its
    long-standing focus on regional economic development investments.

                                 EDA TODAY FISCAL YEAR 2006: MULTIPLE PROGRAM ``SILOS''
    ----------------------------------------------------------------------------------------------------------------
                                           Economic       Research and Tech.      Partnership
       Public Works $158.3 million     Adjustment $44.2     Assistance $8.7     Planning $26.7       TAA for Firms
           (fiscal year 2006)           million (fiscal     million (fiscal     million (fiscal      $12.8 million
                                          year 2006)          year 2006)          year 2006)      (fiscal year 2006)
    ----------------------------------------------------------------------------------------------------------------
    Development and upgrade of        Strategy            Research on         Supports Economic   Supports network
     physical infrastructure in        development,        leading edge        Development         of Trade
     areas of chronic economic         technical           economic            Districts to        Adjustment
     distress.                         assistance, and     development         develop and         Assistance
                                       physical            practices as well   execute regional    Centers to help
                                       infrastructure to   as information      Comprehensive       manufacturers and
                                       respond to sudden   dissemination and   Economic            producers respond
                                       and severe          efforts to          Development         to the world-wide
                                       economic distress.  provide targeted    Strategies (CEDS).  marketplace.
                                                           technical
                                                           assistance
                                                           including
                                                           University
                                                           Centers.
    ----------------------------------------------------------------------------------------------------------------

       EDA PROPOSED FISCAL YEAR 2007: CONSOLIDATION OF PRIMARY INVESTMENT
                                    ACCOUNTS
    ------------------------------------------------------------------------
                                          Partnership
      Proposed Regional Development      Planning $27        TAA for Firms
      Account (RDA) $257.6 million      million (fiscal      $12.9 million
           (fiscal year 2007)             year 2007)      (fiscal year 2007)
    ------------------------------------------------------------------------
    Activities as funded under        Supports Economic   Supports network
     current Public Works, Economic    Development         of Trade
     Adjustment, Research and          Districts to        Adjustment
     Technical Assistance programs,    develop and         Assistance
     for both chronic and sudden and   execute regional    Centers to help
     severe economic distress:         Comprehensive       U.S.
                                       Economic            manufacturers
                                       Development         respond to the
                                       Strategies (CEDS).  world-wide
                                                           marketplace.
        Physical infrastructure
         development.
        Strategy development.
        Technical assistance.
        Research and information
         dissemination.
        University Centers.
    ------------------------------------------------------------------------

        The Regional Development Account (RDA) will:
      --Allow investment partners (grantees) to engage simultaneously in
            multiple activities in support of a common initiative through
            just one EDA grant (e.g., infrastructure and technical
            assistance).
      --Provide EDA additional flexibility to respond to sudden and severe
            economic dislocations (e.g., a significant plant closure,
            natural disaster covered by the Stafford Act, or a military
            base closure).
      --Mirror the flexibility of EDA's popular and proven Economic
            Adjustment account.
      --Build on EDA's existing regional development work through Economic
            Development Districts and University Centers.

                      EDA'S FOCUS ON REGIONAL DEVELOPMENT

        Since its inception, EDA has emphasized regional economic
    development approaches. The creation of Economic Development Districts
    (EDDs) (which are primarily multi-county areas charged with supporting
    a coordinated economic development strategy across an economic region)
    simultaneously with EDA's original authorization in 1965 was a
    meaningful force for regional development approaches.
        For fiscal year 2007, EDA will continue its long-standing emphasis
    on regional economic development strategies. EDA will work with
    communities on economic development strategies and implementation that
    support the development plan of an entire economic region. This will
    help ensure that EDA-supported investments are compatible with and can
    better leverage other economic development initiatives in an economic
    region.
        The RDA helps support the principle of regional economic
    development by allowing EDA investment partners (grantees) to engage in
    multiple EDA-supported activities through a single grant. For example,
    an infrastructure grant to a city to help develop an inter-modal
    transportation facility can be coupled with technical assistance
    support to help the city build strategic linkages with neighboring
    cities and counties--in the same grant.
        It is important to note that the RDA:
      --Benefits investment partners (grantees) by allowing multiple EDA
            programs to be executed toward a common goal with just one
            grant--eliminates redundant application and reporting
            requirements.
      --Increases EDA's efficiency by providing a single, flexible program
            account and avoids the accounting and management challenge of
            managing four separate ``buckets'' of funding across the six
            EDA regions.
      --Has no impact on EDA's: investment selection criteria, balance
            between rural and urban investments, or focus on economic
            distress.
      --Utilizes existing EDA legislative authorities.
      --Bolsters the President's request for a $47 million increase in EDA
            program funds (total Economic Development Assistance program
            budget: $297.5 million).

           INTELLECTUAL PROPERTY, EDUCATION, OUTREACH AND ENFORCEMENT

        Senator Shelby. I want to get to the Patent and Trademark
    Office. I am just going down the line because you have a lot of
    jurisdiction.
        The U.S. Patent and Trademark Office has initiated a number
    of programs to assist with the intellectual property
    enforcement, such as the help hotline and the www.stopfakes.gov
    and the Global Intellectual Property Academy and training
    around the globe, which provides curriculum and training for
    foreign government officials in intellectual property rights
    protection and enforcement.
        I know these are only a few examples of the work being done
    to enforce intellectual property rights at home and abroad. Can
    you give us an update, if you would, Mr. Secretary, on the U.S.
    Patent and Trademark Office's intellectual property education
    outreach and enforcement effort? Because this is a real problem
    in the world as we expand our global trade.
        Secretary Gutierrez. Yes, Mr. Chairman.
        We have, as you mentioned, done several outreach efforts to
    small businesses. We have provided free legal services to small
    businesses. We have a hotline. We now have people on the ground
    in China, and we are focused on four countries--Brazil, Russia,
    India, and China--given that this is really where the illicit
    world economy takes place.
        We have a working group with the European Union, which is
    the first time that they have agreed to work with us to have a
    clear message to the rest of the world about Europe and the
    United States. Up until now, we have sort of been in different
    camps. And I think the illicit world would use that to their
    benefit. We are now together. We are talking with one voice,
    and we have an IPR working group.
        We have just agreed with Japan that we are going to do the
    same thing. So now they can't isolate us as well. Japan, the
    European Union, and the United States will continue to speak as
    one voice when it comes to illicit trafficking of intellectual
    property.
        The other thing that I will mention, which we believe is
    very important through the National Intellectual Property Law
    Enforcement Coordination Council (NIPLECC), is enforcement.
    Because, ultimately, it is going to be our ability to enforce
    and our ability to stop some of these factories that are
    producing these products.
        Our prosecutions have grown by 97 percent in 2005.
    Internationally, we have been able to collaborate with other
    countries to seize about $50 million of merchandise. And very
    importantly, at our border, in 2005, we seized $232 million, up
    from $190 million a couple of years earlier.
        So everything indicates that not only are we training
    people, we are providing service for foreign officials, helping
    them understand the philosophy of intellectual property. We are
    working with foreign governments, and we are ensuring that we
    are enforcing IPR and that people know there is a price to pay
    for this.
        I knew you were going to ask about this, Mr. Chairman and
    Senator Mikulski. We have been putting a lot of pressure on
    China, and they came back with their action plan on IPR
    protection 2006. We think the significance of this is that this
    is a plan developed by them. So it tells us that they should
    have more ownership for it, that they should want to make it a
    success because it was their idea.
        And I thought you would be interested. This is one of the
    areas, one of the things that they agreed to here is to require
    that all PCs have pre-installed software.
        Senator Shelby. But this is a challenge for your
    Department?
        Secretary Gutierrez. Yes, Mr. Chairman. And we are going to
    follow up on that and ensure that it is not just on paper, but
    that they are executing. And I look forward to updating you in
    the future on any progress.

