[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.]
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