    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

     BORDER STATION CONSTRUCTION: MINIMIZING COSTS AND LEVERAGING PRIVATE
                                    DOLLARS

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

                                    (114-42)

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
        ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                     OF THE

                                  COMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 18, 2016

                                   __________

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                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      BILL SHUSTER, Pennsylvania, Chairman
    DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
    JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of
      Vice Chair                             Columbia
    JOHN L. MICA, Florida                JERROLD NADLER, New York
    FRANK A. LoBIONDO, New Jersey        CORRINE BROWN, Florida
    SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
    CANDICE S. MILLER, Michigan          ELIJAH E. CUMMINGS, Maryland
    DUNCAN HUNTER, California            RICK LARSEN, Washington
    ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
    LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
    BLAKE FARENTHOLD, Texas              DANIEL LIPINSKI, Illinois
    BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
    RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
    DANIEL WEBSTER, Florida              DONNA F. EDWARDS, Maryland
    JEFF DENHAM, California              JOHN GARAMENDI, California
    REID J. RIBBLE, Wisconsin            ANDRE CARSON, Indiana
    THOMAS MASSIE, Kentucky              JANICE HAHN, California
    MARK MEADOWS, North Carolina         RICHARD M. NOLAN, Minnesota
    SCOTT PERRY, Pennsylvania            ANN KIRKPATRICK, Arizona
    RODNEY DAVIS, Illinois               DINA TITUS, Nevada
    MARK SANFORD, South Carolina         SEAN PATRICK MALONEY, New York
    ROB WOODALL, Georgia                 ELIZABETH H. ESTY, Connecticut
    TODD ROKITA, Indiana                 LOIS FRANKEL, Florida
    JOHN KATKO, New York                 CHERI BUSTOS, Illinois
    BRIAN BABIN, Texas                   JARED HUFFMAN, California
    CRESENT HARDY, Nevada                JULIA BROWNLEY, California
    RYAN A. COSTELLO, Pennsylvania
    GARRET GRAVES, Louisiana
    MIMI WALTERS, California
    BARBARA COMSTOCK, Virginia
    CARLOS CURBELO, Florida
    DAVID ROUZER, North Carolina
    LEE M. ZELDIN, New York
    MIKE BOST, Illinois
                                    ------

     Subcommittee on Economic Development, Public Buildings, and Emergency
                                   Management

                      LOU BARLETTA, Pennsylvania, Chairman
    ERIC A. ``RICK'' CRAWFORD, Arkansas  ANDRE CARSON, Indiana
    THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of
    MARK MEADOWS, North Carolina             Columbia
    SCOTT PERRY, Pennsylvania            ALBIO SIRES, New Jersey
    RYAN A. COSTELLO, Pennsylvania       DONNA F. EDWARDS, Maryland
    BARBARA COMSTOCK, Virginia           DINA TITUS, Nevada
    CARLOS CURBELO, Florida              PETER A. DeFAZIO, Oregon (Ex
    DAVID ROUZER, North Carolina             Officio)
    BILL SHUSTER, Pennsylvania (Ex       VACANCY
        Officio)

                                    CONTENTS

                                                                       Page

    Summary of Subject Matter........................................    iv

                                   TESTIMONY
                                    Panel 1

    Michael Gelber, Deputy Commissioner, Public Buildings Service,
      U.S. General Services Administration...........................     3
    Eugene Schied, Assistant Commissioner, Office of Administration,
      U.S. Customs and Border Protection, U.S. Department of Homeland
      Security.......................................................     3

                                    Panel 2

    Gary Gallegos, Executive Director, San Diego Association of
      Governments, and Board Member, Coalition for America's Gateways
      and Trade Corridors............................................    10
    Sam F. Vale, Chair, Public Policy Committee, Border Trade
      Alliance.......................................................    10

                   PREPARED STATEMENTS SUBMITTED BY WITNESSES

    Michael Gelber...................................................    19
    Eugene Schied....................................................    23
    Gary Gallegos....................................................    28
    Sam F. Vale......................................................    35

                           SUBMISSIONS FOR THE RECORD

    Gary Gallegos, Executive Director, San Diego Association of
      Governments, and Board Member, Coalition for America's Gateways
      and Trade Corridors, supplementary information for the record..    41

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     BORDER STATION CONSTRUCTION: MINIMIZING COSTS AND LEVERAGING PRIVATE
                                    DOLLARS