       NATIONAL POLAR-ORBITING OPERATIONAL ENVIRONMENTAL SATELLITE SYSTEM

        Senator Shelby. Absolutely. The National Polar-Orbiting
    Operational Environmental Satellite System (NPOESS) program has
    experienced significant schedule delays and cost overruns for
    the 2006 budget, and yet the 2007 budget request includes an
    increase of $20 million for a total request of $337.8 million
    for this program. That is a good bit of money.
        The more than 25 percent cost overruns in this program
    triggered the Nunn-McCurdy process within the Department of
    Defense (DOD). And I understand there is an ongoing
    investigation at DOD that may lead to a total reevaluation of
    the entire program.
        In your opening statement for the record here, you say that
    your Department's goal will be--I quote you--``to ensure the
    best possible approach for meeting the Nation's civilian and
    military meteorological needs and protecting the taxpayer.''
    That is what we want you to do.
        What exactly are the options being considered within NOAA
    in response to the increased costs and schedule delays for
    NPOESS? And for the record, could you tell the subcommittee how
    your Department is addressing additional or potential gaps in
    satellite coverage, given the delays that have already been
    experienced and the possibility of even more delays due to the
    Nunn-McCurdy process?
        Is that too much?
        Secretary Gutierrez. No, Mr. Chairman. It is very good.
        When we heard about the overruns and we had knowledge of
    this, we called in the chief executive officers (CEOs) of both
    Raytheon and Northrop Grumman, which are the two companies that
    are on this and----
        Senator Shelby. You are used to that from your business
    background?
        Secretary Gutierrez. Yes, I was. And we just let them know
    that this is not the way we like to do business. This is not
    something that we like to see, and they are going to do
    everything possible to do what they can to keep the overruns at
    a minimum.
        We know that this triggers the Nunn-McCurdy Act, and we
    will have a better understanding of how much we are talking
    about here in June.
        Senator Shelby. What is the rationalization for the
    overruns? Do you know offhand?
        Secretary Gutierrez. Their basic argument was that they
    believe that the initial estimate was too low.
        Senator Shelby. Okay.
        Secretary Gutierrez. But it is an overrun, and for us, that
    is the bottom line. And as a result, we thought it was
    appropriate to call them in and let them know that we are
    disappointed.
        So we are working very closely with them. And I am going to
    have another meeting with them. Deputy Secretary Sampson has
    met with them again. He is going to go out and visit their
    factories. So----
        Senator Shelby. See what is----
        Secretary Gutierrez. Yes. We are not going to let up on
    them.
        Senator Shelby. Well, your business background could
    certainly come in handy, Mr. Secretary, here.
        Secretary Gutierrez. I am not used to these overruns.
        Senator Shelby. Don't get used to them.
        Secretary Gutierrez. I used to have to go to my board for a
    10 percent overrun, and it would be a very tough week every
    time I did that. So we want to make it tough on them.
        Senator Shelby. I have more questions, but I am going to
    rest and let Senator Mikulski be recognized for questions.

                NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

        Senator Mikulski. Well, thank you, Mr. Chairman. ``Rest''
    isn't usually part of your vocabulary.
        First of all, I am very pleased at the exchange between you
    and Senator Shelby on the NOAA satellite issue. This is a
    source of great concern. We need to have the most modern
    satellites, and they are the key to our weather prediction. But
    if we get into the overruns, well, you know the consequences.
        In looking at the NOAA budget, I was puzzled by what seems
    like a 6 percent cut in NOAA, but really, it is
    disproportionate. The 30 percent cut in ocean services, 8
    percent in marine fisheries, and 8 percent in NOAA research.
        Could you share with us the rationale of cutting 30 percent
    in oceans, particularly after the rather firm reports that came
    from the Joint Ocean Commission and the Pew Foundation, as well
    as marine fisheries and NOAA research, which, of course, is so
    important to climatic change and others?
        Could you tell us the rationale, and what are the
    consequences of these cuts? Will there be layoffs? Do they
    agree, sir? What is the deal?
        Secretary Gutierrez. Senator, we believe that we can carry
    on the mission and many of the initiatives that we have
    started. Of our $3.7 billion budget, about $1.8 billion is
    related to oceans and fisheries. So a big bulk of NOAA is
    really oceans and fisheries.
        And we have a lot of activities going. We just submitted
    for reauthorization our Organic Act. We submitted the Magnuson-
    Stevens Act for reauthorization, as well as the Marine Mammal
    Protection Act. We have the Proposed National Offshore
    Aquaculture Act. We have extramural grants in place for
    research. We have four different scholarship programs.
        So while we are working within a tight budget, we believe
    that we have our focus on the right things, and we have got
    plenty going to be very active throughout 2007.
        Senator Mikulski. But a 30 percent cut in National Ocean
    Service is a big cut. That is not at the margin. What will be
    the consequences?
        Secretary Gutierrez. I believe, if we were to go back and
    look at it, that some of the difference you cite would be
    versus the fiscal year 2006 enacted budget. So we are, rightly
    or wrongly, comparing the President's budget requested amount
    to the base budget. So they may have been these one-time
    projects for fisheries.
        But our big projects, and especially coming off the ocean
    policy, our big projects, our big commitments are being funded,
    and we are not looking at the major layoffs or anything that
    would be distracting and that would take us off our fundamental
    mission and the big projects that we have going.
        Magnuson-Stevens, aquaculture, marine mammals, our
    scholarships--those are funded and very well----
        Senator Mikulski. Sea grants----
        Secretary Gutierrez. Sea grants, yes.
        Senator Mikulski. Well, Mr. Secretary, a little bipartisan
    group--Senator Dodd and myself, Senator Sununu, Senator Gregg--
    went to both Admiral Watkins and Leon Panetta and asked them to
    do a report for us on their reports, if you will--like
    Alexander and Bingaman went to the national academies--and said
    give us the 10 ideas now to really make sure that we save our
    oceans or enhance our oceans.
        They are going to, Mr. Chairman, have this report ready
    sometime this summer, and which I would like to share. But
    then, you know, because there is endless reports. There is
    endless five points this and three-point programs for that. And
    I agree with you that we need to have at least a core basic set
    of programs we are going to support, and then at the end of the
    year or the end of a 3- to 5-year period we can honestly say
    what we have accomplished.
        And I know from, again, private sector background, you are
    a benchmark guy. And I think we would like to share the same,
    which is to say what are some of our national goals in terms of
    these and then really make a commitment on a bipartisan basis
    to work on these.
        Secretary Gutierrez. That would be great.

                            NATIONAL WEATHER SERVICE

        Senator Mikulski. So we are going to keep you posted on it.
        In terms of NOAA weather, we know that the budget includes
    a $3 million increase for the National Weather Service, which
    we think is important and much needed. But we are concerned
    that some smaller programs were eliminated like the Susquehanna
    basin, which essentially goes from New York down through
    Maryland and are the sensors along those rivers that kind of
    give the river almost like a ``river watch.''
        Well, it is. It is the Susquehanna River watch that alerts
    communities to flooding. A couple of years ago, when we had the
    big snow and the big meltdown, the Susquehanna alerts really
    saved a great deal of lives in Maryland because we had the
    early warning.
        It is one of those earmarks that everybody gets cranky
    about. But we want to be sure that when we are looking at
    weather, we are looking at the big picture on this. And I am
    going to alert you to some of these.
        But we are concerned that there is now a move to privatize
    the National Weather Service in the National Weather Service
    Duties Act. Are you familiar with that?
        Secretary Gutierrez. I have heard, just not officially, not
    formally. But I have been made aware.
        Senator Mikulski. Does the administration have a position
    on that bill yet?
        Secretary Gutierrez. I don't believe there has been a
    statement of administration policy (SAP) issued for that. As I
    think about it, the National Weather Service is a public
    service. Everyone has access to it. So I haven't thought much
    about it as a private service.

                            PATENT EXAMINERS HIRING

        Senator Mikulski. Well, we just want to alert you to that.
    I, too, think that the National Weather Service is a public
    service that should be in the public domain and operated as
    such. And the old saying is, ``If it ain't broke, don't fix
    it?''
        We know very few that the private sector value-adds to the
    National Weather Service and even develops either niche
    products or something like that for which we are appreciative.
        Let me go to the patents. Five hundred thousand backlog,
    and we know we have increased the new hires. Is that correct?
        Secretary Gutierrez. Yes.
        Senator Mikulski. One thousand new examiners?
        Secretary Gutierrez. Yes.
        Senator Mikulski. And we also know that there were fees
    charged for that. But isn't the fee authority going to expire?
    Not for the overall collection of the patents.
        The patent, PTO is funded through, is paid by inventors.
    The authority to get current fee levels were expired. I think
    we raised fee levels. Am I correct in that?
        Secretary Gutierrez. Yes.
        Senator Mikulski. So that we could add more people. I think
    it is going to expire this year.
        Secretary Gutierrez. I think it is renewed----
        Senator Mikulski. Can you kind of tell us where you are
    with this?
        Secretary Gutierrez. My understanding is that----
        Senator Mikulski. And whether we need to continue to hire
    and use this as a tool or mechanism?
        Secretary Gutierrez. It is an annual renewal in the
    appropriations bill. So we get a 1-year extension, essentially,
    every year. We collected about $1.5 billion of fees. So this
    is----
        Senator Mikulski. B? Like in ``Barb?''
        Secretary Gutierrez. Yes. I hope that is right.
        Senator Mikulski. Yes, that sounds about right.
        Senator Shelby. That is a lot of money.
        Secretary Gutierrez. And we have 4,000 examiners. We are
    hiring 1,000 over the next 5 years. And unfortunately, you are
    right. The pendency is growing from about 29 months to 32
    months. So it is not going in the direction we want.
        We are hiring more examiners. We are trying to make the
    process a lot smoother at the beginning, trying to avoid
    patents that we don't need to put through the process, getting
    more quality in the beginning.
        We have a conflict here between the quality of the patent
    and the pendency. So we want to lower pendency, but not at the
    expense of quality, especially technology.
        Senator Mikulski. We don't want to have other BlackBerry
    cases and so on.
        Secretary Gutierrez. Exactly. So technology folks are very
    concerned about the quality aspect. Everyone is concerned about
    the quality aspect.
        So we are working on that. We are hiring more people. We
    have just gone online for the first time. We have what we think
    is the most efficient patent application system, where people
    can apply online.
        Senator Mikulski. They couldn't do that before?
        Secretary Gutierrez. Not to the extent that they can today.
    And we launched just about 1 month ago. That should help our
    pendency. We have monthly reports on productivity, monthly
    reports on production. People are rewarded for that. They are
    measured on that. These metrics are cascaded throughout the PTO
    offices.
        So, more and more, it is being managed by the numbers and
    quality of the patents. We agree with your challenge that as we
    improve quality, we also have to take down pendency. We just
    can't afford to have our pendency continue to increase.
        Senator Mikulski. See, this is part of the innovation-
    friendly government. And people in Maryland who are inventors
    and then someone in the bio fields, which is another dynamic,
    is they have to stand in two lines. One to get their patent,
    the other to get their FDA approval. So that, in and of itself,
    is time.
        What they have shared with me is that, say, if they are
    waiting for their patent, some of their intellectual property
    has already been stolen. And so, that is an issue. It is a big
    issue.
        Do you feel that the 1,000 examiners that you hired will be
    enough, or do you think you need to have more?
        Secretary Gutierrez. We believe that, for now, it should be
    enough. But if we see that it isn't, we will be coming back to
    you.

