[Senate Hearing 114-]
[From the U.S. Government Publishing Office]


 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2017

                              ----------                              


                        THURSDAY, MARCH 3, 2016

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 10:30 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Richard C. Shelby (chairman) 
presiding.
    Present: Senators Shelby, Murkowski, Collins, Lankford, 
Mikulski, Feinstein, Shaheen, Coons, Baldwin, and Murphy.

                         DEPARTMENT OF COMMERCE

                        Office of the Secretary

STATEMENT OF HON. PENNY PRITZKER, SECRETARY

             OPENING STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. The subcommittee will come to order. 
Welcome to today's hearing of the Commerce, Justice, Science, 
and Related Agencies Appropriations Subcommittee.
    This morning, we will hear from the Secretary of Commerce, 
Penny Pritzker, on the Commerce Department's fiscal year 2017 
spending proposal. Madam Secretary, we welcome you and we thank 
you for being here.
    The Department of Commerce is charged with serving several 
critical functions for our Nation. These include operating 
weather satellites and forecasting severe storms, enforcing 
trade laws to ensure American businesses can compete on a level 
playing field, working with distressed communities to spur 
economic development, and properly managing our Nation's 
fisheries.
    The Department's 2017 request totals $9.7 billion. This is 
$500 million above the 2016 enacted amount and includes some 
significant steps forward.
    The largest increase in the Department is $264 million of 
additional funding for the Census Bureau as the agency 
continues to prepare for the 2020 Decennial Census.
    In light of the increased funding, I am concerned by the 
Commerce Inspector General's assessment that the Bureau 
continues to face challenges in meeting its cost savings goals, 
and still needs to develop a defined schedule with key 
milestones as the 2020 Census approaches.
    In another area, the planned funding decrease for our next 
generation of satellites, while maintaining the construction 
tempo, is a positive step forward.
    However, I am discouraged by the delayed launch of the 
``GOES-R'' satellite from October 2015 to October 2016. As the 
Government Accountability Office continues to point out, the 
potential for gaps in weather data coverage are real and 
serious for both flagship satellite programs.
    I am disappointed that the Department has failed to fully 
adopt GAO's recommendations to mitigate program risk, which I 
see as a symptom of the National Oceanic and Atmospheric 
Administration's (NOAA) lack of commitment to launch these 
satellites on time and on budget. Madam Secretary, I hope you 
can discuss today how the Department's 2017 budget is 
addressing these satellite launch and construction delays.
    The Department also takes the lead role in managing our 
Nation's fisheries. I have grave concerns about NOAA's 
management process that has resulted in fewer days for 
fishermen to be out on the water. NOAA's mismanagement of 
fisheries, like red snapper in the Gulf, has severely damaged 
and diminished the public's confidence in NOAA's ability to do 
the job.
    To address these shortcomings, the subcommittee has 
directed NOAA to count fish where fish live, and commission 
independent studies comparing the status of fish stocks with 
NOAA's internal data.
    The subcommittee has also provided strong funding for at-
sea monitoring while pushing NOAA to expand its adoption of 
electronic monitoring to increase coverage and reduce human 
observer costs. The subcommittee sees NOAA as an agency that is 
slow to adopt new technologies, and even the Commerce Inspector 
General has noted that NOAA has not yet developed a nationwide 
strategic plan for electronic monitoring.
    I look forward to hearing later today from you how the 
Department's 2017 budget would begin to provide a system that 
is more accountable to the fishermen and the businesses it 
affects.
    NOAA's request also includes some unexpected changes from 
last year, with the most significant being the Department's 
2017 request for a regional class vessel as a top need for 
recapitalizing NOAA's fleet.
    Madam Secretary, last year, you testified here that NOAA 
needed, and I will quote your words, ``A high endurance, long-
range, ocean survey vessel,'' and as a consequence, this 
subcommittee invested $80 million to begin new vessel 
construction in 2016.
    Suddenly, however, reducing the proposed size of new vessel 
construction in 2017 is not only a surprise departure from the 
administration's expressed need, it also changes the proposed 
use of the 2016 funds.
    The request also raises serious questions about how NOAA 
will be able to effectively conduct its at-sea operations in 
the future.
    I will have further questions on this matter, and I hope 
you can address that today.
    Finally, the Department's 2017 request would continue 
building out the National Network for Manufacturing Innovation. 
This subcommittee provided funding for the Department to 
establish one institute in 2016, with the understanding that it 
would be established through an open competition, encompassing 
all manufacturing-related research areas. Unfortunately, open 
competition was not expressed in the Department's Notice of 
Intent that was issued last December.
    I am concerned that the 2017 request will result in the 
Department trying to pick winners and losers through another 
closed selection process.
    I look forward to hearing your views on these matters, and 
working with our subcommittee members to address the concerns 
in the bill.
    Senator Shelby. Senator Mikulski.

                STATEMENT OF SENATOR BARBARA A. MIKULSKI

    Senator Mikulski. Thank you very much, Mr. Chairman. Of 
course, we welcome Secretary Penny Pritzker to present the 
Department of Commerce's budget.
    Before I make comments to the Secretary, I would like to 
congratulate you on winning your recent primary, and I 
understand they call you ``Landslide Shelby'' in Alabama as of 
this morning.
    Senator Shelby. Thank you.
    Senator Mikulski. It was a well-deserved victory on your 
behalf. Also, I just bring to everyone's attention that today 
there are also two other hearings going on, Labor, Health and 
Human Services, and Military Construction and Veterans Affairs. 
Senator Cochran has set a very quick paced schedule so that we 
can follow regular order hopefully at the end, and I am sure 
members will be joining us.
    Madam Secretary, first of all, just know we are really 
proud of you. I am very proud of you and the job that you are 
doing. You have come to the Department of Commerce after we 
went through three Commerce secretaries and acting secretaries. 
I think Dr. Becky did a good job.
    You have really brought not only stability to the agency, 
but your keen business skills, management oversight, and as 
expected by the President and the American people, you are the 
American Ambassador to American business, and also to foreign 
business.
    We think that what you have done there focusing on open for 
business in jobs and the economy, promoting U.S. business and 
products overseas where we could actually export products, 
bringing investments to America, distinguished companies 
investing so we could together grow our jobs, and helping 
American companies with the challenges of today, many of which 
are related to things like cyber criminals, and how we can help 
solve real world problems to help them.
    Then doing day to day things, like the fabulous weather 
service that we have worked together on a bipartisan basis to 
memorize.
    I am very proud of the Commerce agencies in my own State: 
NOAA is headquartered, the National Institute of Standards and 
Technology (NIST) is headquartered, and Census is 
headquartered. It is not about trophies, it is about looking at 
what they do every single day. I will comment on them as we go 
along.
    I also want to thank the chairman for once again including 
as part of our record the Inspector General's review of those 
things that are hot topics and hot spots in terms of managing.
    I know you take the job very seriously, particularly of 
oversight. The Census has plagued us. Senator Shelby and I 
began in the House Energy and Commerce. Every Census seems to 
have some kind of techno boondoggle. We would hope that this 
time we not only make sure that every American counts and every 
American is counted, but we do it in a way that we really make 
the most effective use of taxpayer dollars.
    There is the issue of satellites. You were in the satellite 
business. We cannot have weather without satellites, and again, 
how we do it in a cost effective way, and also a 
technologically productive way.
    We look at the National Institute of Standards, an agency 
that is often overlooked and undervalued, which if America is 
going to do business in the global workplace, we have to have 
American standards, not China standards.
    That agency over there, dear colleagues, does everything 
from mammogram quality standards so that our radiology 
equipment meets the standards of the scientific community, and 
it also is looking at earthquake resilient buildings, why the 
World Trade Center fell, how to do all that, and at the same 
time, it is now helping the private sector have a civilian 
agency to work on cybersecurity problems, where the private 
sector working with the Department of Commerce brings together 
expertise to do that.
    The chairman here is in the Banking Committee. Well, there 
are the big banks, the big banks, huge, huge, but anyway, the 
fact is that in my own home State, we have small savings and 
loans. We have credit unions. They need to know how to protect 
themselves, and they will be able to do that.
    Again, we helped modernize the weather service so we now 
have the American model, not only the European model, again 
through a supercomputer, and then we also need to be able to 
look at some of these other issues.
    I know that we want to get on with the hearing, but the 
Commerce Department does so much to save lives, save 
communities through the weather service, every accurate 
prediction, one mile of evacuation costs $1 million, to the 
fact of what are we doing to promote jobs in the country 
through national manufacturing.
    Mr. Chairman, let's get on with the testimony. I could just 
extol the virtues of the Commerce Department, let's make sure 
we give them the appropriations they need.
    Senator Shelby. Madam Secretary, we welcome you again. You 
proceed as you wish.