                                  ----------

                            WEDNESDAY, MAY 18, 2016

                      House of Representatives,
                  Subcommittee on Economic Development,
            Public Buildings, and Emergency Management,
                Committee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10:02 a.m. in
    room 2253, Rayburn House Office Building, Hon. Lou Barletta
    (Chairman of the subcommittee) presiding.
        Mr. Barletta. The committee will come to order. Good
    morning.
        Border security is a fundamental responsibility of the
    Federal Government because we must protect both our national
    security and the American worker. This makes border stations
    critical to our Nation's security and our economy.The purpose
    of today's hearing is to review major capital projects at our
    Nation's border stations and examine how we can use non-Federal
    and private dollars that are sitting on the sidelines to
    jumpstart projects to help meet these infrastructure needs.
        It is important that the men and women who guard our border
    have the resources that they need to better enforce our
    existing immigration and trade laws.
        There are 167 land ports of entry, also known as border
    stations, that, according to GSA, see roughly $2 billion in
    trade crossings; 350,000 vehicles; 135,000 pedestrians, and
    30,000 trucks daily. These land ports of entry are important to
    our national security, as they serve as a line of defense
    against those who would enter this country illegally and with
    the intent of attacking our homeland.
        However, the cost of maintaining and modernizing our land
    ports of entry is not cheap. Projects recently completed or
    underway in recent years have totaled $1.5 billion. And these
    costs don't include equipping and staffing these border
    stations. That is why I worked to help craft language enacted
    in the fiscal year 2014 appropriations bill to establish a
    pilot program for public-private partnerships.
        This pilot program allows for non-Federal donations of real
    property and equipment at owned border stations to help reduce
    costs to the taxpayer. More recently, language further refining
    this program was included as part of H.R. 3586, the Border and
    Maritime Coordination Improvement Act.
        The intent of this pilot program is not to replace the
    Federal responsibility of constructing and maintaining these
    critical facilities. To be clear, making sure that we have the
    infrastructure and tools in place to enforce immigration and
    trade laws is a Federal responsibility. Rather, the intent is
    to provide additional tools to GSA and CBP to work with State,
    local, and private sector partners to help temporarily address
    the funding gaps.
        Potential donations under the pilot should not be used to
    replace our Federal responsibility or to circumvent our process
    of appropriately identifying priorities and needs. Donations,
    whether they be of real property or equipment, are not free.
    Generally, acquisition costs are only a portion of the total
    cost of an asset.
        Each project considered under the pilot program should be
    limited in scope and be carefully reviewed to ensure it fits
    with our national priorities and that the costs associated with
    ongoing maintenance and upkeep are assessed to protect the
    taxpayer from picking up an unexpected bill down the road.
        While CBP owns 42 percent of the owned stations, GSA owns
    and manages all of the largest and most heavily used border
    stations. The size and complexity of these facilities vary
    widely and include facilities with traffic as little as two
    vehicles a day and 3,000-square-foot buildings, to large
    complexes that see thousands of vehicles and house a multitude
    of Federal agencies, including CBP, ICE, Agriculture, CDC, and
    the FDA.
        Unfortunately, many of these border stations have not kept
    up with new technologies, threats, and traffic. We must ensure
    that we can effectively screen people and goods to protect our
    Nation's security and commerce, but at the same time facilitate
    the movement of legitimate traffic and goods. This is a tough
    balance, and the facilities and related infrastructure managed
    by GSA and CBP are critical to this mission.
        Without proper facilities, new technologies like biometric
    entry and exit systems that better screen people and vehicles
    cannot be effectively deployed. Without space for all the key
    agencies to operate, commerce may be slowed, hurting American
    businesses and killing job opportunities.
        Today, I am pleased to have GSA and CBP, as well as private
    and local representatives here with us today. We want to know
    the status of projects that we have authorized, what are the
    future needs and priorities, and how public-private
    partnerships could be effectively used to help temporarily fill
    any gaps. I hope we can get answers to these and other
    questions today. I look forward to hearing from our witnesses
    today, and I want to thank you.
        And I now call on the ranking member of the subcommittee,
    Mr. Carson, for his opening statement.
        Mr. Carson. Thank you, Chairman Barletta. Good morning,
    everyone.
        The GSA serves an important role as the property and
    construction manager for the Federal Government. Today(s
    hearing rightly chooses to focus on how GSA can continue to
    effectively manage the land ports of entry construction
    program.
        GSA owns and manages all of the largest land ports of entry
    along the southern border. Daily nearly $2 billion in trade
    crosses through the border crossings, along with 355,000
    vehicles; the 135,000 pedestrians; and 30,000 trucks. Today we
    hope to learn how GSA is improving the infrastructure at land
    ports of entry, and how they can facilitate more efficient and
    secure crossings between the United States and its trading
    partners along the southern and northern borders.
        I would like to thank Deputy Commissioner Michael Gelber of
    GSA for joining us today to outline the agency's role in
    maintaining and constructing land ports of entry. The
    Department of Homeland Security often has the largest Federal
    agency presence at land ports of entry and border stations, so
    I am pleased that they will be joining us, as well.
        I am also pleased that we have two organizations
    representing private sector organizations for coming in today
    and giving us their perspective on working with GSA and DHS. I
    also look forward to hearing their insights on how DHS is
    implementing the pilot public-private donation program that is
    meant to speed the development of land ports of entry. Thank
    you for coming.
        I yield back, Mr. Chairman.
        Mr. Barletta. Thank you. On our first panel today we have
    Mr. Michael Gelber, Deputy Commissioner, Public Buildings
    Service of General Services Administration; and Mr. Eugene
    Schied, Assistant Commissioner, Office of Administration,
    United States Customs and Border Protection.
        I ask unanimous consent that our witnesses' full statements
    be included in the record.
        [No response.]
        Mr. Barletta. Without objection, so ordered.
        Each of you is now recognized for 5 minutes. Mr. Gelber,
    you may proceed.

       TESTIMONY OF MICHAEL GELBER, DEPUTY COMMISSIONER, PUBLIC
     BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION; AND
           EUGENE SCHIED, ASSISTANT COMMISSIONER, OFFICE OF
       ADMINISTRATION, U.S. CUSTOMS AND BORDER PROTECTION, U.S.
                    DEPARTMENT OF HOMELAND SECURITY