                 PATENT EXAMINERS QUALIFICATIONS AND RETENTION

        Senator Mikulski. Well, what are the tools then for
    retention? First of all, share, as you did with me, with
    Senator Shelby what are the basic qualifications to be a patent
    examiner?
        Secretary Gutierrez. We have actually gone back and looked
    at this. We hire mostly engineers and lawyers. About 19 percent
    of the engineers we hire also have a law degree.
        Senator Mikulski. See, so this is a big bucket of talent
    here?
        Secretary Gutierrez. Oh, this is----
        Senator Shelby. Important talent.
        Secretary Gutierrez. Yes, very important. And we actually
    retain people for about 6\1/2\ years. So they come, an average
    of tenure with PTO is about 6\1/2\ years. So they know they are
    getting the best training you can get, working with very smart
    people. They are at the leading edge of seeing what
    technologies are happening and who is innovating.
        If they don't have a law degree, we provide them with
    financial help to get a law degree. We give them training to
    help them manage people. We are constantly trying to upgrade
    their skills. So it is a way of keeping them there.
        Our starting salaries average about $56,000. And that
    ranges anywhere from $35,000 to $70,000, depending on their
    GPA, depending on their skills. That is about 10 percent below
    the private sector.
        So we know that we have to fill that gap with other ways--
    --
        Senator Mikulski. You mean for a young associate in a law
    firm----
        Secretary Gutierrez. For a young associate coming in, that
    is right.
        Senator Mikulski. That would be focused on intellectual
    property?
        Secretary Gutierrez. About 10 percent. They make about 10
    percent more in the private sector.
        So we have to fill that 10 percent through other ways--by
    training, by giving them a great work environment, by giving
    them a sense that they are in the right place at the right
    time.
        Senator Shelby. Well, that is very important.
        Secretary Gutierrez. And we pay them for performance, a 10
    percent bonus. We would like to see that go up to about 17----
        Senator Shelby. For good people?
        Secretary Gutierrez. That is right, for the people who are
    performing.
        Senator Mikulski. Six and a half, are you satisfied with
    that, or would you hope that they would stay longer? And don't
    you need a career service to be able to mentor----
        Secretary Gutierrez. Yes. That is right.
        Senator Mikulski [continuing]. These talented, young,
    bright people? Or mid-career people that are changing? There
    might have been somebody who is a whiz in electrical
    engineering, maybe one of our leading defense contractors gets
    their law degree and wants to move over and do something like
    this?
        Secretary Gutierrez. I agree. The 6\1/2\ years is higher
    than I would have expected. I would like to see more. And I
    think it is a good----
        Senator Shelby. Six and a half years is average, right?
        Secretary Gutierrez. Yes, that is the average tenure.
        Senator Shelby. So some stay a long time.
        Secretary Gutierrez. Some stay longer. Some leave,
    unfortunately, sooner. But we would like to see more.
        Continuity is always a good thing, and things are changing
    so quickly. Yes, we have gone from 300,000 patents several
    years ago to about 412,000 patent applications.
        Senator Mikulski. That is a lot of ideas.
        Secretary Gutierrez. So people are innovating. There is
    more innovation. The applications are getting more complex. So
    it requires better skill sets to just understand the
    technology.
        Senator Mikulski. So what can we do to retain now? We have
    got these 1,000 people. And of that 1,000, we would want, you
    know, as you would say, staying longer for the public
    investment we are about to make in their training.
        Secretary Gutierrez. Right.
        Senator Mikulski. What do you see as the key retention
    tools, and are there ways that we could be helpful to you?
        Secretary Gutierrez. I think we have to continue to make it
    a great working environment, where they feel like they are
    learning. If they want to go on to get their law degree, we
    will help them do that financially.
        They are constantly getting seminars to upgrade their
    skills, whether it be people management if they are engineers,
    getting legal seminars if they are lawyers. Getting engineering
    seminars, marketing seminars that they really become experts at
    what they do.
        And I would like to do everything possible from the
    standpoint of the working environment. And if we need to, to
    come back and look at the bonuses.
        We have a 10 percent performance bonus. To keep up with the
    private sector, we may have to take that up higher. And I would
    like just a little bit more time to go back and see where the
    discussions are in order to talk about it with the union and
    then come back to you on that.
        Senator Mikulski. Well, this issue of adequacy of personnel
    and recruitment and retention is, I believe, a real high
    priority. Our colleagues in the Judiciary Committee create them
    all, but your idea of the working environment, I would like to
    just bring to your attention, one, the GAO report that was
    commissioned last June for Congressman Sensenbrenner and
    Congressman Wolf, our counterpart----
        Secretary Gutierrez. Right.
        Senator Mikulski [continuing]. On progress made in hiring,
    the challenges to return. And one of their number one issues
    that they raise, Mr. Secretary, is communication. And they
    state that there seems to be a culture of poor to uneven
    communication between management and the examiners. And they
    cite that as really affecting morale, productivity, and
    retention.
        We bring this report to your attention, and we think it is
    a very good guidepost for us to follow. And when I read it, I
    saw that, yes, money, recruitment, and so on is there. And then
    the employee organizations also had their newsletter, and
    replete through the newsletter is the need for more
    communication between management and the examiners.
        So I am going to bring these to your attention and know
    that this is a lot of hard work going into it. The other side
    of the Capitol is also interested in this, and I think it
    really focuses on the human capital, Mr. Chairman.
        Senator Shelby. Very much so.
        Senator Mikulski. And my questions in the future and, even
    more importantly, this year will be how are we doing on this
    report and implementing it, and whether you think maybe the
    report was off the mark, nevertheless?
        Because as I travel my State and talk to those Nobel Prize
    winners, not only in this and other places, they say that one
    of the most important tools to an innovation-friendly
    government, in addition to the pipeline issue of talented
    people, is the Patent Office. Everybody talks about the Patent
    Office. So we let it at that.
        My last question in this round--the chairman wants to go
    another--is NIST. Isn't that a spectacular agency? That is
    where those three Nobel Prize winners are. But I am concerned
    that as we cut ATP and shrink the manufacturing extension
    partnership and so on, that is why I said are we robbing Peter
    to pay Paul here?
        Secretary Gutierrez. If I may just step back a little,
    Senator, on this?