                SUMMARY STATEMENT OF HON. PENNY PRITZKER

                 DEPARTMENT OF COMMERCE BUDGET REQUEST

    Ms. Pritzker. Thank you very much, Mr. Chairman, Vice 
Chairwoman Mikulski, and members of the subcommittee. Thank you 
for the opportunity to lay out the priorities of President 
Obama's fiscal year 2017 budget request for the Commerce 
Department.
    Building on your strong support over the last 3 years, this 
request will enable the Department of Commerce to serve as an 
effective voice of business in the Federal Government, continue 
our work with the private sector on policy development, and 
help firms of all sizes enter new markets.
    Our fiscal year 2017 budget request provides $9.7 billion 
in discretionary funding to support our core priorities under 
our open for business agenda, while also allowing us to make 
our Department more efficient.
    The agenda is focused in four key areas: promoting trade 
and investment, spurring innovation and entrepreneurship, 
gathering and acting on environmental intelligence, and fueling 
a data driven economy.
    Today, I want to highlight just a few key initiatives under 
each of these areas. First, the budget request will enable our 
Department to better serve American businesses as they seek to 
access the 96th percent of potential customers who live beyond 
our borders.
    Increasing trade and investment is critical to growing our 
economy. Nearly 10 million U.S. jobs are supported by exports. 
This budget request will allow us to expand the footprint of 
the foreign trade specialists who help American companies 
navigate exporting into new markets. It will strengthen our 
team's ability to enforce trade laws that protect U.S. 
industries from unfair trade practices, and ensure foreign 
governments' compliance with international trade agreements.
    We are also requesting funding to expand SelectUSA, the 
first ever whole of government effort to facilitate business 
investment to and within the United States.
    Second, the budget request will also increase investment in 
the National Network of Manufacturing Innovation, which was 
established to ensure America's global leadership in 
manufacturing.
    Each institute has an unique focus, but a common goal, to 
create, showcase, and bring new made in America capabilities 
and manufacturing processes from lab to market in the near 
future.
    The Department of Commerce oversees the network of seven 
existing institutes, and we have the unique authority to 
establish new institutes in technology areas selected by 
industry.
    Another key piece of our agenda is ensuring that 
communities and businesses have the information they need to 
prosper in a changing environment. This budget request supports 
the National Oceanic and Atmospheric Administration's core 
mission, to promote more resilient communities, including 
fostering healthy marine resources and improving forecasting 
accuracy and lead times for severe weather.
    To ensure NOAA retains a robust observational 
infrastructure, the budget also provides $2.3 billion to fully 
fund the next generation of weather and environmental 
satellites, including the Polar Follow-on satellite program.
    Finally, recognizing that data powers the 21st century 
economy, the Census Bureau is committed to achieving a 2020 
Census that is both accurate and efficient, with the goal of 
keeping the per household cost below that of the 2010 Decennial 
Census.
    Investing wisely now in preparation for the 2020 Census 
will potentially save the American taxpayers more than $5 
billion. To achieve these savings, this request provides $1.6 
billion to develop, test, and implement innovative design 
methods.
    The fiscal year budget request furthers priority programs 
that have a strong return on investment for America taxpayers. 
Ultimately, these priorities are only a small piece of the 
Commerce Department's work to develop and implement policies 
that support economic growth, enhance our country's 
competitiveness, and strengthen America's businesses, both at 
home and abroad.
    I look forward to answering your questions today, and thank 
you for having me.
    [The statement follows:]
               Prepared Statement of Hon. Penny Pritzker
    Chairman Shelby, Vice Chairwoman Mikulski, and members of the 
subcommittee, thank you for this opportunity to discuss President 
Obama's fiscal year 2017 budget request for the U.S. Department of 
Commerce. The priorities included in the fiscal year 2017 budget 
request build upon the important investments you enacted in fiscal year 
2016 and I am grateful for your support.
    As the Secretary of the Commerce, it is my responsibility to ensure 
that the Department's resources are allocated to the highest priority 
programs and projects that provide the largest benefits for businesses, 
communities, and workers across the United States. With the $9.7 
billion in discretionary funding requested for Commerce in the fiscal 
year 2017 budget, I believe we can make significant progress in all of 
our key mission areas that we carry out on behalf of the American 
people.
    I'm proud that my Department has played such an integral role in 
creating 14 million jobs and helping to set the Nation on a fiscally 
responsible course, but I am cognizant of the immense challenges that 
remain in front of us. The funding in the fiscal year 2017 budget is 
designed to address those challenges by making critical investments in 
the following key areas: promoting exports and foreign investment; 
increasing research and development opportunities to foster 
technological innovations and the digital economy; strengthening 
entrepreneurship and the U.S. economy; fueling a data-driven economy; 
and supporting the environment and natural resources.
    At the same time, the fiscal year 2017 budget also reflects the 
difficult tradeoffs that were made to capitalize on ways to operate 
more efficiently and reduce costs.
    Our fiscal year 2017 budget request directly aligns with the 
Department's ``Open for Business'' Agenda, which reflects Commerce's 
unique role as the voice of business and the administration's focus on 
economic growth and job creation. Through the ``Open for Business'' 
Agenda, successful initiatives have been launched to help American 
businesses prosper in foreign markets, improve market access to make 
sure American companies are on equal footing when competing abroad, and 
leverage public-private partnerships to enable businesses and 
communities to make better use of Government data.
    None of our achievements would be possible without the support of 
the Congress and especially the members of this subcommittee. I look 
forward to working with you so that we can continue to build on our 
economic momentum and accelerate our growth both in the United States 
and around the world.
    Outlined below in greater detail are specific investments that we 
have prioritized in the fiscal year 2017 Department of Commerce budget:
                     promoting trade and investment
    The United States is the world's largest exporter and importer of 
goods and services, and the world's largest recipient of foreign direct 
investment. Increasing trade and investment is critical to growing our 
economy as nearly 10 million U.S. jobs are now supported by exports. In 
2015, the United States exported $2.23 trillion in goods and services 
and our exports are flourishing in worldwide markets from China to 
Brazil to Mexico.
    The fiscal year 2017 President's budget requests $521 million for 
the International Trade Administration (ITA), which is nearly an 8 
percent increase over the fiscal year 2016 enacted amount. This funding 
level will allow ITA to expand the presence of its foreign trade 
specialists, both overseas and domestically, as well as strengthen 
ITA's trade enforcement team.
    Within its topline, the budget includes $20 million for ITA to 
expand SelectUSA, which seeks to recruit foreign businesses to invest 
and create new jobs in the United States. Moreover, the Department of 
Commerce will serve as the host for the SelectUSA Investment Summit, an 
annual event that attracts thousands of international and national 
leaders from businesses, economic development organizations, 
government, and other industry stakeholders. This year's Summit is 
scheduled for June 19-21 in Washington, DC.
    Other funds will support ITA's efforts to make it easier for U.S. 
companies of all sizes to reach consumers who live beyond our borders. 
ITA is educating companies about markets opened by Free Trade 
Agreements and working with industries so they can overcome obstacles 
in foreign markets and take advantage of export financing options. At 
the same time, this budget will support ITA's efforts to vigorously 
enforce our trade laws, and protect American jobs by ensuring a level 
playing field for American companies.
    The President's budget also provides $127 million for the Bureau of 
Industry and Security (BIS), a $14 million increase over the fiscal 
year 2016 enacted level. These resources will augment BIS' ongoing 
domestic and international efforts to curtail illegal exports while 
facilitating secure trade with U.S. allies and close partners. The 
fiscal year 2017 request enables BIS to proactively engage with U.S. 
industries and foreign governments and companies and help them better 
understand and comply with complex regulations that govern U.S. trade 
and enforcement policies (such as the Export Administration 
Regulations).
                   spurring innovation and technology
    The budget increases investment in some of the Department's most 
effective programs to spur innovation and economic growth in the 
manufacturing sector.
    Launched in 2012, the Federal Government spearheaded a national 
effort to create public-private institutes focused on manufacturing 
innovation. The National Network for Manufacturing Innovation (NNMI) 
was established as a way to accelerate development and adoption of 
cutting-edge manufacturing technologies for new products that can 
compete in international markets. Each NNMI has a unique focus, but a 
common goal to create, showcase, and deploy new capabilities and new 
manufacturing processes.
    The $1 billion request in the budget for the National Institute of 
Standards and Technology (NIST) builds on this initiative. 
Specifically, $42 million is provided to sustain the first Commerce-led 
institute and launch two new institutes (in total, the President's 
budget request funds five new manufacturing institutes).
    Funding in fiscal year 2017 further supports NIST's efforts to 
accelerate research and development at its national laboratories to 
expand labs-to-market transfers of innovations in manufacturing and 
other technologies. In a separate-but-related effort, the budget 
invests $50 million in mandatory spending for a new competitive grant 
program within the Economic Development Administration (EDA) to 
incentivize partnerships between Federal Labs, academia, and regional 
economic development organizations enabling the transfer of knowledge 
and technologies from Labs to private industry for commercialization.
    An additional $141 million investment is proposed for the Hollings 
Manufacturing Extension Partnership (MEP), which focuses on expanding 
technology and supply chain capabilities to support technology adoption 
by smaller manufacturers to improve their competitiveness.
    The fiscal year 2017 budget request is responsive to pressing 
issues that require innovative and thoughtful solutions.
    Recognizing that the national and economic security of the United 
States depends on the reliable functioning of critical infrastructure, 
the budget focuses on improving the Nation's cybersecurity posture. 
This is an area of increased emphasis throughout the Federal 
Government. As more and more sensitive data is stored online, the 
consequences of attacks grow more significant each year.
    The President is establishing the Commission on Enhancing National 
Cybersecurity, comprised of top strategic, business, and technical 
thinkers from outside of Government--including members to be designated 
by the bi-partisan congressional leadership. The National Institute of 
Standards and Technology (NIST) will provide the Commission with 
support to allow it to carry out its mission.
    In addition, the National Telecommunications and Information 
Administration's (NTIA) fiscal year 2017 budget of $51 million will 
enable the agency to develop and implement policies to meet challenges 
related to Internet openness, privacy, security, and the digital 
economy. These resources will enable NTIA's BroadbandUSA to work with 
State and local governments, nonprofits, and researchers to overcome 
obstacles to increase broadband access and adoption in communities 
looking to expand their communications infrastructure.
    The fiscal year 2017 budget request demonstrates the 
administration's continued commitment to broadband telecommunications 
as a driver of economic development, job creation, technological 
innovation, and enhanced public safety. The President's broadband 
vision of freeing up 500MHz of spectrum (band) for commercial use, 
promoting broadband competition in communities throughout the country 
and connecting over 99 percent of schools to high-speed broadband 
connections through the ConnectED initiative will create thousands of 
jobs and ensure that students have access to the best educational tools 
available.
          strengthening u.s. entrepreneurship and the economy
    Entrepreneurship is a key driver of the economy and a pathway for 
millions of hard-working Americans to provide for their families. In 
support of that goal, the fiscal year 2017 budget provides for key 
investments in the U.S. Patent and Trademark Office (USPTO), the 
Minority Business Development Agency (MBDA), and the Economic 
Development Administration (EDA).
    The $3.2 billion request in fiscal year 2017 for the USPTO will 
help American entrepreneurs and businesses bring their innovations to 
the marketplace. Funded entirely by fees from their users, USPTO 
continues to lead America's innovation community by making it easier 
for American entrepreneurs and businesses to develop, protect, and 
scale their inventions. These breakthroughs help pave the way for new 
technologies and jobs.
    As the USPTO carries out its mandates under the America Invents 
Act, it remains focused on adopting policies and programs that embolden 
and strengthen the Nation's intellectual property system. USPTO 
recently opened four permanent regional offices across the Nation and 
will hire subject matter experts to reduce the backlog of unexamined 
patents while ensuring pending applications are reviewed expeditiously. 
USPTO also will implement administrative actions proposed by the 
President's Task Force on High-Tech Patent Issues and build an 
intellectual property system outfitted for the 21st Century.
    Another critical priority in fiscal year 2017 is to continue 
supporting the national growth of minority-owned U.S. businesses. The 
President's budget requests $36 million for the Minority Business 
Development Agency (MBDA), a $4 million increase from the fiscal year 
2016 enacted level.
    Minority-owned firms make a significant and valuable contribution 
to our economy and export at a higher rate compared to all U.S. firms. 
Additionally, with an eye on developing future leaders of America, $3.6 
million is targeted for a new MBDA Business Innovation for Young 
Entrepreneurs program. This program will create a coordinated approach 
to engage, educate and build capacity among young minority 
entrepreneurs through competitive grants in regions of the U.S. with 
high concentrations of minorities, youth, and unemployment.
    Finally, the budget focuses resources on supporting economic growth 
in American communities. The fiscal year 2017 request provides $258 
million for the Economic Development Administration (EDA) to support 
innovative economic development planning, regional capacity building, 
and capital projects. Within this amount, $20 million is included for 
the Regional Innovation Strategies Program to promote economic 
development projects that spur entrepreneurship and innovation at the 
regional level.
    EDA's budget includes a variety of assistance programs, such as: 
$35 million for Partnership Planning to support local organizations 
with their long-term economic development planning efforts and 
outreach; $50 million for Economic Adjustment Assistance aimed at 
critical investments such as economic diversification planning, and 
implementation, technical assistance, and access to business start-up 
facilities and equipment; and $85 million for Public Works 
infrastructure.
                     fueling a data-driven economy
    Data powers the 21st Century economy, and Commerce Department data 
touches every American and informs countless business decisions every 
day. The Census Bureau is committed to achieving a 2020 Census that 
delivers on the core mission to be as accurate as possible while 
keeping costs at or below the per-household cost of the 2010 decennial 
census. Streamlining, modernizing, and automating operations in 
preparation of the 2020 Decennial Census will potentially save the 
American taxpayer more than $5 billion when compared to the cost of 
repeating the 2010 Census design without sacrificing quality.
    The budget provides $1.6 billion to support key development and 
implementation of innovative design methods necessary to achieve these 
goals for the 2020 Decennial Census. This includes $104 million for the 
Census Enterprise Data Collection and Processing (CEDCaP) IT system 
that will provide a necessary foundation for newly-automated 2020 data 
collection and processing operations.
    In accordance with the Federal Digital Strategy, the Census Bureau 
has set a goal to unlock the potential of our data and products to 
better meet the needs of its users. This budget includes funding to 
enable users such as businesses, policy makers, and the American public 
to make better data-driven decisions based on enhanced statistics, 
easy-to-use tools, and standardized data elements.
    The budget provides for a planned cyclical increase for the 
Economic Census, which is the official 5-year measure of American 
business and the economy. In addition, $115 million is requested for 
the Economics and Statistics Administration (ESA) and the Bureau of 
Economic Analysis (BEA) to leverage data to forge enhanced 
collaboration and expertise across the Federal Government as well as 
provide timely, accurate, and relevant economic statistics in an 
objective and cost-effective manner. Included in this budget request is 
a proposal that will create a county level GDP measure to help policy 
makers at all levels of government and businesses better target 
investments to areas of need and measure the impact of these 
investments.
            supporting the environment and natural resources
    The Department's commitment to supporting the environment and 
natural resources is demonstrated through its request of $5.8 billion 
for the National Oceanic and Atmospheric Administration (NOAA). The 
budget, which is a $77 million increase over the fiscal year 2016 
enacted level, focuses on supporting NOAA's core missions, including 
deploying the next generation of weather satellites and observational 
infrastructure, fostering healthy marine resources, strengthening 
resiliency, and improving forecasting accuracy and lead times for 
severe weather.
    To ensure the robustness of NOAA's observational infrastructure, 
the budget provides $2.3 billion to fully fund the next generation of 
weather satellites. This includes $393 million for the Polar Follow-On 
satellite program enabling NOAA to maintain an optimal launch schedule 
to help minimize the risk of any potential gap in weather data in a 
cost-effective manner. The Department recently released its Commercial 
Space Policy and is exploring the viability of buying more weather data 
from the private sector.
    The budget invests $1 billion for the National Marine Fisheries 
Service and $570 million for the National Ocean Service, including $20 
million for an expanded competitive Regional Coastal Resilience Grants 
Program to help reduce the risks and impacts associated with extreme 
weather events and changing ocean conditions and uses. The budget 
further provides $9 million to help fishing communities, which face 
significant climate challenges, become more resilient to the impacts of 
fisheries disasters. These competitive funds will assist communities 
that have sustained a disaster to become more environmentally and 
economically resilient through activities such as ecosystem 
restoration, research, and adaptation.
    An additional $12 million is requested for a new Integrated Water 
Prediction (IWP) initiative that will leverage the National Water 
Center in Tuscaloosa, Alabama. The IWP will link current expertise 
around the country to promote innovation in water prediction capability 
and services, such as providing high-resolution water information and 
critical water forecast information to local decision makers, emergency 
managers, and members of the public.
    Fiscal year 2017 funding also supports maintaining research 
facilities, such as $4.6 million to begin prep work, planning, and 
design to replace the Northwest Fisheries Science Center facility in 
Mukilteo, Washington (on Puget Sound). The facility has deteriorated to 
a point that it poses a near-term safety risk and threatens NOAA's 
mission and operations in the region. NOAA conducts important 
multidisciplinary research at this facility which supports the 
commercial and recreational fisheries in the Northwest.
    To better understand the impacts of increasing levels of 
atmospheric carbon dioxide on ocean chemistry and marine resources, the 
budget includes $22 million for an expanded ocean acidification 
research program at NOAA.
    Building a Weather-Ready Nation and evolving the National Weather 
Service (NWS) to become a more agile decision support organization 
capable of providing timely responses and increasingly accurate weather 
forecasts is a continuing area of emphasis for the Department. The 
budget invests more than $1.1 billion for NWS, which includes funding 
to make the United States a Weather-Ready Nation (WRN). The Department 
focuses on continuing to evolve NWS into a fully integrated field 
structure issuing consistent products and services. To support a 
Weather-Ready Nation, the budget requests a $5 million increase from 
the fiscal year 2016 enacted level for the Advanced Weather Interactive 
Processing System Cyclical Refreshment, which is the telecommunications 
systems and cornerstone of NWS' field operations.
    The budget provides $24 million to complete design, acquisition, 
and construction of a multi-mission regional survey vessel (RSV), which 
will support fishery surveys critical to species management, habitat 
and hydrographic surveys, and disaster response. The fiscal year 2017 
funding, combined with the $80 million Congress provided in fiscal year 
2016, will help NOAA begin to recapitalize its fleet. Without further 
investment, NOAA's fleet is projected to decline by 50 percent (from 16 
to 8 vessels) in the next 10 to 12 years.
    Separately, the budget includes $100 million in mandatory funds to 
begin construction on a second RSV as part of a multi-year NOAA fleet 
recapitalization initiative.
                       modernization initiatives
    Commerce is in the process of modernizing its infrastructure to 
protect the safety of employees and provide quality service to 
citizens. Many of these efforts will ultimately result in future 
savings. Commerce is requesting $12 million for the ongoing renovation 
and modernization of its headquarters, the Herbert C. Hoover Building 
(HCHB). This funding is critical to the completion of Phase 5 of an 8-
phase project. Phase 5 is tentatively scheduled to begin in June 2017 
and end in April 2019.
    This renovation provides the solutions to replace major building 
systems (mechanical, electrical, plumbing, heating, ventilation, air 
conditioning, and life safety systems) that are beyond their useful 
life and deteriorating. Systems being replaced will be more energy 
efficient and cost effective to run. It also includes the Department's 
effort to improve upon space utilization, decrease reliance on leased 
space, and reduce the Government's footprint.
    The budget supports $45 million for the Shared Services initiative 
that will enable bureaus to modernize mission support functions by 
leveraging information and services in the core areas of Human 
Resources (HR), Acquisition, Financial Management, and Information 
Technology (IT). The objective is to establish a new, customer-focused 
shared service model that will provide internal Department of Commerce 
customers with easier access to information. This includes high quality 
service, an improved customer experience, performance (management) 
measurement, external provider support, shared service independence, 
standardization, continuous process improvement and process 
transparency.
    The upfront investment of establishing a shared service model is 
projected to generate significant cost savings by creating economies of 
scale and allowing bureaus and offices to pay only for the services 
they need rather than building their own infrastructure. Although 
actual cost savings are not known at this time, shared services 
initiatives tend to save organizations 20 to 40 percent by the end of 
the third year of their existence.
   integrating innovative best practices into core agency operations
    To further the President's goals of improving customer service and 
enhancing the efficiency of Government, Commerce requests $6 million to 
support a Commerce Digital Services team, which will focus on two 
goals: (1) managing high priority projects to deploy digital solutions 
quickly across Commerce bureaus, and (2) improving Commerce's systems 
to provide end users state-of-the-art technological tools.
                               conclusion
    The fiscal year 2017 budget continues investments in those priority 
programs that have a strong return on investment for our Nation's 
taxpayers and make a tangible difference in the lives of millions of 
Americans. During my tenure at Commerce, we have shown that, by working 
together, we can make significant strides toward setting a stable 
foundation for economic growth; providing U.S. businesses with the 
necessary tools and resources to succeed; and to ensuring that America 
continues to lead the global economy in the 21st century. With this 
budget, I am confident that we will keep America ``Open for Business.'' 
I look forward to working with this subcommittee and the rest of the 
Congress to achieve these important goals.