        Mr. Gelber. Good morning, Chairman Barletta, Ranking Member
    Carson. My name is Michael Gelber, and I am the Deputy
    Commissioner of the U.S. General Services Administration's
    Public Building Service. Thank you for inviting me to this
    hearing on land ports of entry construction.
        GSA's mission is to deliver the best value in real estate,
    acquisition, and technology services to the Government and the
    American people. As part of this mission, GSA maintains a close
    partnership with the Department of Homeland Security Customs
    and Border Protection to meet that agency's space needs along
    our Nation's borders.
        CBP is our primary partner among the Federal inspection
    agencies stationed along America's land borders. GSA works
    closely with CBP to design, construct, maintain, and operate
    land ports of entry along more than 1,900 miles of border
    between the United States and Mexico, and more than 5,500 miles
    of border between the United States and Canada. Of the 167 land
    ports of entry along America's borders, GSA manages 124, of
    which the Government owns or partially owns 102. GSA's land
    ports of entry encompass more than 5.5 million square feet of
    space.
        CBP operates 40 primarily smaller ports, mostly in remote
    areas. These land ports of entry encompass approximately
    477,000 square feet of space. Minimizing costs to deliver these
    critical land ports of entry begins with effective targeting of
    resources at the highest priority projects. GSA looks to CBP to
    develop its priority list first. Then GSA, while still working
    closely with CBP, integrates these CBP priorities into GSA's
    larger, multiyear capital investment plan.
        Over the past 16 years, GSA has invested more than $1.8
    billion from the Federal buildings fund to deliver more than 20
    new land ports along our northern and southern borders. Since
    2013 GSA has requested over $1 billion in support of land port
    modernization, including GSA's fiscal year 2017 request of $248
    million to reconfigure and expand the land port of entry in
    Calexico, California, and $5.7 million for design and
    construction of a new animal inspection facility in Pembina,
    North Dakota.
        Of these requests, Congress has provided approximately $700
    million through fiscal year 2016. Successful execution of these
    land port of entry projects improves trade and commerce,
    creates jobs, and bolsters our Nation's security. GSA's ability
    to fund land ports of entry has historically been supported by
    appropriations provided by Congress. Without the full funding
    requested in the President's annual budget, GSA cannot execute
    the land port upgrades that are critically needed.
        In recent years GSA has seen greater interest in finding
    alternatives to Federal appropriations to support the delivery
    of high-priority land port projects, including by accepting
    donations through GSA and CBP existing authorities.
        When assessing the viability of any project, whether it is
    funded through the traditional appropriations process or
    alternative means, GSA and CBP look at the full life cycle cost
    of a port. This analysis includes the funding amount and source
    of that funding to operate and maintain the facility.
        If an alternative funding source might be available to
    construct a land port of entry, GSA and CBP still may need to
    obtain funding to address the other costs associated with the
    project. Thus, acceptance of what appears to be a cost-free
    donation could ultimately result in additional costs to the
    Government. At the same time, if the investment is required to
    address critical commerce and security requirements at the
    border, a donation would result in lower cost to the Government
    than if the Government had to make the full investment itself.
        When evaluating donations, GSA and CBP will continue to
    weigh these various cost implications, relative to the
    opportunity to impact on CBP operations, border security, trade
    and travel, and local and regional economic benefits.
        GSA has a longstanding authority to accept unconditional
    gifts of real and personal property from other public or
    private entities. GSA has used its authority on occasions when
    State or local governments and, in a few cases, private-sector
    entities have elected to donate land or other real property to
    GSA. Congress has supported efforts to find land port of entry
    funding alternatives by providing CBP additional statutory
    authority to receive donations and reimbursement from State,
    local, and private entities.
        Congress expanded CBP and GSA's donation authorities
    through section 559 of the Consolidated Appropriations Act of
    2014. As required by section 559 donation acceptance authority,
    GSA and CBP work collaboratively to establish robust evaluation
    criteria, incorporating feedback from a broad range of
    stakeholders.
        Thank you for the opportunity to speak with you today about
    GSA's ongoing partnership with CBP to cost-effectively improve
    the Nation's infrastructure along America's borders.
        I welcome the opportunity to discuss GSA's commitment to
    strategic investment in the Nation's land ports of entry, and
    am happy to answer any questions you may have.
        Thank you.
        Mr. Barletta. Thank you for your testimony.
        Mr. Schied, you may proceed.
        Mr. Schied. Good morning, Chairman Barletta, Ranking Member
    Carson. Thank you for the opportunity to appear before you
    today to discuss CBP's role and efforts to provide modern,
    efficient, and effective land ports of entry facilities in
    support of our mission to secure and facilitate trade and
    travel into the United States.
        Alongside the General Services Administration, CBP
    facilities management and engineering directorate oversees the
    repair and modernization of CBP's inspectional facilities at
    our 167 land border crossings along the U.S. border with Canada
    and Mexico.
        Most of the land ports of entry were built prior to the
    creation of the Department of Homeland Security and CBP. When
    they were designed and built to support the distinct and
    independent operation of pre-DHS agencies such as the U.S.
    Customs Service, Animal and Plant Health Inspection Service,
    and the Immigration and Naturalization Service.
        Today, CBP consolidated operations incorporate state-of-
    the-art technology and professional law enforcement personnel
    to maintain the efficient and secure flow of cross-border trade
    and travel. Operational success depends on the condition and
    utility of our inspectional facilities. As distinct from the
    conventional office environment, these facilities are unique
    and critical to CBP's mission success.
        Today I would like to discuss CBP's role in addressing
    infrastructure demand and modernized inspection facilities to
    meet the challenge of growing volumes of trade and travel.
        Many of the Nation's land port of entries were built more
    than 70 years ago. Even those constructed as recently as 15
    years ago require renovation or replacement to meet present-day
    security standards, enforcement and facilities technologies,
    and the growing demand for additional processing capacity.
        Trade between the United States and Mexico has expanded
    nearly sixfold, from $100 billion in 1993 to $531 billion last
    year, with similar increases in trade with Canada. During the
    same period, capital investment in the land port of entry
    facilities that process this trade and travel have averaged
    less than $90 million a year. This historic insufficiency in