      ADVANCED TECHNOLOGY PROGRAM AND MANUFACTURING EXTENSION PARTNERSHIP

        Senator Mikulski. Because we eliminate the ATP----
        Secretary Gutierrez. Yes.
        Senator Mikulski. And we shrink the manufacturing
    extension, the legacy of our colleague, Senator Hollings. So--
    --
        Secretary Gutierrez. The President mentioned this in the
    State of the Union that NIST is one of the three agencies that
    is getting an increase in funding because NIST does basic
    research. We have an iPod today, thanks to what NIST did many
    years ago. We have many of our security systems on automobiles
    came out of research that NIST has done.
        So what they do is basic research for technologies that
    will be applied across many industries. And we think that is
    the role of the Federal Government. Long-term basic research,
    10, 15 years down the road, the types of projects that private
    sector typically does not have the patience for or the money,
    the competitive environment. They typically do product
    development, a lot shorter period of time.
        Senator Mikulski. They value-add to our basic research.
        Secretary Gutierrez. Exactly. So one-third of the country's
    R&D is Federal Government. Two-thirds is private sector. That
    one-third, we would like to keep it on basic research and let
    the private sector use what we produce to develop products.
        ATP was almost like a venture capital fund. It was trying
    to pick winning companies, and we felt that the role of the
    public sector wasn't necessarily picking winners or losers, but
    providing technologies.
        MEP, we are keeping at a smaller rate because that also
    tends to be product development, operational. It does demand
    for us to pick who gets the money and who doesn't. But we have
    a network in place that we don't want to let go of because it
    can still be used.
        But to the extent that we can, we would like to stay on
    basic research, things that only we can do. We now have 1,800
    guest scientists and engineers at NIST, who are there trying to
    pick up any experiences, any learning to take back to be able
    to use.
        And as we look around the world, there isn't another
    country--we asked the European Union the other day, how do you
    do it? Do you have your NIST? Do you have a private sector
    linkage? They don't.
        I think we have an advantage in the linkage between our
    basic research agencies, such as NIST, Department of Energy,
    the National Science Foundation (NSF), our private sector
    companies, and our universities. And we are seeing more and
    more of that partnership taking place.
        That is why we have shifted money to basic research from
    what we would call picking winners and losers and----
        Senator Mikulski. What about the manufacturing extension
    partnership?
        Secretary Gutierrez. The $46 million that we put in the
    budget is to keep the network in place. That is about one-third
    of the funding because State governments and private sector
    usually put in another third and one-third is from fees.
        But the important thing is the network will be there, and
    the private sector can access the network. The funding will not
    necessarily come from the Federal Government as much as it did
    before, but it will still be there. The network will still be
    there, and the funding, to some extent, will be there.
        But most of our money is going into basic research that
    will give us a country-wide competitive advantage against the
    rest of the world. Nanotechnology, quantum research,
    biometrics--the types of things that the private sector just
    doesn't have the time or the patience or the competitive
    environment to be able to do.
        Senator Mikulski. Thank you, Mr. Chairman.

                            OCEAN-RELATED ACTIVITIES

        Senator Shelby. Thank you, Senator Mikulski.
        I have a few more questions. In what way does the 2007
    budget request provide sufficient funding to address NOAA's
    ocean-related activities and responsibilities with respect to
    the Joint Ocean Commission's report?
        Secretary Gutierrez. No, that is great. Thank you.
        Out of NOAA's $3.7 billion request we allocated about 50
    percent to oceans and fisheries. We are working on many of the
    Ocean Policy Commission's recommendations. We have resubmitted
    for reauthorization the Organic Act for NOAA, the Magnuson-
    Stevens Act Reauthorization, and the Marine Mammal Protection
    Act Reauthorization.
        We are now hoping to work with Congress to get
    authorization for offshore aquaculture, which is also very
    important----
        Senator Shelby. That is a whole lot of promise there.
        Secretary Gutierrez. We actually are a net importer of
    fish.
        Senator Shelby. I know.
        Senator Mikulski. And growing.
        Secretary Gutierrez. Some of the fish we import is farmed
    fish. So we think we should be doing a lot more.
        Senator Mikulski. And some of it is a little----
        Secretary Gutierrez. Yes, well. So it is an area of
    opportunity for us. So we believe that we have the right
    priorities and the big projects that we need to continue funded
    in the area of oceans, Mr. Chairman.
        Senator Shelby. And we have got the coast and the bays,
    too.
        Secretary Gutierrez. Yes.
        Senator Shelby. Mr. Secretary, what progress are you making
    in addressing some of the recommendations put forward by the
    Joint Ocean Commission, like the report card's low marks for
    international leadership, research, science, and education? I
    know you weren't there all this time.
        Secretary Gutierrez. We just had our Asia-Pacific economic
    cooperation (APEC) forum's marine resource conservation working
    group meeting, which includes other agencies, but NOAA is a big
    part of it. We are leading the whole effort toward tsunami
    detection with the rest of the world. It goes beyond oceans.
        So I believe that we and our people are constantly taking a
    leadership role in coordination meetings and seminars. The rest
    of the world looks to us for oceans leadership, technology,
    knowledge. Of the 50 recommendations within the
    administration's ocean action plan where NOAA is the lead or a
    partner, we have implemented 37 to date. So we are very focused
    on it.

                            DEPARTMENTAL MANAGEMENT

        Senator Shelby. The 2007 budget request includes $18
    million for the renovation and modernization of the Herbert C.
    Hoover Building, headquarters to the Department of Commerce.
        The subcommittee notes the funding was requested in 2006,
    but not appropriated. What would the level of funding here
    provide for you, and how many years of follow-on funding would
    be needed to complete the renovation?
        Secretary Gutierrez. Yes. And this is the last one, Mr.
    Chairman, of the Federal Triangle Historic buildings that has
    not been renovated.
        Senator Shelby. Well, they have got to be renovated.
        Secretary Gutierrez. The plan actually takes us out to
    2017. So we are spreading it out so that we don't have the
    burden of a big cost in 1 year.
        Senator Shelby. It is still a lot of money, though.
        Secretary Gutierrez. Yes, it is about $700 million total,
    of which about $200 million will be picked up by Commerce.
        Senator Shelby. It would cost a lot of money--we wouldn't
    want you to move. But if you built a new building somewhere, it
    would cost a lot of money, too.
        Secretary Gutierrez. That is absolutely right. And it is--
    --
        Senator Shelby. Plus, you would lose the history.
        Secretary Gutierrez. That is absolutely right. So we have
    $18 million, which gets us going, and we have it spread out to
    2017.

                 NATIONAL INSTITUTE OF STANDARDS AND TECHNOLOGY

        Senator Shelby. The President announced the American
    competitive initiative as a new program that would continue to
    build the Nation's science and technology base. Senator
    Mikulski has already talked about this.
        This will be done through investments in federally funded
    research and investments to ensure the country has a
    technologically skilled workforce. We have got to do it on our
    own.
        To accomplish this, several agencies were tasked with
    leading this initiative. One of those falls under you, the
    Department of Commerce--the National Institute of Standards and
    Technology.
        What is your basic role with regard to the American
    competitiveness initiative? And how much of your budget and
    time is dedicated to this? We think it is important.
        Secretary Gutierrez. Yes. Yes, Mr. Chairman. I agree. And
    this is one area where we have actually tasked every department
    inside of Commerce to play a role. I think we all play a role
    in helping our country become more competitive.
        Directly, we have the $104 million that we have added to
    NIST for projects, and those are, as I mentioned before,
    nanotechnology, quantum research, biometrics. Things that the
    private sector can take and apply across many industries.
        We are also sort of out of our lane. We are working with
    the private sector to motivate them to get volunteer teachers
    into K through 12. Part of the ACI----
        Senator Shelby. How do we do that? How do you do that?
        Secretary Gutierrez. Well, we go out and talk to companies.
    We were with Intel the other day, in an auditorium of maybe 500
    engineers. We said please go out and be part of the ACI. We
    want----
        Senator Shelby. They could be tremendous role models, can't
    they?
        Secretary Gutierrez. Yes. Because students are not really
    sure where a math or a science career will take them.
        Senator Mikulski. They don't know.
        Senator Shelby. They don't know.
        Senator Mikulski. They don't know what is going on.
        Secretary Gutierrez. So this would be an opportunity to do
    that--working with Congress to make the R&D tax credit
    permanent. We have renewed that, I think, a dozen times over
    the last 10 or 12 years. We believe the private sector needs
    more predictability.
        Senator Shelby. So they can plan.
        Secretary Gutierrez. So that they know if they are starting
    a 5-year project, they will have a tax credit in 5 years. So--
    --
        Senator Shelby. But we have to do that, don't we, Mr.
    Secretary, to compete in the world of tomorrow that we see on
    the horizon?
        Secretary Gutierrez. Absolutely.
        Senator Shelby. In China and India and everywhere else?
        Secretary Gutierrez. Absolutely.
        Senator Shelby. If we don't, we are going to lag behind.
        Secretary Gutierrez. Absolutely. We are competing today.
    Our economy is doing very well in the face of intense
    competition. But it is 5 years from now, 10 years from now, 20
    years from now----
        Senator Shelby. We have got to worry about.
        Secretary Gutierrez. Absolutely.

                      ECONOMIC DEVELOPMENT ADMINISTRATION

        Senator Shelby. In 2007, the budget request for EDA
    salaries and expenses is only $9,000 more than 2006.
        The subcommittee recently approved a reprogramming request
    of $700,000 that we were told was necessary to provide
    sufficient salaries and expenses for the balance of 2006, which
    means the 2007 request is now $691,000 below the 2006 number.
        Given this reprogramming of funds, how can the funding
    level requested for 2007 be sufficient? I know that we are
    appropriators, and you think, well, gosh, why are we asking you
    to ask for more money? But we think you need to have the
    requisite money to do your job here. And can you do that?
        Secretary Gutierrez. Yes, of course, Mr. Chairman.
        Senator Shelby. In other words, what funding level is
    necessary to maintain the current EDA operations in 2007? Can
    you do it like that? And why and how?
        Secretary Gutierrez. Yes, Mr. Chairman. With the current
    budget, we can keep our office network in place.
        Senator Shelby. Okay.
        Secretary Gutierrez. Our salaries and expenses, as a
    percent of the total budget, is about 9 percent, which we think
    is right up there. We wouldn't like to see it go higher because
    then we have got more money tied up in expenses than we would
    like to have. So we think we have the right balance, and we
    think we can make it work.