             NOAA'S OCEAN CLASS AND REGIONAL CLASS VESSELS

    Senator Shelby. Thank you, Madam Secretary. Last year, you 
testified before this subcommittee, Madam Secretary, that one 
of the Department's highest priorities was funding a high 
endurance, long-range ocean class vessel for NOAA. In turn, 
this subcommittee provided $80 million in 2016 to begin 
construction of the ocean class vessel, which was contingent 
upon receiving a fleet recapitalization plan.
    Now, it is our understanding the Department is proposing to 
build a smaller regional class vessel in 2017 using the 2016 
funds. In addition, we still have not received a fleet plan 
from the Department, which I understand is being held at the 
Office of Management and Budget.
    A question. How does construction of a regional class 
vessel instead of an ocean class vessel affect the time line 
for replacing NOAA's ships?
    Ms. Pritzker. Mr. Chairman, let me step back for a minute. 
Our fleet, we have 16 ships, half of our fleet will retire over 
the next 12 years. Our challenge is we need both ocean class 
vessels and regional class vessels.
    We have been working with the Office of Management and 
Budget (OMB) on our fleet plan and how it fits into a national 
fleet plan. That has held up our being able to release our own 
fleet plan, but it should come out, I am told, any week now.
    In the President's budget this year, we have $24 million--
which first of all, I want to thank the subcommittee for the 
$80 million appropriation last year--if you combine the $24 
million in the President's budget, that allows us to do a 
regional class vessel.
    We stand ready to work with the subcommittee on whether to 
begin with a regional vessel or how to proceed. What I do know 
for certain is we need both regional class vessels and ocean 
class vessels, and we need to start now recapitalizing our 
fleet, because we have a significant amount of retirements that 
are coming up, and what we do know is that ships take about 6 
to 8 years from the day you decide you are going to proceed to 
the time you are fully in operation.
    Our goal is to work with you and your staff to make sure 
that we have a recapitalization plan that everybody is on the 
same page, because we need to proceed with this, or we are 
going to find ourselves without the observational platform that 
we need, without the research that is necessary to protect and 
work with our fisheries, et cetera, and do our climate work.

                               FLEET PLAN

    Senator Shelby. Madam Secretary, how confident are you that 
the fleet plan that OMB is holding will actually meet NOAA's 
at-sea operational needs?
    Ms. Pritzker. Mr. Chairman, it is my objective that we 
cannot put forward a fleet plan that does not meet NOAA's 
needs, so that is part of the process that is going on. We have 
to make sure the plan that is proffered is one that--that we 
are able to do our work.
    We have a large responsibility, as so many of you here in 
this room know, whether it affects the snapper in the Gulf or 
the groundfish in the Northeast, or salmon, et cetera, or our 
work on oceans and ocean acidification, I could go and on, we 
have to be able to have a platform that is functional. That is 
part of the process that we are going through now.
    Senator Shelby. But how confident are you that the OMB plan 
that they are holding will do all this?
    Ms. Pritzker. We are not going to let a plan--I cannot 
stand in front of you and have a plan that we proffer that we 
are not confident in.
    Senator Shelby. You have not signed onto it yet, have you?
    Ms. Pritzker. Well, we are in the process of internal 
processes of completing it, and until it is----
    Senator Shelby. Evaluating it?
    Ms. Pritzker. We are evaluating it. Once it is complete, by 
the time we come to you, it is going to be a plan that we are 
confident we can do our work.
    Senator Shelby. I understand, Madam Secretary, the Commerce 
Department has commissioned an independent review team to 
examine NOAA's fleet recapitalization. When will this plan be 
available for the subcommittee to evaluate, to review?
    Ms. Pritzker. We have commissioned an independent review. 
The purpose of that analysis is to continue to supplement what 
we know, making sure that we are aware of the latest 
technologies that we are including, the most efficient life 
cycles, that we are maximizing fleet readiness.
    The plan, I believe, will be finished at some point this 
year, I think some time in the fall. The goal of it is to 
continue to inform our fleet proposals, because this is a 
process that is going to go on for a very long time because of 
the significant need that we have, but we have to make sure we 
are also constantly making sure we are giving the best advice 
in terms of maximizing fleet readiness and making sure we have 
the right staffing models, et cetera. We welcome that kind of 
input.