    investment has led to a compounding current investment need
    estimated to be about $5 billion.
        A study performed by the University of California Center
    for Risk and Economic Analysis of Terrorism Events, or CREATE,
    showed that an investment in constructing and staffing a single
    new vehicle processing lane at a port can translate to as much
    as $25 million in positive economic value.
        CBP uses a multistep process to prioritize land port of
    entry modernization investments. In coordination with key State
    and Federal and local stakeholders, we assess individual needs
    at each facility. This assessment process is the underpinning
    of our prioritization process. It is metrics driven, its
    purpose is to identify candidate locations most in need of
    improvement.
        In addition to this assessment, numerous other factors come
    into play. These include factors such as environmental,
    cultural, and historic preservation, land acquisition
    requirements, the impact on other projects in the same
    geographic area, and other project risks, including the
    likelihood of obtaining funds. After our assessment, we
    collaborate with GSA's Public Building Service to jointly
    develop a prioritized capital investment plan, and we update it
    annually to ensure that the available Federal funding is
    directed to the areas of greatest need.
        CBP actively participates in regional border planning
    efforts and works in close coordination with regional
    transportation groups. We look carefully at each port's
    activity and its regional context, and we work with State and
    local stakeholders to determine where and what kind of
    inspection facilities are needed, both now and in the future.
        In addition to traditional funding streams, thanks to the
    support of Congress, CBP has recently received the authority to
    enter into partnerships with the private sector and local
    government entities to accept donations of real and personal
    property. This authority provides CBP and GSA the opportunity
    to consider donations and proposals to address local port of
    entry infrastructure needs that might not otherwise be
    addressed. These donations are expected to reduce border wait
    times, support increased flow and volume of traffic, create
    jobs, and address critical needs.
        Last year CBP and GSA selected three proposals for further
    planning and development. This spring we expect to announce
    additional selections, and we look forward to continuing to
    work with our partners for the shared goal.
        In closing, thank you again, Chairman Barletta and Ranking
    Member Carson, for the opportunity to testify. And thank you
    for the interest and support of port of entry projects. And I
    am happy to answer your questions.
        Mr. Barletta. Thank you for your testimony. I will now
    begin the first round of questions limited to 5 minutes for
    each Member. If there are any additional questions following
    the first round, we will have additional rounds of questions,
    as needed.
        Mr. Gelber, we have authorized projects valued at nearly
    $1.5 billion in recent years, with some of those projects being
    for--that's 30 years before. On some of the major projects,
    Calexico, San Ysidro, and Alexandria Bay, can you give us a
    summary of where you are with those projects and will
    additional authorizations be required?
        Mr. Gelber. Yes, sir. San Ysidro was a three-phase project,
    and funding has been provided for all three phases. The first
    phase is nearing completion, if not--significant portions of
    that phase have been completed. In an oddity of that particular
    project, phase 3 then became the second phase, as we were
    coordinating that project with the Mexican Government, and then
    we have also received funding for phase 2. So all three phases
    have been funded, and they are in various stages of
    development.
        Calexico is a primary--primarily--excuse me--on San Ysidro,
    the notable thing about that facility, it is the busiest land
    port of entry in the world. Calexico is primarily a facility
    for the transmission of agricultural projects between the
    United States and Mexico. The funding for those two projects--
    phase 1 has been provided in the President's budget. The
    request for fiscal year 2017 is to provide funding for phase 2.
    Alexandria Bay funding has been provided in fiscal year 2016
    for the first phase of that project, and the expectation is in
    fiscal year 2018 the remaining second phase funding request
    will come in for that work, as well.
        Mr. Barletta. Thank you. Mr. Schied, as major expansions
    and improvements come online at some of the busiest border
    stations, is CBP able to keep pace, from an equipment and
    staffing standpoint? And how does CBP ensure the infrastructure
    we are building will actually be fully staffed and equipped?
        Mr. Schied. So thank you. So CBP is--we get the timeframe
    for these projects, we work within our appropriations process
    to make sure that the requisite number of staff get included in
    CBP's budget request. CBP's--Congress generously provided a
    couple of years ago 2,000 additional officers for CBP. We have
    had a certain challenge hiring those officers, but we are
    making substantial progress to hiring up to the congressional
    floor.
        And in the future, as these major projects come on,
    especially the types such as San Ysidro, we will work into our
    budget request the staffing so that we can keep those lanes
    open. Obviously, having the lanes open is critical to the
    effective use of that facility.
        Mr. Barletta. Thank you. Mr. Gelber, you highlight in your
    testimony the importance of alternative resources such as
    donations from non-Federal and private sources. But, as you
    point out, donations are not free. How does GSA evaluate the
    total cost of a real property donation to determine if it makes
    sense for the taxpayer?
        Mr. Gelber. We look at what the long-term costs would be to
    accept a donation. So when some entity is providing us either a
    facility or land, we look at what it would cost to operate and
    maintain that infrastructure. We work very closely with CBP to
    ensure that whatever staffing resources would be required are
    also factored in to the equation.
        So again, it is an evaluation of, potentially, the 10-, 20-
    , 30-year costs of accepting what on the surface may be a free
    thing.
        Mr. Barletta. And this is for both Mr. Gelber and Mr.
    Schied.
        Language pending as part of the Border and Maritime
    Coordination Improvement Act makes clear the donations can only
    occur on a targeted, limited basis, limiting the total value of
    donations to $50 million. Because there are costs of
    maintaining and operating donations, P3s should not be viewed
    as a replacement to the Federal responsibilities.
        Can you talk about what you are doing to ensure there are
    proper limitations on the use of the donations?
        Mr. Gelber. I can start. Again, our primary concern is to
    ensure that while the entity--the thing that has been given to
    the Government is purported to be free, that the long-term
    costs of operating and maintaining that thing is, in fact, a
    manageable amount. And that is, it is suitable for the budget
    of the facility.
        There have been donation attempts where individuals or
    entities have wanted to donate a property to us that we would
    then have to lease, for instance, and that isn't a donation, it
    is just a long-term contractual arrangement that the Government
    would be entering into, and we are not interested in doing