                            DEPARTMENTAL MANAGEMENT

        Senator Shelby. Going back to the Herbert C. Hoover
    Building, the Commerce Building. You are seeking $5.9 million
    for blast mitigation windows, which you certainly need. Is that
    the total funding level? Or will there be additional funds in
    this area, too?
        Secretary Gutierrez. That is actually additional for the
    windows.
        Senator Shelby. In other words, how many years is that? We
    have been told there is a request of a $5.9 million increase
    for blast mitigation windows.
        Secretary Gutierrez. Yes, yes.
        Senator Shelby. Is that the total level of funding, or will
    there be additional?
        Secretary Gutierrez. It is for blast mitigation windows for
    one-third of the building.
        Senator Shelby. Okay. So that is one-third, and there will
    be additional funding?
        Secretary Gutierrez. Yes, Mr. Chairman. And this came out
    of the ``Window Blast Hazard Mitigation Study'' for the Herbert
    C. Hoover Building issued by the General Services
    Administration in February 2003.

                              BUREAU OF THE CENSUS

        Senator Shelby. Oh, yes. I know you need it. You don't want
    to put your people at risk.
        The Bureau of the Census. The budget request for the 2010
    census is starting to grow, of course, in anticipation of the
    2010 census, which is just a few years away. The increases are
    quite significant while, at the same time, the census is
    proposing to reduce or to eliminate work that it has done
    previously.
        What efforts are being made, Mr. Secretary, to ensure that
    the 2010 census is as cost effective and accurate as possible
    while maintaining other capabilities that the bureau provides?
    Because they do a lot of other ancillary things.
        Secretary Gutierrez. Absolutely. And this is an area, Mr.
    Chairman, where I believe we have made quite a bit of progress
    for the 2010 census, and I brought a little exhibit. This is
    something we used to use in our sales force in the
    supermarkets. I didn't have anything to do with it. It was
    already in place here. But----
        Senator Shelby. It worked, didn't it?
        Secretary Gutierrez. It works. So, instead of carrying a
    pad and having to jot down, they will have these small
    computers and hand-helds. And they will be putting the
    information, as they get it, into this hand-held computer,
    which will be consolidated and tabulated in a central location.
        So we are miles ahead from where we were, say, 10 years ago
    for our census, and we have already started now to train
    people, to get people in place. We are now doing the American
    community survey on a monthly basis, which is a long----
        Senator Mikulski. Guess who just got her survey
    questionnaire.
        Secretary Gutierrez. That is right.
        Senator Mikulski. I got mine.
        Secretary Gutierrez. And that allows us to make the 10-year
    questionnaire shorter, easier, quicker. So we get more accurate
    information. That will be extremely important.
        So we are getting geared up, and I believe that the folks
    at Census have done a great job, and this is a major innovation
    that will just put us ahead in terms of----
        Senator Shelby. Senator Mikulski, do you have any other
    questions?

                   PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS

        Senator Mikulski. First of all, the chairman's questions on
    economic development and the census paralleled my own. And also
    his remarks on competitiveness.
        I think where there is a true opportunity for partnership
    between the executive and legislative branch on a bipartisan
    basis is in this area to make us more innovative. Because our
    goal is to be able to create what we hope will be the economic
    infrastructure, if you will, for there to be jobs in this
    country. And that is kind of where we are.
        My question, though, that didn't come up goes with another
    national security issue. And that goes with interoperability of
    communications with our first responders. And for we in the
    capital region this is a very intense need and, as you know, is
    a national need. And after 5 years, almost 4\1/2\ now since 9/
    11, we are still not interoperable.
        The National Telecommunications Information Administration
    (NTIA), we understand, is about to give out a lot of money for
    grants. They will award with interoperability grants. The money
    will come from spectrum auction. But we are concerned that the
    standards haven't been developed.
        There was supposed to be this voluntary effort between the
    telecommunications industry, association, something called
    ``Project 25'' to develop this. But as of this January, little
    progress has been made. And when NIST tests the equipment that
    is coming down the pike, it doesn't seem to meet the standards.
        So here is my question. What are we doing really to develop
    interoperable standards? So no matter if you are a local
    volunteer fire department, funding yourself with fish fries, or
    you are a big government like New York and New Jersey, or we in
    the capital region can talk to each other.
        What has been developed in standards? And what are we going
    to do with this billion dollars? I am afraid that this could be
    another techno-boondoggle where people go out and buy gear that
    can't communicate. And we are already concerned in the capital
    region that there are significant gaps here.
        Senator Shelby. We want it to work. You know that.
        Senator Mikulski. So we want to know what will the money
    buy? Who is going to be eligible? And are the standards ready?
    And if they are not ready, shouldn't we make sure that the
    standard is in place before we start giving out the money?
        Secretary Gutierrez. Yes. We have the $1 billion, and we
    are actually doing a test in Washington, DC. This is the first
    time we have done a Federal/non-Federal test in the D.C. area
    to see what we can make interoperable, how much we can push
    this.
        And based on that test, which we need to push hard, we will
    come up with the framework, the standards that we can provide
    to business, get businesses' input and get to work on the
    national program. So we would roll out our D.C. test and it is
    just very fortunate that we are able to do it in the District.
        Senator Mikulski. When are you going to do that?
        Secretary Gutierrez. We are doing it as we speak. We are
    doing a test now. This is obviously interagency. It is
    Commerce. It is the Department of Homeland Security. It is
    Department of Justice. We can provide you that for the record.
        Senator Shelby. That would be good.
        [The information follows:]

        Public Safety Interoperable Communications Standards and Testing

        A report on this topic will be transmitted by letter from
    Secretary Gutierrez.

        Secretary Gutierrez. And a longer document on what is
    involved in the test.

              PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS SCENARIOS

        Senator Mikulski. But is the test to establish the
    standards?
        Secretary Gutierrez. Yes. The test will give us guidelines
    for the development of standards that we will develop in
    conjunction with the private sector.
        We believe the private sector needs some direction from us,
    and they need a little bit of help. And this test will give us
    the knowledge we need to tell the private sector how we should
    move forward because the private sector hasn't been as
    aggressive as we would like them to be.
        Senator Mikulski. Have you started to give the grants out
    yet?
        Secretary Gutierrez. No.
        Senator Mikulski. Well, I would encourage you, let us not
    give out the money.
        Secretary Gutierrez. We haven't.
        Senator Mikulski. Because my observation, at least in the
    capital region, again, is there are a million salesmen out
    there with a lot of gizmos. Some are quite good. Some are
    questionable. And they go to everything from county governments
    to small towns in the counties, and they say, ``Buy this. Buy
    this. It will be okay.''
        And you know, we believe in competition, so not a single
    product. Again, not winners and losers, but that it all be
    interoperable, depending on what you buy. And that for national
    security reasons, in other words, homeland security reasons,
    that each gizmo, the more gadgets it has on it, the more
    expensive.
        But that there be a core element that whatever you buy for
    first responders and local government, that it be a core
    element that enables us to transmit voice and data so they know
    what to do.
        Secretary Gutierrez. I think the test will enable us to be
    more certain about what to buy and what not to buy.
        Senator Mikulski. Are you personally----
        Secretary Gutierrez. Yes.
        Senator Mikulski. Is this thing operated out of your
    office?
        Secretary Gutierrez. It is being operated out of John
    Kneuer's office, NTIA. But I am very close to this and----
        Senator Mikulski. Well, Mr. Secretary, I know you have a
    lot on your plate, and I know you are traveling the world in
    the many issues we have talked about, protecting intellectual
    property, doing very important things for the good of our
    economic security. But this is a big one.
        Secretary Gutierrez. I would agree with that.
        Senator Mikulski. It is 4\1/2\ years since 9/11, and you
    would think that, number one, we can accelerate putting it in
    place. But working with NTIA, if you could personally keep an
    eye on it, so that it doesn't get bogged down. But at the same
    time, we really do achieve this goal. I think it is one of the
    most important things that you could accomplish, if I might be
    so bold.
        Secretary Gutierrez. I will stay very close to it. And if I
    may, I will send you a summary for the record of the test.
        Senator Shelby. That would be good.
        Senator Mikulski. Yes. Well, you know the importance of
    communication.
        Senator Shelby. That is right. Got to have it.
        Senator Mikulski. You know all about it, what you guys went
    through with Katrina. It could be a predatory attack, or it
    could be a natural disaster.
        Senator Shelby. We certainly need interoperability, don't
    we, Senator?
        Senator Mikulski. Yes, we certainly do.
        That concludes my questions.
        Senator Shelby. Mr. Secretary, we thank you for your
    appearance today.