                           WEATHER SATELLITES

    Senator Shelby. In the area of the weather satellites, the 
Department oversees, to my understanding, two flagship weather 
satellite programs that are critical for forecasting 
hurricanes, super storms, severe weather outbreaks, and so 
forth.
    NOAA's Polar satellite program has been on the Government 
Accountability Office's (GAO) high risk list since 2013. There 
remains a significant possibility of a gap in data between 
NOAA's existing polar satellite and the next one to launch.
    In addition, it is my understanding that GAO found that 
NOAA's geostationary satellite program had to once again delay 
launch of its newest weather satellite due to poor schedule 
performance. This resulted in an 1 year delay from its 
originally planned launch date.
    My questions are these, how does the Department's 2017 
request adequately address the concerns raised by GAO and the 
Department's own Inspector General for keeping these satellite 
programs on schedule and on budget, and secondly, when can we 
expect the Department to fully implement the rest of GAO's 
recommendations to strengthen NOAA's satellite programs?
    Ms. Pritzker. Well, first of all, Mr. Chairman, thank you 
and thank you to the subcommittee for your consistent 
commitment to our satellite programs. We are keenly aware of 
the risk of gaps. That is something that I personally watch 
very carefully. We do everything we can to mitigate those gaps.
    You know, if you look at our program, right now, in terms 
of robustness, our GOES program, our GOES-R program, you are 
exactly right, we did delay the GOES-R launch to October 
because there was during a pre-test a failure of some of the 
instruments, and that needed to be addressed. When that failure 
occurred, I personally called the CEO of Lockheed Martin and 
asked her to monitor this program because it is of such great 
importance to all of us. We cannot afford any kind of gaps in 
our weather satellite program.
    Fortunately, our GOES program does have what we call a 
``spare in the air,'' so we do have some robustness there. The 
program that is more fragile is our Joint Polar Satellite 
System (JPSS) or our Polar program, which does not have a spare 
in the air, which is one of the reasons in our current budget 
we have a significant request for our Polar Follow-on, because 
we need to get that kind of robustness up in the air where we 
have an extra satellite in case, God forbid, one of them goes 
down.
    Our 2017 budget continues to move us along to increase 
robustness of our Polar program, which is extremely important 
for our long-term weather forecasts and things like that.

                           FISHERY MANAGEMENT

    Senator Shelby. In the area of fishery management, last 
year the subcommittee provided funding for an independent stock 
assessment for reef fish in the Gulf of Mexico. The 
subcommittee also provided clear direction for the Department 
and NOAA to improve its management of fisheries by counting 
fish in areas where the fish live, such as around artificial 
reefs.
    How does the 2017 request follow the direction of this 
subcommittee to improve fisheries management by counting the 
fish where they are in the environment, including around reefs, 
and how will NOAA take advantage of new technologies such as 
electronic monitoring and reporting to improve the accuracy of 
data collected and allow fishermen to have more days on the 
water?
    We basically believe there is a super abundance of red 
snapper and other reef fish in the Gulf of Mexico, because we 
managed it pretty well. Nobody wants to over fish anything, but 
the snappers are so big now, they are eating their own, among 
other things.
    Ms. Pritzker. Well, first of all, the rebound of the 
snapper population is something that everyone is very pleased 
with, and making sure we sustain snapper recovery is something 
that we are focused on.
    On the larger questions of monitoring, we put out 
yesterday--the IG yesterday put out something saying that we 
need to have more electronic monitoring. We are piloting--in 
this budget, we are piloting electronic monitoring and we are 
expanding it from five fisheries to add an additional seven 
fisheries within the budget.
    That is something we should continue to do. We also have to 
test to make sure the electronic monitoring is actually 
accurate and working. That is why it is a pilot.
    We have to continue to work with the regional stakeholders 
to implement this program, and as you said, to make sure we are 
counting the fish where they are. It is something that we take 
seriously. We are happy to work with your staff to make sure 
that they have all the details of what we are doing in this 
area.
    Senator Shelby. Thank you. Senator Mikulski.

                  MANUFACTURING EXTENSION PARTNERSHIPS

    Senator Mikulski. Madam Secretary, I know both the 
President and you are very concerned about jobs and job growth, 
and certainly the electorate is. That is one of the big topics, 
and also there is not one member of this subcommittee that is 
not worried about jobs.
    Now, we note in your request, the National Institute of 
Standards and Technology (NIST) funds two programs aimed 
particularly at manufacturing, all of us up here have felt the 
very keen, keen loss of manufacturing. Of course, what the 
private sector says is government does not create jobs, the 
private sector does. I agree with that.
    Tell me, what then would your manufacturing extension 
partnership increase buy, and how would that help create jobs 
and jobs in manufacturing? Is that really what we should be 
doing?
    Also, there is an one time mandatory funding of close to $2 
billion, $1.9 billion, for the National Network for 
Manufacturing Innovation Institutes, 45 of them government-
wide. You and I have talked about it, but we want jobs in 
America, we want jobs that will not leave America, and what we 
can say to our constituents who are either worried their jobs 
are going to China or their jobs are going to go to a robot?
    Ms. Pritzker. Well, first of all, thank you for all the 
support that you have given the Department in so many different 
areas. As it relates to NIST, which is I think you and I agree 
is a national treasure, it is an important part of our 
government, but NIST's role in terms of manufacturing extension 
partnerships and manufacturing at-large is very important.
    I will tell you as someone who came from the private sector 
into this job, when I learned of the manufacturing extension 
partnerships, I was skeptical that government actually could 
help small manufacturers really improve their processes and 
make them more globally competitive.
    I have had a 180 degree turn around now that I have learned 
and seen and visited these programs, and talked to small and 
medium sized manufacturers.
    We have just re-competed our manufacturing extension 
partnerships, a number of them, so that we can make sure our 
resources are going to places where we have an abundance of 
small and medium sized manufacturers. It is a very, very 
important program that allows a small or medium sized 
manufacturer to get the best, learn the latest and greatest 
processes or technologies available to keep them globally 
competitive.
    That is one way we are working very closely, so that our 
manufacturers can thrive. We have created about 900,000 
manufacturing jobs in the last 5 plus years in the United 
States. We need to do more. The United States is very 
competitive for manufacturing, and we just need to continue to 
invest in our workforce and invest in the companies that are 
manufacturing.

              NATIONAL NETWORK OF MANUFACTURING INNOVATION

    The National Network of Manufacturing Innovation is a 
really important program. We have seven facilities, seven 
institutes today. The Department of Commerce through the 
Revitalized Advance Manufacturing Act, the RAMI Act, and 
through your appropriations has made the Department of Commerce 
responsible for two different aspects of this.
    The first is to run the network. It is extremely important 
that we do not just have these institutes out there separately, 
but we are taking advantage of best practices, that we are 
sharing technology between our institutes, we are sharing how 
do you include small manufacturers, what are the best ways to 
do that. How do you make sure the workforce is being developed 
at the same time, whether it is for 3D printing or composite 
materials or digital manufacturing?
    We run the network, which you have appropriated and we have 
been authorized to do, which is terrific, but you have also 
asked us, and the chairman raised this, about our ability to do 
our own institutes at the Department of Commerce. You have 
given us the unique authority to create new institutes where 
the industry determines the technology. We have no preconceived 
notion as to what those technologies will be.
    In an earlier notification we put out, here is what the 
President's Advanced Manufacturing Committee had said were 
interesting technologies, but we have not pursued those.
    The point being the United States Federal Government, I 
believe, is doing a very efficient job by partnering locally 
either through our manufacturing extension partnerships or our 
National Network of Manufacturing Innovation, which both 
require matching funds locally, both require the engagement of 
local resources, academics as well as the private----
    Senator Mikulski. Madam Secretary, I appreciate this, but 
what you are saying is through these institutes, the private 
sector comes to these institutes with either an idea that they 
would like to see if there is a possibility to develop, or how 
to improve their process; is that right?
    Ms. Pritzker. Well, the Manufacturing Extension Partnership 
(MEP) helps them improve processes and----
    Senator Mikulski. My time is almost up.
    Ms. Pritzker. Yes, exactly.

                 LAB TO MARKET TECH TRANSFER INITIATIVE

    Senator Mikulski. Now, we win the Nobel Prizes, many of 
which we win in Maryland, but then we do not always win the 
markets. I see in your appropriations there is a lab to market 
tech transfer initiative with a total of $8 million. That is 
like a spit off the Chesapeake Bay, Bay Bridge, and hoping you 
are going to raise the tide.
    Everywhere I go, I see our Federal labs doing spectacular 
work, or labs by proxy, Federal labs. In other words, the 
funding that goes to academia through this, and then it is a so 
what, the careers in research are very exciting, but I want to 
see these ideas move to products under American standards that 
are American jobs, that give us jobs here in exports.
    Is this enough to do it, and while you have the future of 
this and the national center for that, and the advanced this, 
$8 million for this, should this not be one of the highest 
priorities here of really tech transfer?
    Ms. Pritzker. Absolutely.
    Senator Mikulski. With Commerce leading the way?
    Ms. Pritzker. Absolutely. One of our highest priorities is 
lab to market tech transfer. We need it throughout both at NOAA 
as well as at NIST and in other areas. We obviously in our 
budget are trying to balance priorities and stay within----
    Senator Mikulski. Colleagues, I bring this to your 
attention as we work on the budget. I think you have all 
visited universities and others in your State. I really think 
our socks are down on the tech transfer, I really do.
    It cuts across this administration and previous ones, but I 
think we are such a cornucopia of ideas that could mean 
something, and I would hope that we would look at how not only 
could we give them more money but more direction on lab to 
market.
    I want to win those Nobel Prizes, but I really do want to 
win those markets. My time is up.
    Ms. Pritzker. I appreciate that, Senator. I am happy to 
have our staff work with yours to improve our efforts on tech 
transfer.
    Senator Shelby. Senator Collins.

                 AT-SEA MONITORING COSTS FOR FISHERMEN

    Senator Collins. Thank you, Mr. Chairman. Madam Secretary, 
this weekend I will be attending the Annual Fishermen's Forum 
in the State of Maine. I know NOAA officials will be there as 
well.
    I can predict to you right now that I am going to hear a 
number of concerns from Maine's groundfish industry, and one 
concern will focus on NOAA's announcement that as of Tuesday of 
this week, New England ground fishermen will be on the hook, 
pun intended, for all at-sea monitoring costs. This will put 
our already struggling fishermen in an even more precarious 
financial position.
    The situation is becoming so dire that Maine fishermen are 
now having to use fisheries disaster assistance funds, which 
are intended to replace lost fishing revenue, to instead pay 
for at-sea monitoring.
    Congress had repeatedly expressed its concern about NOAA's 
plan through report language that was drafted by this 
subcommittee and became law as part of the Omnibus. It 
encouraged NOAA to work with the New England Fisheries 
Management Council to find a resolution to the disruption of 
federally funded at-sea monitoring, and to work on a transition 
plan.
    Will you direct your NOAA officials who are going to be at 
the forum this weekend to truly sit down with our fishermen and 
try to work out a solution that does not result in even more of 
the ground fishermen in my State and throughout New England 
losing their livelihoods?
    Ms. Pritzker. Senator, absolutely I will have my NOAA 
representatives sit with the ground fishermen and do the best 
we can to support them. I appreciate the really challenging 
pressure situation that they face.
    Just as it relates to at-sea monitoring, unfortunately, we 
lost a legal case in the United States Court of Appeals, and 
now we are required--that case requires NOAA to spend funds on 
mandatory bycatch monitoring first. Unfortunately, we do not 
have sufficient funds or the flexibility to fund the New 
England groundfish monitoring because we have to do this 
bycatch monitoring.
    We will at this meeting absolutely sit down with the 
fishermen.
    Senator Collins. Well, let me address that court decision 
because that is an issue that Senator Ayotte recently raised 
with the Deputy Assistant Administrator of NOAA. In fact, the 
language that we put in the Omnibus gives NOAA the flexibility 
to substitute other funds.
    It is accurate that the court says that this has to be 
funded, but it is not accurate to say other funds could not be 
used to help bear part of the cost of this.
    There is actual language in the Omnibus that says if 
additional funds are available from another funding source for 
observer sea days, those observer days can be allocated 
according to other priorities, and would not necessarily have 
to be allocated according to the SBRM process. The report lists 
potential other funding sources.
    I appreciate your willingness to have discussion about 
that, but the court does not completely tie NOAA's and the 
Department's hands, especially given our language.