    that.
        So again, the key issue for GSA is does the thing that is
    being given to the Government meet the needs of the Federal
    agencies that are going to use it? And, if that is the case,
    what are the long-term costs of that thing? And if those costs
    aren't appropriate, can't be budgeted for, then the GSA would
    not recommend accepting the donation.
        Mr. Schied. I think, from the CBP perspective, one of the
    critical elements that we look at is the operational utility of
    the potential donation. I think as you, Chairman, mentioned in
    your opening statement, the long-term cost of these facilities
    is going to be in operations and maintenance, and particularly
    the staffing. So something that might be free, if it expands
    our capacity beyond and we are having to rob Peter to pay Paul
    from an operational standpoint, then we have got to be careful
    about what it is that we accept.
        I think, as we go through these processes, you know, from
    our first round of donations, I think we saw--the ones that we
    accepted were relatively modest projects. I think a common
    theme of them is that they improved operational efficiency at
    the ports of entry, and I think that is exactly the kind of
    project or projects that we are looking for.
        Mr. Barletta. Thank you. I will recognize Ranking Member
    Carson.
        Mr. Carson. Thank you, Chairman.
        Mr. Schied, in your testimony you discuss how some land
    ports of entry were built over 70 years ago, and the ports of
    entry constructed as recently as 15 years ago are not able to
    accommodate the growing demands of additional processing
    capacity, new security requirements, or even enforcement
    technologies.
        Sir, have design requirements evolved in the last 15 years?
    And how are they being incorporated into ports of entry that
    GSA is constructing today?
        Mr. Schied. Certainly. So I would venture to say that 15
    years ago there was very little in terms of design standards
    for the ports of entry. I think that has been one of the
    successes between the relationship with CBP and DHS--or CBP and
    GSA, that in the past 10 years or so we have identified
    standards for ports of entry.
        From CBP's perspective, that is of interest because we like
    to have a certain degree of interchangeability in the
    facilities. Officers will move from facility to facility, even
    within a particular day. And so, having a certain
    standardization is helpful for us from that standpoint.
    Certainly for the projects that we own, we find that it is more
    economical to be able to build off of a particular standard,
    rather than essentially recreating each project from scratch.
        Mr. Carson. Mr. Gelber, there has been much discussion
    today about the pilot donation acceptance program. Does GSA
    envision this program growing in scope? And how many donations
    have actually been executed?
        And also, what are the lessons learned since this pilot
    commenced?
        Mr. Gelber. I think the key lesson learned--if I could
    answer the latter part of your question first--is the ongoing
    need which we have demonstrated for GSA and CBP to closely
    collaborate on reviewing these items. And we do that on a
    regular basis.
        For the fiscal year 2015 cycle, three donations were
    accepted over--I believe eight were submitted. Many more may
    have been cleared. The process is CBP reviews them first and
    then GSA and CBP review those that have made the initial
    screening together. Two are in the cities of Donna and Pharr,
    Texas, and there the provision is for additional inspection
    booths and some additional inspection lands. In El Paso, Texas,
    the provision is for a--to remove a traffic--two traffic
    medians that are currently obstructing traffic.
        So these are relatively modest changes to the facility, but
    they still need to be looked at to ensure that when that
    construction occurs, it is done in a fashion that is
    appropriate and doesn't create a problem for the Government in
    the long term.
        And so, we view the donation program as an opportunity to
    assist CBP meet its mission requirements at smaller stations.
    Larger infrastructure improvements are more challenging and
    require greater attention by the Government and, as such,
    haven't seen the large-scale donations that we have seen in the
    donation program.
        Mr. Carson. Thank you, gentlemen. Mr. Chairman, I yield
    back.
        Mr. Barletta. Thank you. The Chair recognizes Mr. Costello
    for 5 minutes.
        Mr. Costello. Thank you, Mr. Chairman. To both the
    gentlemen, depending on the proposed infrastructure project,
    the Department of State often times must also issue permits.
    And the question becomes what are you doing to ensure that
    proposals considered under the pilot program are in accord with
    the State Department's project, and how are you coordinating
    with the Department of State as it may be applicable on the
    front end to ensure that there are no delays to the project as
    a result of Department of State requirements somewhere along
    the line.
        And if you have experienced any delays along the line, do
    you have any recommendations in order to--how we might be able
    to get the Department of State to be a bit more accommodative,
    if that question may be applicable?
        Mr. Gelber. If I could start, the primary involvement of
    Department of State is the issuance of what is referred to as a
    Presidential permit, which authorizes the construction of a
    border station, a land port of entry.
        For an existing land port of entry, the State Department is
    not engaged, because the facility already exists and a
    Presidential permit has been provided. If there is no planned
    change to the nature of the border crossing, then the
    Department of State would not be engaged in the review of the
    donation. So when the State Department is engaged, it tends to
    be, again, for a larger project that has been subject of much
    discussion over numerous years because the creation of a new
    border crossing is a fairly involved process, involving two
    national governments, State and local governments, as well.
        So we have had--GSA's experience is a very productive
    relationship with the State Department when there is a need for
    the issuance of a Presidential permit, which would be when a
    new station is being created.
        Mr. Schied. I don't have much to add. Obviously, one of the
    important--more so, I think, than coordination with the
    Department of State, from an international standpoint, is with
    the counterparts in the foreign government, just to make sure
    that any changes to the American side of the infrastructure are
    in--generally, in concert with ongoing projects on either the
    Canadian or Mexican side.
        Mr. Costello. Thanks. I will yield back.
        Mr. Barletta. I want to thank both of you for your
    testimony today. Your comments have been helpful to today's
    discussion, and we will now move on to our second panel.
        [Pause.]
        Mr. Barletta. Thank you. On our second panel today we have
    Mr. Gary Gallegos, executive director, San Diego Association of
    Governments and also representing the Coalition for America's
    Gateways and Trade Corridors; and Mr. Sam Vale, chair of Public
    Policy Committee, Border Trade Alliance.
        I ask unanimous consent that our witnesses' full statements
    be included in the record.
        [No response.]
        Mr. Barletta. Without objection, so ordered. Each of you is
    now recognized for 5 minutes.
        Mr. Gallegos, you may proceed.