                         ADDITIONAL COMMITTEE QUESTIONS

        We are going to keep the record open because we have some
    other Senators that couldn't be here who would like to submit
    some questions for the record, and we will hope that when we
    get them to you that you could respond to them no later than
    June 16, as we are working on the fiscal year 2007
    appropriations.
        [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 Richard C. Shelby

        FISCAL YEAR 2006 SUPPLEMENTAL--NATIONAL OCEANIC AND ATMOSPHERIC
                                 ADMINISTRATION

        Question. What financial mechanisms did the Department of Commerce
    use to create this almost three month delay in allocating December
    supplemental funds to the appropriate NOAA folks on the Gulf Coast?
        Answer. The Department of Commerce employed the standard financial
    and procedural mechanisms to approve, apportion and distribute the
    funds provided by Congress in Public Law 109-148. This enactment took
    just over six weeks, from the date of the signed appropriation to final
    distribution (please see timeline below).
        Question. Have all of the December supplemental funds been
    distributed? If not, why not?
        Answer. Yes. The funding was distributed to NOAA Line Offices on
    February 15, 2006. NOAA began conducting activities using those funds
    immediately.
        Question. How will the Department handle the distribution of
    additional supplemental funds?
        Answer. NOAA has formed an internal working team to expedite the
    distribution of funds. The Team has developed procedures to track the
    expenditures and ensure all internal control processes are set up to
    handle any additional funding.
        Question. Please provide the Committee with a timeline of events
    for getting supplemental funds to the intended recipients.
        Answer. The final transfer of funding to the intended recipient
    depends on the individual items listed in the supplemental. NOAA is
    working hard to award all contracts and transfer funding as soon as
    possible. The timeline for the enactment of funds from the December
    supplemental is as follows:
      --Public Law 109-148 signed--December 30, 2005
      --Apportionment Submitted to Department of Commerce--January 21, 2006
      --Apportionment Submitted to OMB--February 1, 2006
      --OMB Approval of Apportionment--February 9, 2006
      --Signed Apportionment received in NOAA--February 10, 2006
      --Final transfer to NOAA Line Offices--February 15, 2006

                      ECONOMIC DEVELOPMENT ADMINISTRATION

        Question. How would this restructuring of accounts be more
    beneficial to our communities that rely on these grants for economic
    improvement?
        Answer. Under the RDA, EDA will simplify its application process
    for communities while maintaining its current selection criteria and
    traditional balance between rural and urban projects. The restructuring
    of accounts into the RDA will provide additional benefits to
    communities because it will:
      --Allow grantees to engage simultaneously in multiple activities in
            support of a common initiative with just one EDA grant (e.g.,
            infrastructure and technical assistance).
      --Provide EDA additional flexibility to respond to sudden and severe
            economic dislocations (e.g., a significant plant closure,
            natural disaster covered by the Stafford Act, or a military
            base closure), especially when those economic dislocations
            occur near the end of the fiscal year.
      --Mirror the flexibility of EDA's popular and proven Economic
            Adjustment account.
      --Eliminate redundant application and reporting requirements for
            grantees.
      --Increase EDA's efficiency by providing a single, flexible program
            account and avoid the accounting and management challenge of
            managing four separate ``buckets'' of funding across the six
            EDA regions.
        Question. Should this Committee agree to the change in accounts as
    proposed in the budget request, what assurances can you provide that
    this restructuring won't leave gaps in assistance?
        Answer. EDA is a discretionary program for which there will always
    be a greater demand than supply when it comes to funding. It is
    important to note that if the RDA were enacted, it would have no impact
    on EDA's investment selection criteria, balance between rural and urban
    investments, or focus on economic distress. Additionally, the RDA would
    not affect the general level of funding per project.
        Additionally, the RDA would better ensure that small jurisdictions
    and rural areas have a ``seat at the table'' within the larger regional
    economic development framework. The RDA would increase the focus on
    regional approaches, allowing rural areas to better build on shared
    strengths and link up with regional economic hubs. This focus would in
    turn enhance the economic prospects of rural and distressed areas as
    they attempt to integrate into the larger economic region and
    participate in the growing national economy.
        Please see also the attached document, ``Economic Development
    Administration--Regional Development Account''.
        Question. Given this recent reprogramming of funds, how can the
    funding level requested for fiscal year 2007 be sufficient to continue
    current operations without a reorganization or restructuring, when it
    is less than what we have been told is necessary for fiscal year 2006?
        Answer. For fiscal year 2007, EDA will defer or cancel planned
    projects, including automation and training initiatives, defer staff
    hires until later in the year or to the following year, recruit interns
    in lieu of higher-graded staff, identify every available resource and
    potential operational efficiency, and, if absolutely necessary, reduce
    staff in order to maintain a six regional office footprint and operate
    within the parameters of the President's fiscal year 2007 budget
    request.
        Question. What funding level is necessary to maintain current EDA
    operations in fiscal year 2007?
        Answer. EDA continues to support the President's budget request for
    fiscal year 2007. The Salaries and Expenses request is $29.7 million.
    The request level would necessitate programmatic and organizational
    changes. To maintain the current regional office structure and level of
    service provided without changes may require additional resources.

                   UNITED STATES PATENT AND TRADEMARK OFFICE

        Question. Can you give us a status update on the U.S. Patent and
    Trademark Office's intellectual property education, outreach, and
    enforcement efforts?
        Answer. The USPTO is diligently working to help curb intellectual
    property theft and strengthen intellectual property (IP) protection and
    enforcement in every corner of the globe. As the largest IP office in
    the world, the USPTO is leading efforts to develop and strengthen
    domestic and international intellectual property protection.
        Under the American Inventors Protection Act (AIPA) of 1999 (Public
    Law 106-113), the USPTO is directed to advise the President, through
    the Secretary of Commerce, and all federal agencies on national and
    international intellectual property policy issues, including
    intellectual property protection in other nations. The USPTO is also
    authorized by the AIPA to provide guidance, conduct programs and
    studies, and otherwise interact with foreign intellectual property
    offices and international intergovernmental organizations on matters
    involving the protection of intellectual property.
        Through its Offices of International Relations, Enforcement, and
    Congressional Relations, the USPTO: (1) helps negotiate and works with
    Congress to implement international intellectual property treaties and
    develop domestic intellectual property related legislation; (2)
    provides technical assistance to foreign governments that are looking
    to develop or improve their intellectual property laws and systems; (3)
    provides capacity-building training programs to foreign intellectual
    property officials on intellectual property enforcement; (4) advises
    the Department of State and the U.S. Trade Representative (USTR) on
    drafting and reviewing intellectual property sections in bilateral and
    multilateral investment treaties and trade agreements; (5) advises the
    USTR and the Department of State on intellectual property issues in the
    World Trade Organization (WTO); (6) works with USTR, the Department of
    State, and American industry on the annual review of intellectual
    property protection and enforcement under the Special 301 provisions of
    the Trade Act of 1974; and (7) consults with the Department of Justice
    and other federal law enforcement entities who are responsible for
    intellectual property enforcement.
        The Strategy Targeting Organized Piracy (STOP!) Initiative.--The
    USPTO is actively involved in the Administration's STOP! initiative,
    the most comprehensive U.S. Government-wide initiative created to
    combat trade in pirated and counterfeit goods. The initiative is a
    collaboration of the Departments of Commerce, Justice, Homeland
    Security, and the Office of the USTR. The goal of the STOP! program is
    to prevent international piracy and counterfeiting and protect U.S.
    businesses, especially small and medium-sized enterprises, overseas.
    The STOP! initiative has brought together all the major players at the
    highest levels--the federal government, private sector, and trade
    partners--and this increased level of coordination has produced some of
    the initiatives described below and real results in our worldwide
    efforts to promote and protect IP.
        Help Hotline.--As part of STOP!, the USPTO manages a hotline (1-
    866-999-HALT) that helps small- and medium-sized businesses leverage
    the resources of the U.S. Government to protect their intellectual
    property rights in the United States and abroad. Callers receive
    information from IP attorneys at the USPTO with regional expertise on
    how to secure patents, trademarks and copyrights, and on the
    enforcement of these rights.
        Stopfakes.gov.--The USPTO has established a link on its website to
    www.stopfakes.gov which provides in-depth detail of the STOP!
    initiative. One key feature of the website is the country specific
    ``Toolkits'' that have been created by our embassies overseas to assist
    small- and medium-sized businesses with intellectual property rights
    issues in China, Korea, Mexico, Taiwan, and Russia, with additional
    toolkits to be posted soon. STOP! also seeks to increase global
    awareness of the risks and consequences of intellectual property crimes
    through a section of its website, www.stopfakes.com/smallbusiness, that
    is specifically designed and operated by the USPTO to answer common
    questions of small businesses so they can better identify and address
    their intellectual property protection needs.
        No-trade-in-fakes.--The no-trade-in-fakes program is being
    developed in cooperation with the private sector. This is a voluntary,
    industry driven set of guidelines and a corporate compliance program
    that participating companies will use to ensure their supply chains and
    retail networks are free of counterfeit or pirated goods. In addition,
    Customs and Border Protection (CBP) maintains a trademark recordation
    system for marks registered at the USPTO to assist the CBP in its
    efforts to prevent the importation of goods that infringe registered
    marks. The USPTO has begun mailing notices to new trademark registrants
    directing them to the services that CBP offers, and has established a
    website link on the USPTO homepage which contains the CBP form for
    recordation.
        Public Awareness Campaign.--While counterfeiting and piracy pose a
    serious threat to all American businesses, small businesses are
    particularly at risk since they often lack the knowledge and expertise
    to effectively combat them. Because small businesses typically do not
    have personnel or maintain large operations in other countries, theft
    of their intellectual property overseas can go undetected. As part of
    the STOP! initiative, the USPTO has launched an intensive national
    public awareness campaign to help educate small businesses on
    protecting their intellectual property both here and abroad.
        The USPTO began a conference series targeting small- and medium-
    sized businesses where participants learn what intellectual property
    rights are, why they are important, and how to protect and enforce
    these rights. Several workshops have been conducted throughout the
    country and the USPTO will continue to hold small-business outreach
    seminars to give American businesses face-to-face contact with
    intellectual property experts. This effort is expected to reach
    hundreds of American entrepreneurs in fiscal year 2006.
        The USPTO has also participated in a China road show in several
    U.S. cities for companies ranging from small businesses contemplating
    entering the China market to large corporations with established
    presence in China. Topics have included a review of recent laws and
    regulations promulgated by the Chinese government that affect
    protection and enforcement of intellectual property, what the U.S.
    Government is doing to improve intellectual property protection and
    enforcement in China, how to best protect business assets to avoid
    intellectual property problems, how to recognize product infringement,
    and steps to take if infringement occurs.
        Posting of IP Experts.--In partnership with the Department of
    Commerce's U.S. and Foreign Commercial Service and the Department of
    State, the USPTO is working to post additional IP experts in selected,
    high-profile countries where U.S. IP challenges are greatest. These
    countries include China, Brazil, India, Thailand, Russia and Egypt. The
    experts will advocate U.S. IP policy and interests, conduct training on
    IP rights matters, assist U.S. businesses and otherwise support the
    Embassy or Consulate action plan on IP rights.
        Global Intellectual Property Academy.--In the fall of 2005, USPTO
    created the Global Intellectual Property Academy (GIPA), which
    consolidates and greatly expands USPTO's curriculum of training and
    capacity building programs on intellectual property rights protection
    and enforcement. Through the GIPA, USPTO will bring foreign government
    officials including judges, prosecutors, police, Customs officers,
    patent, trademark and copyright officials and policy makers to the
    United States to learn, discuss and strategize about global IPR
    protection and enforcement. In fiscal year 2006, the USPTO expects this
    effort to reach several hundred foreign IPR officials. GIPA programs
    cover the gamut of patent, trademark, copyright and IPR enforcement
    issues facing the global economy, and are offered by USPTO acting in
    close cooperation with other U.S. federal government agencies.
        Training, Workshop and Seminar Events.--Various completed and
    planned training, workshops, seminars and other IP-related events are
    ongoing.