                     CHINA'S MARKET ECONOMY STATUS

    I want to switch to another issue in my remaining time, and 
that has to do with China. Since 1981, the Department of 
Commerce has considered China to be a non-market economy for 
the purpose of conducting antidumping investigations due to the 
persistent and significant government intervention to 
artificially lower production costs.
    That law, that requirement, to consider China as a non-
market economy, has directly benefitted American workers 
seeking to combat unfair and illegal trade practices by China.
    American workers who could be affected by future 
antidumping duties on China includes those at Auburn 
Manufacturing in the State of Maine, as well as those employed 
by our State's paper industry. They are concerned that China is 
now claiming that the U.S. and other World Trade Organization 
(WTO) members must treat it as a market economy beginning on 
December 11, based on China's interpretation of the WTO 
protocol on abstention.
    There are many others who disagree with that and would 
point to China's continuing subsidization, the manipulation of 
its currency, and its flagrant violations of the principles of 
WTO.
    What is your assessment of the progress or the lack thereof 
with respect to implementing real market oriented reforms that 
are required by its succession to the WTO? This is a really 
important issue to workers in my State and throughout the 
country.
    Ms. Pritzker. Senator, first of all, there is nothing in 
this WTO protocol that requires automatic granting of market 
economy status. As we always do, our antidumping and 
countervailing duty proceedings, which we run at the Department 
of Commerce, they are governed by U.S. law. U.S. law has six 
criteria in terms of determining whether an economy is entitled 
to market economy status.
    Based on previous examinations that we have done in the 
past, China is not a market economy status, is not a market 
economy. They could request a new evaluation, but we will apply 
U.S. law and the six criteria within our law. We can go through 
an evaluation of where they are as it relates to those 
criteria.
    Senator Collins. Great. Thank you very much. Mr. Chairman, 
I would ask unanimous consent that the remainder of my 
questions, including the one on an important issue involving 
the U.S.-Canadian softwood lumber agreement, be submitted for 
the record.
    Senator Shelby. It will be made part of the record in its 
entirety. Senator Feinstein.

                     SALMON POPULATION IN THE DELTA

    Senator Feinstein. Thanks very much, Mr. Chairman. Thank 
you, Madam Secretary, for being here. With all the events that 
we have watched, you are doing a very good job, and that is 
very much appreciated.
    I wanted to ask you about salmon in a somewhat similar way 
to what the Senator from Maine has done, because we have a big 
water problem, as you know, in California. We are in a drought 
emergency. It is the fourth year of that drought. The oceans 
are warming. The entire crab season is gone because of toxins 
in the water. It is a very complicated situation.
    We now have over 40 million people in the State, and our 
water infrastructure was built when we had 16 million people. 
There are real problems.
    I wanted to start out with something that I think you may 
be doing very well, and that is NOAA is conducting real time 
monitoring pilot programs to get a better sense of where fish 
are in the delta.
    It is my understanding that in 2013, NOAA began implanting 
acoustic tags into endangered Winter-run Chinook. In 2015, NOAA 
began testing cheaper radio frequency identification tags, and 
it with these tags, I understand, that individual salmon can 
then be monitored in real time. Here is the problem. If salmon 
get caught up in the pumps to a certain number, the pumps go 
down and water is denied to the rest of the State.
    Being able to know where endangered fish are is really 
important to make informed decisions rather than decisions 
based on intuition when you run these pumps.
    How much of the salmon population in the Delta has NOAA now 
tagged?
    Ms. Pritzker. Senator, I do not know the exact percentage. 
I will get that information for you.
    [The information follows:]

    NOAA has tagged 300-600 hatchery-produced winter-run Chinook salmon 
with acoustic tags each year since 2013. This is a fraction of the 
overall annual hatchery production of winter-run Chinook, but tracking 
this number reasonably approximates the movement and survival of 
hatchery-produced winter-run Chinook in the Sacramento-San Joaquin 
system.
    At this time, NOAA is not acoustically tagging native, wild-born 
winter-run Chinook, in the Sacramento-San Joaquin system, as this 
process is much more complicated due to the variable size of individual 
fish (some too small to hold a tag) and to the intensive cost, time and 
labor demands associated with catching a large enough number of wild 
fish to tag to produce a representative sample.

    Senator Feinstein. Would you?
    Ms. Pritzker. I know we are running those pilot programs.
    Senator Feinstein. When do you expect to transition these 
monitoring programs from pilots to large scale implementation?
    Ms. Pritzker. As soon as we are comfortable with the 
pilots, but I do not have the exact time. I will get that 
information for you.
    [The information follows:]

    As of March 31, 2016, NOAA staff has proposed briefing times for 
Senator Feinstein's staff, scheduling to be determined.

    Senator Feinstein. Good. Do you know how NOAA would plan 
with these tags to make more informed decisions about water 
pumping levels?
    Ms. Pritzker. Well, as you pointed out, Senator, our goal 
is to try to balance the role that we have in order to protect 
the salmon and yet at the same time, as you and I have 
discussed in the past, to work to be as flexible as possible to 
try to address the drought challenges that California is 
facing.
    That is really how we would intend to use the information, 
to be able to make more informed decisions that hopefully will 
allow for greater water availability, without deteriorating the 
populations.
    Senator Feinstein. I understand that. I am really 
interested in specifics in the program, perhaps you can arrange 
a briefing for me on that.

                WATER TEMPERATURE GAUGES MALFUNCTIONING

    Ms. Pritzker. We will get a briefing for your staff.
    Senator Feinstein. Good; okay. Next question. As you know, 
the Federal Government operates a big cold water dam. It is 
Shasta Dam in Northern California. One of the problems that has 
happened is, I guess some would call it a failure to manage the 
cold water pool which has a temperature gauge, as I understand 
it, that broke in 2014, and broke again in 2015.
    The agencies failed to accurately estimate how much cold 
water was available, and therefore, improperly drained all of 
the cold water by mid-September. As a result, temperatures in 
the Sacramento River rose to 62 degrees, which was fatal to the 
salmon eggs.
    There was that repeated failure in 2015, when agencies 
failed to anticipate the temperatures at Shasta would be higher 
than expected, and withheld 250,000 acre feet through August.
    We cannot have this kind of thing happen, and what I would 
like to ask that you do is once again take a good look at it 
and see whatever gauges we have are working correctly, and this 
does not happen again.
    Ms. Pritzker. Absolutely, Senator. We will follow up and we 
will make sure to get back to your staff on that as well.
    [The information follows:]

    As of March 31, 2016, NOAA staff has proposed briefing times for 
Senator Feinstein's staff, scheduling to be determined.

    Senator Feinstein. Okay. I have one other question but my 
time is out. I will yield. Thank you.
    Senator Shelby. Senator Murphy.

                              AQUACULTURE

    Senator Murphy. Thank you very much, Mr. Chairman. Madam 
Secretary, thank you for all of your work. I am always 
impressed with your testimony, the dizzying array of topics 
that you have to be master of is I know both a blessing and a 
curse.
    I am going to build on some of the questions that Senator 
Collins and I tend to double up on, and those are questions 
about fisheries, and in particular, in Connecticut, as I have 
talked to you before, we are really the center of aquaculture 
research in the country with the Milford Lab.
    I wanted to sort of present sort of a two level question 
for you. One to ask about the commitment in this budget and 
moving forward generally to supporting aquaculture.
    As you know, 90 percent of the seafood that we consume in 
the United States today is imported, so we certainly have an 
interest in growing a domestic aquaculture industry, but if you 
pace it out, estimates are that by 2030, 60 percent of the fish 
that are going to be consumed in the United States will be from 
aquaculture, so we might as well be doing that here.
    I wanted you to talk about, if you would, the broader 
commitment to aquaculture, and then specifically as you know, 
in Milford, Connecticut, we have one of the two NOAA labs 
nationwide that support this kind of research, and in 
Connecticut, we have 43 companies and 300 employees in this 
field that account for about $25 million shellfish production 
alone, and that is growing.
    From our perspective, aquaculture research is kind of one 
of these triple wins, in that you support a booming industry 
that is creating jobs, you grow our knowledge base about ocean 
health and ocean acidification that can have spillover effects 
on our efforts to combat warming oceans, and then, of course, 
increase the presence in our case of shellfish, which improves 
water quality and habitat.
    So, I just wanted to pose those two questions for you, how 
can we support aquaculture at-large, and just want to make sure 
that your Department continues to have a commitment to robust 
funding for the Milford Lab, and there is a commitment to 
maintaining that lab in Milford, Connecticut.
    Ms. Pritzker. We are very much committed to the Milford Lab 
and the great work that the people are doing there. We also are 
committed to our growing research in aquaculture. In fact, in 
your budget, we ask for an additional $1.5 million to support 
that work, because we recognize how important it is, and we 
also know it is strongly supported by the East Coast shellfish 
aquaculture industry. We try to do work in a place where 
industry would support the research that we are doing.
    Both the facility and the work are extremely important, and 
we are committed to both.
    Senator Murphy. Just for your edification, we are really 
starting to see some great public-private partnerships on that 
campus. It is a very small campus right on the Sound in 
Milford, but we have already had a lot of interest from private 
companies to come in and start to partner with our researchers 
there. So, a really great commitment to public-private 
partnerships there.

                           COASTAL RESILIENCY

    Just one last question on the general issue of coastal 
resiliency, so with NOAA's help funded through Sandy relief 
dollars, Connecticut stood up a Connecticut Center for Climate 
Resilience.
    The idea here is to really help leverage State dollars, 
local dollars, and private dollars that are going into trying 
to protect our coast line from what will be the next major 
storm. Long Island Sound is the most urbanized estuary in the 
country, so we are particularly vulnerable.
    Setting that center is not enough. We are going to need 
help keeping it up and operational, and our idea is that for a 
little bit of money, you are able to leverage a lot smarter 
investment of Federal, State, and local dollars. We have 169 
towns in Connecticut. They do not often have the expertise 
locally to know how to best use dollars for resiliency 
purposes.
    An ongoing commitment to a Center of Excellence like the 
one that we have developed in Connecticut, I think, is a great 
way to make sure that a small amount of Federal dollars goes a 
long way towards the coastal resiliency that the Department has 
been very committed to.
    Ms. Pritzker. Thank you.
    Senator Shelby. Senator Lankford.

      INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS (ICANN)

    Senator Lankford. Thank you. Good to get a chance to visit 
with you again. I appreciate you being here and getting a 
chance to go through this budget time period.
    Let me ask you several things. Let me start with some of 
the conversation about the Internet Corporation for Assigned 
Names and Numbers (ICANN), which we talked about a little bit 
last year as well. In 2014, the National Telecommunications and 
Information Administration (NTIA) announced its intention to 
transition its stewardship role over the Internet. What is the 
status of the transition at this point?
    Ms. Pritzker. Where we are at is we are waiting a proposal 
from ICANN. We have not received a proposal. What we have done 
is we have said that there are really two buckets of issues 
that we are concerned about.
    First is the issue of ICANN's ongoing governance, and the 
second question is really about making sure that when we 
receive a proposal, the criteria, what we thought about what 
are the criteria that will be necessary for us to suggest that 
we approve this proposal, and those are really five.
    One is to make sure that the proposal supports and enhances 
a bottom up multi-stakeholder model. Second is it needs to 
maintain the security and stability and resiliency of the 
domain name system, and third is it needs to meet the 
expectations of the global customers and partners.
    It obviously has to maintain the openness of the Internet, 
and then we are not going to accept any kind of proposal that 
replaces the NTIA role with some intergovernmental organization 
or some other government led organization.
    The goal here is to have ICANN remain and the domain name 
process remain a multi-stakeholder driven model----
    Senator Lankford. Let me try to drill down a little bit on 
that. Mr. Chehade has made several comments on trips to China, 
and has said interaction with China and China being part of 
this is not an option, and opened a global engagement office in 
Beijing, and has had a big push on that.
    What role do you think China has in this multi-stakeholder 
approach? Obviously, China being the dead last of all nations 
to allow the free Internet, so what role do you anticipate 
China is going to have in the ICANN process?
    Ms. Pritzker. What we are trying to do is make sure there 
is no government roles being played in the ICANN domain name 
process.
    Senator Lankford. The struggle is the global engagement 
office in Beijing obviously has multiple government leaders 
that are a part of that, and Mr. Chehade has made multiple 
conversations, multiple events, with the Chinese government. It 
is difficult to say there is not going to be government 
leadership in China when it seems to be all the connections are 
around China and what is currently happening with ICANN.
    Ms. Pritzker. I think Mr. Chehade is leaving ICANN.
    Senator Lankford. Correct.
    Ms. Pritzker. What he is choosing to do afterwards is his 
business. Our concern is to make sure that whether it is China 
or any other government, because there are other governments 
that would like to take over the domain name process, and we 
are not going to allow that. That is not the objective here. 
The objective is to keep it in the multi-stakeholder domain.
    Senator Lankford. Completely understand that. I would just 
say the concern is that obviously the Internet affects all of 
us, and it is very, very important that it remains open and 
free and not limited. We are very concerned. I am very 
concerned. The more we push a multi-stakeholder perspective on 
that, which we want to have all nations, all people, to be 
engaged on this, but when you are dealing with China and the 
way this has been dealt with in so many places, it raises red 
flags to me.

                       AMERICAN COMMUNITY SURVEY

    Let me shift subjects, if I may. The American Community 
Survey, we have talked about before as well, that there was 
some piloting to test out the volunteer response, changing some 
language on the outside of the envelope, changing some of the 
ways that folks have been addressed, as I have addressed with 
you as well before.
    I have constituents that call me that are very upset with 
the way they are being addressed when people come to their door 
and people call them talking about fines and penalties, and it 
seems very punitive to them in the process. This is an American 
Community Survey.
    So, can you help me understand how the pilot is going 
towards changing the language and what has the response been.
    Ms. Pritzker. Well, we have heard loud and clear the 
concerns about the American Community Survey, and you know, the 
reason we persist with it is because it is one of the most 
valuable data products available used extensively by non-
governmental organizations (NGOs), by the government, by the 
private sector.
    Senator Lankford. Correct, but you and I had talked before, 
because some of this information is available in the public 
domain right now.
    Ms. Pritzker. What we have been piloting is obtaining data 
from other sources. We have also been removing--looking at 
removing questions or asking certain questions less frequently, 
as well as improving the wording in our surveys so that it is 
not so heavy-handed, if you will, and then reducing also our 
follow-up contacts. In fact, we have reduced about 1.2 million 
phone calls from the way we ran the survey before.
    We are trying to balance all of this with the need to have 
what we have seen from let's say Canada and other places as a 
voluntary survey, which reduces not only the quality of the 
survey, the reliability of the survey, but certainly has a 
negative impact on rural communities and parts of our country 
that are more in need.
    We do not want to degrade the survey, but having said that, 
we have been listening loud and clear to the concerns that 
people have about the survey, and have been implementing a 
number of the changes I list.
    Senator Lankford. Is that a report that comes to you with 
just changes and things that have been implemented, questions 
that have been changed, all the things you just mentioned to 
me? It sounds like that is gathering of data that is happening. 
Is that something we can get access to so we can see what are 
the real changes that are coming?
    We know what it looked like last year, I would like to know 
where it is going and what the changes are that are responsive 
to that.
    Ms. Pritzker. Senator Lankford, I am happy to have my staff 
at Census and at the Department work with yours to make sure 
you are aware of what we have done.
    Senator Lankford. And where we are headed.
    Ms. Pritzker. Great.
    Senator Lankford. Thank you.
    Ms. Pritzker. Thank you.
    Senator Shelby. Senator Coons.

                             MANUFACTURING

    Senator Coons. Thank you, Chairman Shelby, and Vice 
Chairwoman Mikulski, and thank you, Secretary, for your great 
service and what you have done to bring energy and focus and 
real leadership to the Department.
    And thank you for visiting Delaware last October to 
celebrate National Manufacturing Day. We toured together two 
important Delaware manufacturers, Accudyne Systems and M Davis. 
It is a great way to highlight the opportunities for 
manufacturing for the next generation of American workers.
    I am interested in talking about how we make every day 
Manufacturing Day, and what we can do together to advance 
manufacturing, and to give it sort of a different profile in 
our country.
    Let me lay out two or three questions, and then if you 
would, take the remainder of the time to address them.
    First, what do we do to change the view of manufacturing? 
Far too many guidance counselors, parents, and teachers, view 
manufacturing as dirty and dangerous and outdated. I do think 
changing its perspective, its profile, makes a big difference 
for the recruitment and training and placement of the hundreds 
of thousands of highly skilled manufacturers we need today.

                    COST-SHARE REQUIREMENTS FOR MEPS

    Second, the manufacturing extension partnership, which I 
know Senator Mikulski asked about a moment ago, is of great 
interest to me. I am particularly concerned about the cost-
share requirements, and the way that over time a 2-1 - 1 ratio, 
I think, drives many MEPs into acting more as consultants to 
businesses to generate revenue, and to reduce their focus on 
small or rural companies which is where I think they have the 
biggest impact.
    My impression was that the National Institute of Standards 
and Technology's (NIST) biggest concern about the MEP going 
forward was this cost-share, and I would be interested in how 
you think permanently moving to a 1-1 cost-share might help it.
    I am excited, as you know, about the National Network for 
Manufacturing Innovation (NNMI), and joined with Senator Kirk 
in passing the law last Congress that authorized it, and I 
would be interested in hearing how you see NIST's activities 
rolling out the next manufacturing institute. It is something I 
hope there will be regional applicants for, who will be 
competitive.

                               SELECTUSA

    And last, I just wanted to commend you on your budget 
request under the International Trade Administration (ITA) for 
SelectUSA. We have seen ways in which it has made a real impact 
in Delaware, an Irish company, AB Group, recently relocated to 
Newark, Delaware, where I grew up. Without SelectUSA and its 
ability to showcase America's strengths and the capabilities 
and the draw of our market, I do not think it would have 
happened.
    If you have a moment at the end, just how do we better 
support SelectUSA going forward? Thank you, Madam Secretary.

                             MANUFACTURING

    Ms. Pritzker. Thank you, Senator. First of all, in terms of 
manufacturing and the image of manufacturing, it is a big 
challenge in this country. Manufacturing Day is one way that we 
are addressing it.
    When we began, I think we had several hundred companies 
open their doors for students in their local areas to go and 
visit manufacturers. We had our third Manufacturing Day last 
year. We had 2,500 companies open their doors. We had about 
400,000 young people, their guidance counselors and their 
parents attend and visit and see what modern manufacturing 
looks like.
    We set a goal this year of 3,000 manufacturers opening 
their doors. We are ambitious in growing the perception, and 
making sure that people understand that manufacturing is very 
different from what it was 20 or 30 years ago. This year's 
Manufacturing Day is October 7, 2016. I hope everyone will 
participate in that event.

                                  MEP

    As it relates to our manufacturing extension partnerships, 
NIST has re-competed 22 centers in 20 different States over the 
past so far. The first Manufacturing Extension Partnership 
(MEP), we will not only have, I think, 20 of the centers 
reconfigure themselves to better serve their communities and 
are better located to match where the need is, but we also have 
for the first time, and I think Senator Murkowski would be 
happy about this, our first MEP in Alaska, which we are very 
excited about, awarded in September to provide training and 
technical assistance to seafood harvesters and processors.
    You know, the thing that we have done with these new 
awardees, and some are new and some are old, is to reconfirm 
that they are developing new partnerships, that their center 
activities are better aligned with what the communities and the 
State economic development organizations are doing.
    We have also increased State and local funding, so we do 
not make the cost-share such that it is unfeasible. I am quite 
excited about what we have done there.
    As it relates to the National Network for Manufacturing 
Innovation (NNMI), thank you very much to the subcommittee for 
the funding that we have received to both run the network as 
well as for the Department of Commerce to do its first 
institutes.
    We have actually put out the RFP for our first institute. 
Our hope is to try and announce the recipient of that at the 
latest by the first quarter of next year. I am trying to 
encourage folks to get it done by the fourth quarter of this 
year.
    It is a big move for the Department of Commerce. I am 
excited to see what the private sector comes up with. There has 
been some confusion about whether we have limited the 
categories, and the answer is we have not. It is completely 
open.
    We are very excited about the role that we play in 
manufacturing, and we recognize how critical that is to job 
growth and the multiplier effect of manufacturing jobs in the 
United States.
    Senator Coons. Thank you, Madam Secretary. Senator Baldwin 
and I co-lead an initiative called Manufacturing Jobs for 
America that has worked to develop legislation and to work 
across the aisle, and with your Department, to make sure that 
we have legislative proposals that address the needs of 
manufacturing. I look forward to talking with you more about 
that in the future. Thank you.
    Senator Shelby. Senator Murkowski.

                      ALASKA AND ARCTIC SURVEYING

    Senator Murkowski. Thank you, Mr. Chairman. Madam 
Secretary, welcome. We have had many opportunities to talk, and 
I think I always talk about fish. Well, today, I am not going 
to disappoint you, I am going to talk about fish, but I am also 
going to be talking about mapping, and let me start with that 
very quickly.
    We have heard every year from the Department that surveying 
in the Arctic waters is a priority, and in fiscal year 2014 and 
2015, NOAA received $25 million to contract for surveys, only 
$4 million was spent on surveys each year in Alaska. The 
remainder was spent in the Gulf of Mexico. Fiscal year 2016, 
there was $27 million for surveys, a slight improvement. We do 
not really know what the work plan is for this year.
    My question to you this morning is I need to know that NOAA 
is placing a priority on Alaska and the Arctic, recognizing how 
woefully behind we are in surveying, and also if you can get 
for me some accurate estimates in terms of when NOAA will 
complete surveying the navigationally significant areas within 
the Bering Sea and in the Arctic.
    Things are happening up there, and more and more vessels 
every day are going up, and the reality is we are still relying 
in many cases on data from the 1800s.
    So, can you confirm to me that (a) we are placing a 
priority on Arctic and Bering Sea, and also that we have some 
kind of an action plan for these surveys?
    Ms. Pritzker. Senator, first of all, as you know, charting 
is core to the mission of NOAA, and we have charting the Arctic 
and charting Alaska waters as a high priority for NOAA, and 
there is no decrease in commitment or effort in this region. I 
will have my staff get to your staff the timing and specifics 
of that.
    [The information follows:]

    Briefing scheduled with Senator Murkowski's office on status of 
NOAA efforts to survey the Artic and Bering Sea on April 26.