       TESTIMONY OF GARY GALLEGOS, EXECUTIVE DIRECTOR, SAN DIEGO
      ASSOCIATION OF GOVERNMENTS, AND BOARD MEMBER, COALITION FOR
    AMERICA'S GATEWAYS AND TRADE CORRIDORS; AND SAM F. VALE, CHAIR,
             PUBLIC POLICY COMMITTEE, BORDER TRADE ALLIANCE

        Mr. Gallegos. Well, good morning and thank you, Chairman
    Barletta and Ranking Member Carson, for having us here this
    morning. And thank you for holding this hearing today to
    discuss the growing importance of utilizing innovative funding
    strategies to implement critically needed improvements along
    the United States border.
        Today's fiscal environment requires strategic investments
    in border infrastructure that, you know, maximize limited
    resources and incentivize what we would call leveraged
    partnerships. I appreciate the opportunity to testify today on
    the unique funding or financing approaches that we in San Diego
    are exploring to help provide the need to safely and
    efficiently move people across our border crossings with
    Mexico.
        Today I am not only representing the San Diego Association
    of Governments, but also representing the Coalition for
    America's Gateways and Trade Corridors. SANDAG serves as a
    forum for regional decisionmaking in San Diego County that
    incorporates all 18 cities and the county government along the
    U.S. border, where we have a combined population of a little
    over 5 million people. We are also the federally designated
    MPO, or metropolitan planning organization for the San Diego
    region.
        And in my capacity as executive director of SANDAG, I am
    proud to serve as a board member of the coalition, a diverse
    coalition of more than 60 public and private organizations
    dedicated to increasing Federal investment in America's
    multimodal freight infrastructure. The coalition works to bring
    national attention to the needs of the U.S. multimodal system
    and to educate Members of Congress and the public on the need
    to develop consensus for Federal investment policy that
    supports intermodal connectors, trade corridors, freight
    facilities, and gateway access.
        I would like to ask if we could advance a couple of slides
    to give the committee some perspective on the region context.
        [Slide]
        Mr. Gallegos. We could go to the next one, please. Click
    through all of those.
        [Slide]
        Mr. Gallegos. What this tries to do is show that, on the
    California and Mexico border today, we have seven border
    crossings. Four of those are in San Diego. As was highlighted
    in the earlier panel, San Ysidro is known as the busiest
    international border crossing in the Western Hemisphere,
    literally millions of pedestrians and vehicles cross each year.
    Otay Mesa is our major commercial gateway for international
    trade between California and Mexico, and it serves over 800,000
    trucks annually.
        Land border crossings like these are facing rising
    passenger and commercial traffic levels and congestion, as a
    result of increased international trade and levels of personal
    travel. Border crossings are a source of our economic mobility
    for our region, as well as the Nation. People and goods
    traverse our vibrant binational region daily.
        However, due to the current 1- to 3-hour border wait times
    that occur daily, this represents lost economic opportunities
    and impacts our economy in a negative way. As a result, in 2005
    SANDAG launched an initiative to innovatively plan and finance
    a state-of-the-art border crossing which we will refer to as
    Otay Mesa East.
        Can you go to the next slide?
        [Slide]
        Mr. Gallegos. So, recognizing limited Federal resources
    available to implement new border crossings, it was determined
    that a new approach to financing border infrastructure
    improvements was needed. SANDAG has partnered with the
    California Department of Transportation, also known as
    Caltrans, in trying to develop this new border facility.
        In order to facilitate this new financing approach, State
    legislation was passed that authorizes SANDAG to issue bonds
    for acquisition, construction, completion of transportation
    facilities, and to impose tolls and user fees for the use of
    the State route that would lead to the new border crossing.
        Under this strategy, the region will capitalize on its
    experience and strength with tolling. SANDAG has been involved
    in variable tolling on Interstate 15 since 1996. We believe a
    variable tolling approach will not only serve as a source for
    new revenue for new border crossings, but will also serve as a
    mechanism for managing demand, which we think is important.
        By utilizing SANDAG's financial authorities, we will be
    able to maximize public investment in the port of entry by
    utilizing toll revenues and then hopefully being able to
    leverage those with State, Federal, and local dollars. This
    would permit us to develop a new port of entry faster than
    following traditional funding processes.
        Based on estimates, coupled with increased capacity and
    higher levels of service, we estimate that this new port of
    entry would generate a little over $4 billion over a 40-year
    period. This toll revenue would allow SANDAG to underwrite
    about $650 million worth in bonds that could be used to pay for
    the new facility.
        This vision for the 21st-century border will decrease
    dependency on Federal dollars by focusing on new partnerships
    that help leverage the Federal dollars, establish a
    transportation demand tool that will help improve the
    efficiency of our border crossings, implement a border wait
    time detection system that would allow for a statewide--or a
    systemwide approach, and to managing traffic congestion at the
    border, something that doesn't happen today. And it would also
    allow for improving roads on both sides of the border that make
    our system more efficient.
        We believe that this new border crossing will provide much-
    needed traffic relief and serve as an economic engine for our
    region and the State.
        Go the next slide.
        [Slide]
        Mr. Gallegos. So I wanted to use this slide to illustrate
    some of the progress we have made today. We have managed to
    leverage about $150 million of State and local dollars with
    about $286 million in Federal dollars. And what you see there
    in magenta, that first section has recently been completed and
    is now open to traffic. And the sections in blue and brown are
    the ones we are working on, and we hope to have those at least
    to sign and ready to go to construction by 2018, at the
    earliest.
        You can go to the last slide.
        [Slide]
        Mr. Gallegos. And so, let me close by saying that SANDAG,
    as well as the Coalition for America's Gateways and Trade
    Corridors, are delighted to have this opportunity to address
    critical border issues of border station construction and look
    for ways to maximize and leverage dollars.
        And I also want to take this opportunity to thank the
    Members of Congress for the last transportation bill. For the
    first time it starts really addressing dollars for freight, and
    helps us hopefully maintain the competitive edge that I think
    this country has globally.
        So with that, Mr. Chairman, I want to thank you, and I
    would be pleased to answer any questions you may have.
        Mr. Barletta. Thank you for your testimony.
        Mr. Vale, you may proceed.
        Mr. Vale. Chairman Barletta and Ranking Member Carson and
    members of the subcommittee, my name is Sam Vale, and I am
    testifying on behalf of the Border Trade Alliance. We also are
    part of the South Texas Assets Consortium, which is a
    participant in the 559 Program, and we do operate a small,
    private port of entry. For 30 years the BTA has been providing
    analysis and advocacy for a U.S.--Canada and U.S.-Mexico border
    issues.
        We will start with a fact: Adequate infrastructure produces
    less congestion and more efficient cross-border trade, as well
    as generates taxable income. Staffing of the inspection
    agencies has admittedly been deficient, primarily because of
    challenges on the hiring processes. And we understand that they
    are looking for solutions to get this taken care of in the
    future.
        The average age of the border station is around 40 years,
    but the commercial truck inspection stations and infrastructure
    are woefully inadequate, and we need to start focusing on that.