      NATIONAL POLAR-ORBITING OPERATIONAL ENVIRONMENTAL SATELLITE SYSTEM
                                    (NPOESS)

        Question. In your opening statement, you say that your Department's
    goal will be to ``ensure the best possible approach for meeting the
    Nation's civilian and military meteorological needs and protecting the
    taxpayer.'' What exactly are the options being considered within NOAA
    in response to the increased cost and schedule delays for NPOESS?
        Answer. In addition to the program of record, a range of options
    were considered in the Nunn-McCurdy certification process. The options
    (over 40 were considered) are best characterized as: reducing the
    number of satellites on orbit; changing the capabilities of the
    instruments on the satellite; and delaying launch dates. After five
    months of careful and extensive deliberations, the Tri-Agency group
    participating in the Nunn-McCurdy certification process chose an option
    that reduces the number of orbits from three to two; continues
    cooperation with the European Organisation for the Exploitation of
    Meteorological Satellites (EUMETSAT) for the mid-morning orbit;
    minimizes any potential gaps in coverage; and reduces requirements for
    the Conical-scanning Microwave Imager/Sounder (CMIS) resulting in a
    recompete of a less complex system. The cost to procure several
    secondary sensors is not included in the certified program; however,
    the program will plan for and fund the integration of these sensors on
    the spacecraft. Further, any additional funding gained through contract
    renegotiation or in unutilized management reserve would be used to
    procure these secondary sensors.
        Question. Would NOAA be better off going it alone on the NPOESS
    program, rather than continuing the partnership with the U.S. Air Force
    and NASA? What would be the cost for NOAA to take on a satellite
    program of this magnitude on its own?
        Answer. As a precaution during the Nunn-McCurdy certification
    process, NOAA (with the assistance of NASA) looked at the ways to
    maintain continuity of polar satellite data other than the converged
    NPOESS program. Any scenario where NOAA would go it alone would be
    costly and yield less capability than the partnership program. The
    restructured program maintains the Tri-Agency partnership of the
    original program. NOAA continues to support the Tri-Agency program and
    benefits by the 50:50 funding partnership between the Air Force and
    NOAA.
        Question. How are we addressing potential gaps in satellite
    coverage given the delays that have already been experienced, and the
    possibility of even more delays due to the Nunn-McCurdy process?
        Answer. The number one priority in all of the Nunn-McCurdy
    certification analysis and deliberations was to avoid a gap in
    operational data delivery. The restructured program provides high
    confidence that no gap will exist. A 90 percent confidence level
    schedule for avoiding an operational data gap has been laid out for the
    restructured program. Before the launch of the first NPOESS, NOAA seeks
    to delay the launch of its last polar satellite, NOAA N Prime; rely on
    the NPOESS Preparatory Project (NPP); and through a partnership with
    EUMETSAT, will receive data from METOP. An updated NPOESS satellite
    schedule is attached.

                             U.S. OCEAN ACTION PLAN

        Question. Why is the gap so consistently great between the
    administration's annual requests to support our oceans with that of the
    true needs of our ocean community?
        Answer. NOAA has a diverse mission ranging from managing fisheries
    to predicting the severe weather. The Administration's requests provide
    a balanced set of priorities to sustain core mission services and
    address our highest priority program needs. However, even with a
    restrained fiscal environment, the fiscal year 2007 President's budget
    includes over $184.9 million in increases for ocean and coastal needs.
        NOAA will continue to work within the Administration and with
    Congress to ensure the ocean community's highest needs are addressed.
        Question. In what way does the fiscal year 2007 budget request
    provide sufficient funding to address NOAA's responsibilities in
    relation to the Joint Ocean Commission's Reports, or does the current
    request follow the same trend as 2005 and 2006 as identified by the
    recent report?
        Answer. Both the fiscal year 2007 President's budget and NOAA's
    activities support the President's U.S. Ocean Action Plan, which
    responded to the recommendations of the U.S. Commission on Ocean
    Policy. NOAA has requested $1.7 billion in ocean and coastal related
    programs and activities in the fiscal year 2007 President's budget
    request in support of the U.S. Ocean Action Plan (OAP); this is an
    increase of $184.9 million over the fiscal year 2007 base. The OAP
    reflects the Administration's focus on achieving meaningful results--
    making our oceans, coasts, and Great Lakes cleaner, healthier, and more
    productive. The Plan itself is a budget-neutral document, and does not
    commit any new investments to fulfilling its objectives.
        Question. What progress has NOAA made in addressing the
    recommendations put forward by the U.S. Commission on Ocean Policy,
    specifically the Report Card's low marks for ``International
    Leadership'' and ``Research, Science and Education?''
        Answer. As you know, the Administration responded to the
    Commission's report with the U.S. Ocean Action Plan. The OAP reflects
    the Administration's focus on achieving meaningful results--making our
    oceans, coasts, and Great Lakes cleaner, healthier, and more
    productive. It recognizes the challenges in developing management
    strategies that ensure continued conservation of coastal and marine
    habitats and living resources while at the same time ensuring that the
    American public enjoys and benefits from those same resources.
        Not all of our work towards implementing the OAP is budgetary in
    nature. A key achievement has been to address the Ocean Commission's
    call to improve coordination of Federal agencies with ocean-related
    missions through the creation of the interagency Committee on Ocean
    Policy and its subsidiary groups. NOAA is lead or co-lead, for roughly
    half the assigned items from the President's plan, and has made
    significant strides on several OAP actions:
      --The NOAA Organic Act establishing NOAA within the Department of
            Commerce was transmitted to Congress in April 2005.
      --Magnuson-Stevens Fishery Conservation and Management Act
            reauthorization and legislation to establish a national
            offshore aquaculture program was introduced.
      --An Administration bill for the reauthorization of the Marine Mammal
            Protection Act was submitted in June 2005.
      --NOAA is playing a key role in the Gulf of Mexico Alliance and the
            planning for the formation of a Northeast Regional Oceans
            Council.
      --NOAA Fleet: NOAA received $34 million in fiscal year 2005 to build
            the third Fisheries Survey Vessel, which is expected to be
            delivered in late 2007. NOAA also exercised an option for about
            $30 million to build the fourth planned vessel under an
            existing contract. Construction will begin in 2006 with
            delivery planned during the second half of 2008.
        Many of the remaining action items--including improving
    International Leadership and Research, Science and Education--are long-
    term projects which are more about changing the way the world manages
    our ocean resources:
      --Ocean Education.--The Ocean Hall exhibition--developed in concert
            with NOAA--has opened at the Smithsonian, and is slated to be
            open for 30 years, with a web portal that provides virtual
            access to the museum's marine collections.
      --Regional Partnership in the Gulf of Mexico.--The Gulf Governors'
            Action Plan has been developed by the five Gulf States as part
            of the Gulf of Mexico Partnership. The Action Plan was unveiled
            on March 28, 2006, at the State of the Gulf Summit in Corpus
            Christi, Texas.
      --Partnership Creation.--State Department funding of $320,000 for a
            White Water to Blue Water Initiative small grants program will
            allow ongoing partnerships to continue and new partnerships to
            be developed among international and multi-sectoral partners
            which will promote integrated watershed and marine ecosystem-
            based management.
      --Link the Global Marine Assessment (GMA) and Global Earth
            Observation System of Systems.--Through international
            cooperation, the GEOSS will collect and disperse data
            information from terrestrial, atmospheric, climate, and ocean
            observations. The GMA, under development since the World Summit
            on Sustainable Development, will seek to establish a regular,
            comprehensive process of reporting and assessment of the state
            of the global marine environment.