    Senator Murkowski. That would be very helpful, because I 
can tell you that just in the past 2 weeks, I have probably had 
no fewer than half a dozen different entities coming to me 
saying we have to make better progress on our charting.

                       RELOCATION OF RESEARCHERS

    Let me ask about NOAA and its scientists, very abled men 
and women without a doubt, but so much of NOAA's scientific 
missions that are being carried out in Alaska, the scientists, 
the researchers, are located outside of the State. There are 
roughly 338 Federal employees assigned to Alaska fisheries and 
science jobs, the majority, about 255 people are actually in 
Seattle. We have 65 positions in Juneau, 12 in Kodiak, a couple 
in Anchorage and Dutch Harbor, one person in St. Paul.
    The question to you this morning is whether or not you 
would consider relocating some of these research positions to 
the sites nearest their research, because what is happening is 
there are some significant travel expenses as we are bringing 
folks up from Seattle to do the research in Alaska. You have 
the per diem. You have all those costs. Then they go back to 
Seattle to do the work.
    Again, these are great men and women in their fields. I am 
not faulting that. I would hope there would be an effort to 
look at whether or not we can station more of these fine people 
closer to the research in Alaska.
    Ms. Pritzker. Senator, I am happy to look into the location 
of our scientists and the work, and whether relocation is 
feasible or not.
    Senator Murkowski. Great. I appreciate that. We have also 
had an opportunity to talk about the research vessel, 
Fairweather. It still does not permanently reside in Ketchikan 
when it is not underway. I know there have been some 
discussions with the Coast Guard on sharing pier space there in 
Ketchikan.
    I am wondering what the status of bringing the Fairweather 
permanently to Ketchikan is, if you have any updates on that, 
or if you can give me some information as you become aware of 
it.
    Ms. Pritzker. Senator, I will have my staff get with your 
staff and talk about the situation with the Fairweather, more 
details.
    Senator Murkowski. That would be great. If there is 
anything that we need to do to make that a reality, you let us 
know on that.
    Ms. Pritzker. Thank you.

                         ELECTRONIC MONITORING

    Senator Murkowski. Keeping with fish, electronic 
monitoring. As you know, this is something that we have been 
pressing. For some time, the goal has been to be able to use 
the available technology to allow our fishermen to produce a 
system that gets the data, we want that data, but also reducing 
the cost, and reducing the physical burden of human observers 
on vessels.
    I have learned of some information recently that I find 
actually very, very troubling about the observer program. 
Observer fees cannot be used for electronic monitoring until 
the regulatory process to integrate the Electronic Monitoring 
System (EMS) part of the observer program is completed and 
implemented in 2018.
    The National Marine Fisheries Service (NMFS) needs to be 
directed to adequately fund Alaska's pre-implementation effort 
to provide for the initial equipment and infrastructures.
    I am asking if you can assure you that NMFS will be 
providing that funding for the installation of currently 
available electronic monitoring systems on our small boats 
within Alaska.
    Ms. Pritzker. Senator, you know, first of all, we are 
committed to trying to improve the electronic monitoring, and 
we think it is applicable and not in all fisheries but in some. 
We have released, I think, regional plans last year for 
incorporating electronic monitoring with the timing. We have 
actually pilots in five U.S. fisheries. We are adding seven 
more.
    You know, let me look into the specifics of the funding 
that you are worried about.
    Senator Murkowski. Let's talk about that. Again, as I said, 
Alaska has been very willing and very eager to move forward on 
this. We just need to know we are going to have some level of 
support there as well.

             PACIFIC SALMON TREATY ACT ADMINISTRATIVE FEES

    Very quickly, my final question, I met yesterday with 
commissioners of the Committee to the Pacific Salmon 
Commission. The Pacific Salmon Treaty Act is up for 
reauthorization in just a couple of years here.
    I am told there are some real concerns as they are gearing 
up for these treaty negotiations, that within the funding 
process, NOAA apparently takes 20 percent of the funds that 
come to the Commission, they get $12 million annually, 20 
percent of the funds are siphoned off, some at multiple 
junctures as administrative fees.
    So, I would like to be provided, either myself or the 
subcommittee, with the specifics on the overview of these fees, 
why they are charged, some kind of an understanding, because 
you have a very limited amount of funding that is coming, and 
they need every dime of it. So, trying to understand where 
these resources are going would be very helpful for the 
Commission as they prepare their deliberations and the leg work 
there.
    Ms. Pritzker. We will make that information available.
    [The information follows:]

    For the most recently completed fiscal year, fiscal year 2015, the 
Department of Commerce via the National Marine Fisheries Service (NMFS) 
spent approximately $12.0 million to implement the Pacific Salmon 
Treaty (PST). While the majority of the funds were issued as grants to 
States, tribes, tribal organizations, and the Pacific Salmon 
Commission, NMFS directly spent $2.5 million, or 20.6 percent, of the 
total fiscal year 2015 Pacific Salmon treaty obligations. NMFS 
expenditures can be broken into two general categories:

  --Management and administrative costs ($1.8 million or 15 percent)--
        agency functions and related services needed to support NOAA 
        mission programs. These costs include functions for 
        acquisitions and grants, budget and finance, executive 
        management, facilities and other administration, human 
        resources, information technology and legal services.
  --Program support costs ($0.7 million, or 6 percent)--which includes 
        full time permanent staff and contractual obligations that are 
        essential to NMFS' management of its work to support the PST.

    With respect to management and administrative costs, unlike many 
other Federal entities, NOAA does not have dedicated budget lines to 
fund labor and benefits, and program support costs. Therefore, these 
costs must be covered within the programmatic budget lines provided in 
the appropriation. The NOAA Finance Handbook Chapter 12, Administrative 
Costs (dated 4/19/13) outlines the process for assessing these costs 
equally across programs in the NOAA budget. This handbook prescribes 
NOAA's policies and procedures pertaining to the calculation of 
administrative costs (e.g., management and administrative costs and 
costs associated with common services). The assessment methodology for 
this calculation is based on a standard percentage of a program's 
funding--however, the percentage is not static from year to year and is 
instead a function of the amount of funds received in the PST program, 
and total management and administrative cost requirements against the 
total NMFS budget authority.
    Compliance with the policy took effect in fiscal year 2014 for all 
NMFS line offices. Starting in fiscal year 2014, NMFS West Coast Region 
and Alaska Region took into account the potential impact to the PST 
funds in response to this policy and revised their budgets to minimize 
reductions for PST project work and otherwise restore the difference to 
the PST program. Specifically, included in the fiscal year 2015 totals, 
NMFS provided $482,000 through the Fisheries Research and Management 
budget line, in addition to the dedicated funding in Salmon Management 
Activities to offset this impact for Pacific Salmon Treaty activities.

    Senator Murkowski. I appreciate that. Thank you, Mr. 
Chairman. Thank you for the additional time.
    Senator Shelby. Senator Baldwin.
    Senator Baldwin. Thank you, Mr. Chairman. As I am batting 
cleanup for the subcommittee, Madam Secretary, I am going to 
drill a little bit deeper on some of the questions you have 
already been asked.

                     CHINA'S MARKET ECONOMY STATUS

    I wanted to start with Senator Collins asked about China's 
designation as a non-market economy. I will mention that this 
is of huge importance to the State of Wisconsin. The 
designation is crucial for our industries who are often forced 
to seek trade remedies from unfairly priced Chinese products.
    So, I heard you say U.S. law rules on this, but I do want 
to ask a couple of follow up questions. In particular because 
we have certainly read accounts that the European Union may be 
looking at this in a different manner, so I would ask has the 
Commerce Department begun to undertake any formal review of 
that designation, and how would the hypothetical action of 
other countries or the European Union influence your 
examination of this issue?
    Ms. Pritzker. We have not begun a formal review of this. We 
are monitoring very carefully and talking with our colleagues 
around the world about the issues that are absolutely critical 
to make sure we are all working with the same information.
    So, this is something that is let's say a hot topic of 
conversation, but not something where we are in a formal 
process as of yet.
    Senator Baldwin. Well, I just want to stress for the record 
my strong belief that China should not be allowed to receive 
market economy status based on recent interventions in its 
currency, in its stock markets.
    I think these make clear that the country is pursuing an 
economic growth strategy that in too many cases comes at the 
expense of its trading partners, like those industries in 
Wisconsin.

                               NNMI HUBS

    A second issue that has been raised before, Senator Coons 
asked a little bit about the process, the solicitation process 
for the two new open competition NNMI hubs. I would like to 
hear also more about that process, but one of the things he was 
asking about is has there been any limitation of possible 
options or sectors.
    I want to perhaps propose widening it in the sense that our 
Nation has been very much focused on a crisis in Flint, with 
regard to very serious water infrastructure problems in this 
Nation, and at the same time, we have companies across this 
country, and universities and experts who are investigating 
technological advancements that can help us buying smart 
solutions to address these critical problems.
    The President will be hosting a water summit. I listen to 
the questions of my fellow panelists on this subcommittee of 
appropriations, probably well over 50 percent of our discussion 
was on issues relating to water and our challenges there.
    So, I guess my question is have you given the critical 
water problems facing our country consideration as you look at 
options for these NNMI hubs?
    Ms. Pritzker. Well, first of all, we are very excited. We 
have our first Request for Proposal (RFP) out on the street or 
I guess FFO is the technical term. It is open to all topics. 
There is no limitation.
    The issues around water are as it relates to manufacturing 
could be profound and significant. We are open to good ideas. 
So, I encourage folks who want to put together an institute on 
different ideas, we are open, we are all ears, and we will give 
everything good due consideration as we think about our first 
institute and hopefully multiple institutes, because there are 
so many opportunities out there. We will benefit from good 
ideas in this area.

                           TRADE ENFORCEMENT

    Senator Baldwin. Given the time, I am going to submit an 
additional question for the record.
    I just wanted to share a continuing frustration with trade 
enforcement, particularly in the paper industry in my State. 
There are new authorities that have been recently established, 
but we still have a lot of companies that are failing to find 
recourse in our law and in our processes. I would like to 
continue to work with you on those issues.
    Ms. Pritzker. Absolutely. We take trade enforcement very 
seriously, and we have the largest number of antidumping 
countervailing duty cases in the last 15 years. We appreciate 
last year the support of this subcommittee in giving us 
additional resources.
    We appreciate also the various laws that have been passed 
with the Customs bill and other bills that are giving us 
greater authorities to address a number of issues as it relates 
to trade enforcement. Thank you for your support, and we are 
happy to answer whatever questions.
    Senator Shelby. If there are no further questions--Senator 
Shaheen. I am sorry. I knew you had gone to another hearing. I 
am sorry.