    That is an important part of job creation within the United
    States.
        For example, we have done a $250 million upgrade at the
    Mariposa Port of Entry in Arizona for fruits and vegetable
    imports, but yet today there is not enough staffing to keep all
    the new lanes operational all the times that they should be.
    This project was completed in 2014, and we are--still haven't
    got the staffing.
        In south Texas we are growing dramatically in manufacturing
    and produce. And all of this could have been predicted 10 years
    ago if we had looked at the infrastructure being built in
    Mexico.
        We are--our recommendation is that, with future border
    station construction, that when it is being planned, that the
    committee also needs to work with your colleagues in the
    committees that have oversight over CBP staffing, Federal and
    State highways, and truck inspections, because you all got to
    be on the same page, because it doesn't come to fruition until
    you get there.
        The section 560 and 59, it is a viable, creative option to
    assist the Government in some of its expenses. The donation
    acceptance program is great, but there is two ideas that must
    drive them. One is flexibility and the other is return on
    investment. Flexibility is a must, particularly in the design
    processes that is going through.
        The agencies must demonstrate a willingness to explore new
    ideas that are different than what they are used to seeing. To
    be blunt, return on investment--real estate investors and the
    international trade communities are not charities. They are
    looking for something in return. The Government should be
    prepared to demonstrate the financial upside for private and
    local public sector participation.
        CBP appears to be responding to flexibility in the small-
    scale donation acceptance program, but they have recently
    announced they are even promising 60 to 70 percent improved
    processing times in the applications.
        Not all border ports of entry need major infrastructure
    overhauls or dramatic staffing upgrades. The BTA supports pilot
    projects that have taken place in various parts of the country,
    and we support the pre-clearance of the Buffalo-bound cargo,
    where the inspection takes place on the Canadian side of the
    border and then comes to the U.S. We also support pre-clearance
    on the Mexican border with the United States. Laredo, Texas,
    has a pilot there. Otay Mesa, California, has pilots going. And
    there is even one in an electronics plant in Juarez, Mexico.
        However, on the other hand, we need to avoid infrastructure
    agreements with States and foreign governments that lead to
    ongoing financial commitments. The BTA acknowledges that there
    is a significant debate over how to construct a new span across
    the Detroit River connecting Detroit in Michigan and Windsor,
    Ontario. We are not going to get into the details, because that
    is another group of issues, but we do have deep concerns over
    any agreement between governments to construct new bridge ports
    of entry requiring ongoing staffing commitments from CBP and
    other agencies without deliberation and appropriations from the
    Congress. Should not be done.
        The 559 programs have benefitted on the southern border,
    because we are living up to our diplomatic notes, primarily
    using donated acceptance program funds. McAllen, Texas, donated
    the land for the port. Then they later have donated land in
    Mexico and helped build a road in Mexico. They built lanes on
    the U.S. side. Now they are building--they are going to be
    building a border station for truck inspection on the U.S. side
    on land that they had already donated.
        So, there are a lot of opportunities. That is a great
    example of how you do the right thing. But we need to
    understand that this is--it is--in a perfect world, the
    Government should be able to finance all of these activities,
    and we don't have that perfect world today.
        But today we do have an option. We can either choose to go
    forward with something that would be innovative and creative,
    or not. But we have a choice before we just lost
    competitiveness and tax dollars. So we are very happy to be
    part of that support group.
        There is a role for the public and private sector--local
    public and private sector and the donation acceptance programs.
    Investors have to have confidence. We think you have to look
    real seriously at the large projects, because you are not going
    to get funding on some of these projects, and you can project
    it 30 years, but that could easily be a 50-year if you are
    talking about certain stretches of highways and access to how
    you have to function, because the border station is no good if
    it doesn't--it is like a bridge halfway there if you don't have
    all the ingress and egress routes put into what needs to be
    done.
        The Border Trade Alliance appreciates the opportunity to
    testify. We look forward to finding solutions to our border
    challenges. I will answer any questions you may find.
        Mr. Barletta. Thank you for your testimony. I will now
    begin the first round of questions limited to 5 minutes for
    each Member. If there are additional questions following the
    first round we will have additional rounds, as needed. I will
    start.
        Mr. Gallegos, the committee has authorized a three-phase
    project at San Ysidro port of entry. How will these
    improvements, when fully implemented, help address the capacity
    issues at that border station?
        I went down, actually, to see the station. So how will it
    address that?
        Mr. Gallegos. So I think first we should acknowledge the
    world's busiest border crossing. And so, the fact that they
    have, you know, double-staffed the booths should allow us to
    get, hopefully, more throughput production out of the new
    border crossing. And I think the steps that are taking--that
    are still to come in phase 3 and--because the last panel
    highlighted phase 3 became sort of phase 2, and phase 2 became
    sort of phase 3.
        But the one thing that needs to be done and done as soon as
    possible in the next two phases is to improve the pedestrian
    experience. We have pedestrians who are taking several hours
    and cross and facilities that are less than adequate to handle
    the pedestrian movement. But we are optimistic that when phase
    2 and 3 come, that all that is going to improve.
        We should also highlight, Mr. Chairman, for the committee
    that we have worked closely in partnership with GSA and CBP to
    bring local dollars forward to also make key transit
    connections in a key intermodal center that will allow the
    local transportation system to integrate with the Federal
    investment that is being made. And that is something that I
    think we got to work harder at doing better in the future, that
    we, you know, not only look at the border crossing itself, but
    what are the connections that are necessary to make them work
    on both sides of the borders, both on the Mexican and the U.S.
    border.
        Mr. Barletta. Yes, thank you.
        Mr. Vale, as you point out in your testimony, even if we
    build the needed infrastructure, without the ability of CBP to
    staff and equipment for the facility, we are not going to see
    much improvement.
        How critical is it that solutions to staffing and equipment
    be identified as GSA and CBP evaluate their priorities for
    infrastructure needs?
        Mr. Vale. It is absolutely vital. That is like--it is like
    two parts of the same machine. You can't--it doesn't work one
    without the other.
        The facilities can--are expensive to build. They are
    expensive to maintain. And if you are not using them, you are
    not getting your return on investment as a government. You are
    not getting your tax dollars. And we really focus right now a
    lot on the commercial traffic, because we are being overwhelmed
    on the southern border. The Canadian border is down 25 percent
    and we are up 25 percent and it is growing.
        And it is not that people are not crossing in one place or
    another, it is that the pie is getting bigger, and there is
    more and more manufacturing going on in Mexico using U.S. parts
    to do the manufacturing than ever before. And it is growing.
    They have been--in one part of Mexico they call them the Bajio
    Central States. They have had $16.5 billion of foreign
    investment in the past 3 years, with another 16.5 projected for