                             CONGRESSIONAL EARMARKS

        Question. What can Congress do to fully fund the needs of the
    agency, including those activities that have been eliminated or under-
    funded by the administration, in a manner that would not cause the
    administration to view those activities as Congressional ``add-ons?''
        Answer. The first priority is to fully fund the fiscal year 2007
    President's budget request. The request level of $3,684 million
    contains modest investments in core programs and ocean-related
    activities. The President's budget is focused on meeting National needs
    for NOAA services. In many cases, the Congressional ``earmarks'' and
    ``add-ons'' address a single purpose in a defined geographic area.
    While some have merit and support NOAA's mission, the fiscal year 2007
    request focused on the highest priority programs to meet National
    needs.

                            DEPARTMENTAL MANAGEMENT

        Question. Within the Departmental Management Salaries and Expenses
    account, there is a $3.6 million increase for E-Government Initiatives.
    Is this funding level for the E-Government Initiatives of the
    Department of Commerce only? Are any of these funds a ``tax'' to be
    paid to the Office of Management and Budget?
        Answer. The Department of Commerce has included a funding request
    for e-government initiatives and lines of business (LoB) for fiscal
    year 2007. The breakdown is as follows:

    ------------------------------------------------------------------------
     Agency                    Initiative/LoB                       Amount
    ------------------------------------------------------------------------
        EPA E-Rulemaking                                          $855,000
    DOC/ITA International Trade Process Streamlining               740,000
        SBA Business Gateway                                       329,000
        HHS Grants.gov                                             521,000
        GSA Integrated Acquisition                                 174,000
        GSA E-Authentication                                       749,000
        GSA Financial Management LoB                                83,000
        OPM Human Resources LoB                                    130,000
        HHS Grants Management LoB                                   60,000
                                                              --------------
                  Total Commerce                                 3,641,000
    ------------------------------------------------------------------------

        These funds represent the total Commerce funding contribution to
    the managing partner agencies, which develop the initiatives and lines
    of business. Funding amounts are based on initiative and line of
    business costs and were jointly determined by the managing partner
    agency and the agencies making use of the services provided by the
    initiative and lines of business. The funds are used by the managing
    partner agencies to support operations and implementation of the
    initiatives and lines of business. As a user of services provided by
    these initiatives and lines of business, Commerce benefits through
    economies of scale, avoidance of duplication of effort, and improved
    services to its citizen constituents.
        These funds will be sent through memoranda of understanding to the
    managing partner agencies. The Office of Management and Budget does not
    receive any of the Commerce funds.
        Question. The fiscal year 2007 budget request includes $18 million
    for the renovation and modernization of the Herbert C. Hoover Building,
    headquarters for the Department of Commerce. The Committee notes that
    funding was requested in fiscal year 2006, but not appropriated. What
    would this level of funding provide?
        Answer. This funding level would allow DOC to fund its share of
    costs related to the first phase of construction (primarily build out
    and furnishing of a consolidated data center and internal swing space);
    fund the fiscal year 2007 portion of the DOC share of costs for the GSA
    Lease Prospectus approved by Congress (moving one-third of the HCHB
    employees to leased swing space, providing unoccupied areas for
    renovation of one-third of the HCHB at a time); and to fund a Project
    Management Office (PMO) that will manage DOC responsibilities
    throughout the life of the renovation. The fiscal year 2007 funding
    request consists of three major components listed below.

    ------------------------------------------------------------------------
                                                                  Amount
    ------------------------------------------------------------------------
    Build-out and furnish the courtyard 6 space.............      $5,900,000
    Lease space costs.......................................      10,400,000
    Contract support for PMO................................       1,700,000
                                                             ---------------
          TOTAL.............................................      18,000,000
    ------------------------------------------------------------------------

        Question. How many years of follow-on funding would be needed to
    complete the renovation of the Herbert C. Hoover Building?
        Answer. The renovation project is expected to continue through
    2017.
        Question. Within the Departmental Management Salaries and Expenses
    account, there is a $5.9 million increase for blast mitigation windows
    for the Herbert C. Hoover Building. Is this the total funding level
    necessary, or will there be an additional request in fiscal year 2008?
    How many years of funding and at what level may we expect to see in
    this account?
        Answer. Approximately one-third of the facility will be protected
    with the start-up funding requested in fiscal year 2007. Additional
    funding requirements and timing of installation of additional windows
    will need to be determined in the context of the overall Hoover
    Building renovation.
        Question. Why are blast mitigation windows necessary for the
    Department, when other D.C. offices--even the U.S. Capitol--use more
    cost effective alternatives?
        Answer. Blast mitigation windows are required to protect the lives
    of our employees and other occupants. It is the most cost-effective
    protection for this unique facility. All other Federal buildings in the
    Federal Triangle area have upgraded windows.
        The HCHB requires this level of countermeasure to mitigate the risk
    to our employees. Vulnerability factors include:
      --Location immediately adjacent to two intersection HAZMAT routes
            (14th Street and Constitution Avenue) and nearby rail line that
            transports HAZMAT cargo.
      --No available standoff, dedicated police officers or permanent/
            temporary street closures (available at U.S. Capitol).
      --Proximity to known terrorism targets.
        Independent studies on the HCHB by GSA and the Federal Protective
    Service (now DHS) recognized the vulnerability to hazardous window
    failure and documented the requirement for blast windows to provide
    cost-effective security.
      --Federal Protective Service (now DHS): Security Survey/Risk
            Assessment Report, 2001. ``Window protection is inadequate.''
      --GSA: Window Blast Hazard Mitigation Study, 2003. The HCHB ``is
            vulnerable to hazardous window failure . . . windows,
            therefore, require an upgrade.''
      --GSA: Modification of HCHB HVAC to Obtain Positive Building
            Pressurization and Air Filtration, 2003. ``Existing windows are
            in `poor condition' and need to be replaced to improve the
            pressurization that will mitigate chemical, biological, and
            radiological contaminants.''

                      ECONOMIC DEVELOPMENT ADMINISTRATION

        Question. You have stated that EDA can operate within the
    parameters of the President's fiscal year 2007 budget request and
    maintain a six office regional footprint. What impact, if any, will
    there be, on service delivery, operations and human resource levels by
    maintaining six offices with this level of resources for this number of
    offices?
        Answer. EDA is committed to honoring congressional intent by
    maintaining a six-office regional footprint while at the same time
    supporting the President's budget request. EDA will do this by
    dedicating available resources to essential activities such as proposal
    review and approval, grant award, grant administration and required
    reporting, achieving efficiencies and process improvements throughout
    its operations. EDA will ensure adequate funding of these essential
    services through reductions to non-essential and lower priority
    activities. This could include reductions to one-on-one customer
    assistance before and during the application process, process
    automation, training, post-award customer support and oversight. As a
    last resort, EDA may be required to consider staff reductions.

                             CONCLUSION OF HEARINGS

        Senator Shelby. For the information of Senators and others,
    this subcommittee's next hearing is scheduled for June 7 in the
    Dirksen Senate Office Building, room 192 at 10 a.m. on overview
    of the 2006 hurrance season.
        Until then, the subcommittee stands in recess.
        [Whereupon, at 3:09 p.m., Wednesday, May 3, the hearings
    were concluded, and the subcommittee was recessed, to reconvene
    subject to the call of the Chair.]