    the next 3 years. This is all foreign money going in there to
    utilize qualified workforce, costs that are--and the market is
    the United States of America.
        Mr. Barletta. Mr. Vale, you offer some important
    suggestions and notes of caution in your testimony when it
    comes to private donations. You suggest the more nimble and
    focused approach for the P3 program, and caution us about
    ongoing financial commitments that may not be apparent in
    donated property.
        How do you think the process can be more streamlined in
    evaluating potential P3s?
        Mr. Vale. Well, one of the things you have to do is have a
    more accurate predictability of the growth cycles. Now, we have
    been visiting with some major manufacturings lately, and they
    said under the right circumstances they could make data maybe
    through this--southern California creates--make it available to
    have it sanitized, because these would be confidential business
    plans. But these business plans, up to 3 years, are 85 percent
    accurate in what they are projecting.
        If we can get that information into the work staffing model
    for CBP that will also share it with the GSA of what they are
    going--facilities, that is the innovative-type processes we
    need to go through, instead of taking a historical look at it,
    and linear projections forward. Those are part of the puzzle,
    but they are not the best solution. It is to know what business
    is planning in produce. Who drives produce? The American
    consumer. Who knows them best? The big box buyers, not the
    farmer, not the trucker, but the guy who sells it to the
    public. We need to get them in the picture.
        Mr. Barletta. Thank you. And I recognize Ranking Member
    Carson.
        Mr. Carson. Thank you, Chairman.
        Mr. Vale, there has been a lot of discussion today about
    how land ports of entry are basically outdated due to an
    increase in trade, post-NAFTA and subsequent investments in
    infrastructure by the Mexican Government. Who is responsible
    for tracking the infrastructure investments made by either the
    Canadian and Mexican Governments? And do you believe it is even
    feasible to coordinate those activities between countries to
    ensure that land ports of entry are not overwhelmed, due to
    mismatched investments along the border?
        Mr. Vale. I don't know if the governments do a good job of
    it, because they many times have overarching--what they think
    of are more important and sexier items to deal with. But the
    bottom line is that business does, because the business
    investor has to have a return.
        We think that if you would have looked in Mexico, for
    example, you saw them constructing these highways. You saw them
    cross--they built two transcontinental roadways connecting to
    the border. They also built the highest--and these are not
    overnight projects--they built the highest suspension bridge in
    the world. That changes flows and patterns. The dollar and the
    investment climate in the world changes it.
        Somebody needs to be looking at it. I know business is
    looking at it. We look every day at it. We are working on--2
    years ago we were looking at Mexico as an exporter of oil and
    hydrocarbons. Guess what? Today they are only producing 50
    percent of their hydrocarbon needs. Who is going to be selling
    it to them? Who has already started doing that? The United
    States.
        Mr. Carson. Yes.
        Mr. Vale. We are--in the smallest port in the country, we
    are now export oil tankers into--Mexican tankers going across
    the bridge into Mexico to deliver to their consumers.
        Mr. Carson. To that point, also in your testimony, Mr.
    Vale, you indicated that the CBP should be able to demonstrate
    the financial upside for a private-sector donation to the land
    ports of entry program.
        In your mind, what is the appropriate metric or even order
    of magnitude that the CBP should be targeting to even make a
    private-sector donation attractive?
        Mr. Vale. Well, it is maybe a little easier if you are
    talking to a local public sector entity, a city or a county or
    a State government, because they have interests for their
    taxpayers.
        But even private business would like to know that there is
    going to be a receptive attitude to what they are trying to do,
    that they are not trying to force is down somebody's throat. It
    is going to have to meet all the security requirements,
    whatever is needed there, but there has to be understood that
    this is something good for all the parties. And sometimes you
    don't get that reception, it is more like pulling teeth.
        Mr. Carson. Yes. Lastly, Mr. Gallegos, what roles do you
    believe that the local and State governments should have in
    developing infrastructure plans for land ports of entry? And
    how can local and State governments augment Federal efforts to
    expand capacity at land ports of entry?
        Mr. Gallegos. Well, first of all, thank you for the
    question. And I think the innovative approaches that we are
    proposing is one way to do that. But another, I think, key
    component for us has been the development of border master
    plans. And in many ways, they are similar to general plans that
    cities have, so that if you understand how lands proposing to
    be zoned to be used on both sides of the border, both on the
    Mexican side and the U.S. side, that those land use plans then
    become the drivers for, you know, the businesses, the
    investment, the growth that is going to happen in those
    borders.
        And so, I think local governments working with the State,
    working with the Federal Government on both sides of the
    border, can develop these master plans as a planning tool to
    allow governments at all three levels on our side of the border
    and governments on the Mexican side of the border to do a
    better job of planning and forecasting what our needs are going
    to be in the future. And I think these border master plans are
    a fairly new phenomena. We haven't been doing them for a long
    time.
        Mr. Carson. Mr. Chairman, I yield back.
        Thank you, gentlemen.
        Mr. Barletta. Thank you.
        Mr. Vale, you expressed deep concerns about the proposed
    new bridge and border crossing in Detroit going forward without
    congressional appropriations. I also have concerns. And the
    House limited the donation program. To be clear, it cannot be
    used for this project.
        This crossing and bridge is estimated to cost several
    billion dollars and require 100 or more CBP staff. Where will
    they come from? And how could this impact other crossings on
    the northern and southern border?
        Mr. Vale. The thing that jumped out at us was a $100
    million commitment for year one and $50 million every year
    thereafter for staffing alone. Good grief, we have to beg,
    borrow, and steal to get a guy to work, and every guy that we
    get to work on the southern border produces tremendous amount
    of economic benefit.
        Why would you be doing that on a border that, right now, by
    their own admission, is decreasing its exports to the United
    States, or our imports are decreasing, which means you need
    less staffing and better utilization of the existing staffing?
        Sometimes we forget that we have to look at international
    bridge ports as a system, and not this community versus that
    community. And the number of lanes that are out there may be
    built, but if they are underutilized we are wasting
    infrastructure.
        And oh, by the way, there is not a bridge on the border
    congested 24 hours a day.
        Mr. Barletta. Well, I want to thank you both for your
    testimony today. Your comments have been helpful in our
    discussion. If there are no further questions, I would ask
    unanimous consent that the record of today's hearing remain
    open until such times as our witnesses have provided answers to
    any questions that may be submitted to them in writing, and
    unanimous consent that the record remain open for 15 days for
    any additional comments and information submitted by Members or
    witnesses to be included in the record of today's hearing.
        [No response.]
        Mr. Barletta. Without objection, so ordered.
        I would like to thank our witnesses again for their
    testimony today. If no other Members have anything to add, this
    subcommittee stands adjourned.
        [Whereupon, at 10:52 a.m., the subcommittee was adjourned.]

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