                FISHERIES INDUSTRY ELECTRONIC MONITORING

    Senator Shaheen. Thank you very much, Mr. Chairman, and 
Ranking Member Mikulski, and Secretary Pritzker, for being 
here.
    I would certainly echo Senator Mikulski's praise of your 
efforts at the Commerce Department. I certainly have very much 
appreciated your responsiveness and your work to improve the 
economy in this country.
    New Hampshire's new unemployment rate is 2.9 percent, so we 
are very happy about what is happening in the State, but 
obviously, there is a lot more work to do.
    One area that I am concerned about, and I just came, I have 
been running back and forth to a hearing in the Small Business 
Committee on what is happening with the fisheries industry in 
New Hampshire and Northern New England, and I assume you heard 
that, I know, from Chairman Shelby, at the beginning about the 
at-sea monitoring program, and I assume you probably heard it 
from Senator Collins as well.
    We have a real challenge in New Hampshire because of what 
has happened to our fishing fleet, the quota in cod has been 
decimated in the last several years. They are able to fish just 
5 percent of what they were able to fish several years ago.
    I appreciate Administrator Sullivan being responsive to the 
local fishermen when she was in New Hampshire earlier or late 
last year.
    One of the things I have heard everywhere is the impact of 
the fee for at-sea monitoring that everyone is facing, $700 a 
trip, and for small boats, which is what we have in New 
Hampshire, they have to pay the same amount regardless of the 
catch, regardless of where they go, as the bigger boats.
    I know we have appropriated $300 million for the electronic 
monitoring program, but what I am being told by my fishermen is 
that they have not been approved to officially begin that 
program.
    So, I asked them, what would you like for me to say to 
Secretary Pritzker who I am going to be able to talk to later 
this morning, and their comment was tell her time is critical, 
that the fleet has been in limbo for the last year, and that we 
do not have much more time left.
    So, can you talk about what you envision doing through 
Commerce and through NOAA to help the fishermen as they are 
looking just specifically at that monitoring program and how we 
are going to move to the electronic monitoring program, which 
hopefully will make it easier for people to afford and will 
keep people in business?
    Ms. Pritzker. Well, Senator, we have five pilot electronic 
monitoring programs at this time, and we are proceeding with an 
additional seven fisheries that will do electronic monitoring. 
We have put together a regional plan.
    What I will do is have my staff work with yours to make you 
aware of what we are doing specifically in the Northeast, as it 
relates to electronic monitoring.
    The challenge that we are facing on the at-sea monitoring 
is we lost this court case, which I was just talking about a 
little bit earlier, but there may be some other alternatives 
that are being brought to my attention.
    The court case, as we understand it, is we have to spend 
our money on bycatch monitoring first, as opposed to at-sea 
monitoring, which is causing our inability or lack of 
flexibility to fund the Northeastern groundfish monitoring. 
There were some issues that were raised earlier that maybe 
there is some flexibility there.

                         COLLABORATIVE RESEARCH

    Senator Shaheen. They raised two other issues that I would 
call to your attention because I think they are important as we 
think about what can be done to support an industry so that we 
do not lose it entirely.
    One is the idea of collaborative research. Under the 
Magnuson-Stevens Act, there was some support for collaborative 
research between the agency and the fishermen and some funding 
to help with that. Their interested in being able not only have 
some of that research continue, but also allowing the industry 
to help prioritize what the research would focus on.
    I think one of the challenges that I hear from New 
Hampshire's fishing industry and all of New England really is 
that they feel like the management decisions have been made 
very much without taking into consideration the input they have 
provided, despite the hearings that have been held, despite the 
various bodies that are supposed to bring back those views, 
there is still this feeling out on the line where people 
actually have the fishing boats and are doing the work that 
they are not being heard.
    So, that is one area that I think might not only provide 
some more helpful information, but might also make people feel 
like they are being heard.

                     TRANSPARENCY IN QUOTA LEASING

    The other issue is the transparency in the quota leasing. I 
understand again there are privacy rules, and we need to 
respect those, but as one person explained it to me, he said it 
would be like trying to sell your house without knowing what 
any of the prices are for homes in your neighborhood.
    So, whatever we can do to provide more transparency in the 
quota leasing, I think, would also be helpful as we are looking 
at trying to save this industry.
    I do not know if you want to respond to either of those.
    Ms. Pritzker. Let me just respond briefly, and then we 
would like to get together with your staff and go in more 
detail. In terms of collaborative research, you know, I am a 
fundamental believer research needs to be collaborative and 
needs to reflect what industry feels is going to be of a high 
payoff.
    We talked earlier about how do we get more lab to market, 
and it applies to fish as much as it does to manufacturing and 
other areas.
    The second is transparency, I am a believer in 
transparency, particularly when it comes to being able to offer 
services, et cetera, in a leasing program, so we should work on 
that together as well, and we would love the help or insights 
from your staff as to what we could be doing differently.
    Senator Shaheen. Thank you very much.
    Ms. Pritzker. Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Shelby. If there are no further questions, Senators 
may submit additional questions for the subcommittee's official 
hearing record. We will request, Madam Secretary, that the 
Department of Commerce respond within 30 days.
    [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 Barbara A. Mikulski
                      american manufacturing jobs
    Question. In the fiscal year 2017 budget request, NIST funds two 
programs aimed at making American manufacturing more competitive: the 
Manufacturing Extension Partnership, which helps small- and medium-
sized manufacturers create or retain jobs, and the new National Network 
for Manufacturing Innovation (NNMI) Institutes, which will identify 
challenges that could make whole sectors of the economy more 
competitive.
    The President has also requested $1.9 billion in one-time mandatory 
funding for NNMI, which would fund 45 institutes government-wide, 
including at the Department of Defense and the Department of Energy.
    How does the Department plan to help create jobs in the long run? 
What role will the manufacturing institutes play?
    Answer. The NNMI Strategic Plan describes in some detail the work 
force goals, and the first NNMI Annual Report describes how some of 
institutes are already implementing these goals. These reports were 
released on February 19, 2016 and state:

    Each institute in the NNMI is a public-private partnership of 
companies, academia, State and local governments, and Federal agencies 
that co-invest in developing world-leading technologies and 
capabilities. In order to ensure that U.S. manufacturing will be 
successful in key advanced technology areas, each institute promotes 
the creation of a stable and sustainable innovation ecosystem for 
advanced manufacturing. To accomplish this each institute has two 
primary purposes:

    1.  To create effective manufacturing research collaboration spaces 
for industry and academia to solve industry-relevant problems, thereby 
nurturing innovation and accelerating commercialization of promising 
technologies.
    2.  To build workforce skills at all levels in these advanced 
technologies, thereby enabling the advanced manufacturing workforce of 
tomorrow.

    Both thrusts are essential to creating new manufacturing jobs in 
the long run as U.S. manufacturing hubs are strengthened and new hubs 
are created. The NNMI program is structured around the understanding 
that America is at its strongest and best able to create good, high-
paying jobs when we work together and make full use of our human 
resources. Connected through each institute and through the larger 
network of institutes, communities of researchers enable cutting-edge 
production technologies to be readied for use by industry. These 
talented, knowledgeable, experienced professionals provide real-world 
training for the next generation of our industrial workforce--who will 
then, in turn, gain access to high-paying advanced manufacturing jobs.
    To increase the competitiveness of U.S. manufacturing and develop 
the new technologies that provide high-paying private sector jobs in 
manufacturing, the NNMI program catalyzes the advances in new enabling 
technologies, production materials, processes, information, and 
products. Operating through Federal cooperative agreements for their 
first 5 to 7 years, the institutes work to move technologies capable of 
being produced in a laboratory environment to capable of being 
manufactured in a production representative environment. For decades, 
many new technologies developed in the United States have been 
manufactured and commercialized by other countries because of the 
failure to bridge this important gap, with the resulting benefits of 
high paying technology-driven jobs that could have been created in the 
United States instead going to those countries. Recent examples include 
flat panel displays, memory chips, lithium-ion batteries (with 
increasing spin-off applications in electric and hybrid cars and 
electric grid storage), and photovoltaic cells.
    The manufacturing capacity in emerging high technology areas 
requires employees with training in new technologies such as additive 
manufacturing (3-D printing), flexible hybrid electronics, and 
integrated photonics. The U.S. currently faces a severe shortage of a 
workforce with the skills to enter these high paying, quality jobs. 
Thus, the second primary thrust of the NNMI institutes is to ensure 
that a workforce is trained in the new technologies developed by the 
institutes as those new technologies are being developed, ensuring that 
American workers are available in these fields and are better prepared 
to work in them than workers anywhere else.
    The institutes accomplish this goal in a number of ways, including: 
(1) nurturing future workers for STEM related work through a range of 
outreach efforts and by providing internships and apprenticeships; (2) 
supporting, expanding, and communicating secondary and post-secondary 
pathways, including credentialing and certifications in relevant 
advanced manufacturing areas that they are developing; (3) supporting 
the coordination of State and local education and training curricula 
with advanced manufacturing skill-set requirements; (4) training 
advanced-knowledge workers as researchers and engineers; and (5) 
identifying the competencies needed by the next generation of workers.
    Additionally, the MEP program at NIST complements the NNMI 
workforce efforts in a number of ways. First, the MEP centers will be 
instrumental in assisting small and mid-sized manufacturers (SMMs) 
understand the new technology and support adoption of the technology to 
help grow their companies. This will in turn create opportunities for 
enhancing the existing workforce and the creation of new jobs. Second, 
the MEP centers work with both the institutes and local education 
providers (career and technical education centers, community colleges, 
and universities) to ensure that the workforce skills needed by SMMs 
are available for improving the existing workforce and preparing the 
future workforce. This occurs through both the institutes' workforce 
development efforts, in which MEP is frequently a direct participant 
and the embedding of MEP center personnel in the institutes to better 
understand each institute's technology portfolio and how that can be 
transferred to small manufacturers.
    Question. What steps will NNMI take to bring back manufacturing 
jobs that have been moved offshore?
    Answer. Each institute provides critical workforce training and 
skills development in its technology area. By bringing to the table the 
entire supply chain associated with a particular developing technology, 
an innovation community emerges that will later form the basis of 
mature larger-scale manufacturing supply chains located within the 
United States. The combination of workers and technologies, including 
newly created processes and tools, creates a competitive advantage for 
U.S. manufacturers and small businesses as they work together develop 
domestic supply chains to manufacture new products to meet global 
demand. This combination can provide American workers with high-
quality, well-paying jobs while also increasing demand for jobs 
throughout the supply chain.
    All of the institutes are working diligently with a large number of 
Original Equipment Manufacturers (OEMs) and universities in many States 
to anchor the development and the manufacturing of innovative products 
within the United States.
    In addition to NNMI efforts, small manufacturers can also take 
advantage of NIST MEP's Supply Chain Optimization services to decide 
where and how to participate in the new and existing supply chains 
created by the institutes' technologies. MEP's total cost of ownership 
(TCO) tool helps small manufacturers evaluate the costs and risks 
associated with their products in any given supply chain and market. 
This information helps small manufacturers expand their business in the 
United States and increase their hiring needs by strengthening their 
relationships with OEMs and higher level suppliers.
    MEP was also a key partner, along with the Department of Commerce's 
Economic Development Administration (EDA) and the Department of Labor's 
Employment and Training Administration (ETA), in the ``Make it in 
America'' (MiiA) Challenge. The overall objective of the MiiA Challenge 
is to make it more attractive for businesses to re-shore, build, 
continue, or expand their operations in the United States. Ten MEP 
centers are participating, providing a wide range of technical and 
business assistance to encourage and support reshoring, improve supply 
chains, and develop the manufacturing workforce. Key programs and 
services offered among these include: supply chain optimization, 
supplier scouting, technology acceleration--linking SME's to NNMI 
Institutes and other Federal technology research, and Continuous 
Improvement. Projects are helping companies find new customers, develop 
new products, improve their processes and workforce, retain workers, 
and add jobs.
    Already, these efforts are helping businesses in America to create 
and retain jobs. For example, PowerAmerica, one of the NNMI institutes, 
has been credited with helping save 400 jobs at a manufacturing 
facility in Lubbock, TX. The manufacturer developed a plan to reinvent 
itself by upgrading equipment and by forming new commercial 
partnerships to manufacture the technology being developed by 
PowerAmerica. See:

  --In-Depth Look: How Manufacturing Hubs Helped This Business 
        Innovate,

    https://www.whitehouse.gov/blog/2016/04/04/depth-look-how-
manufacturing- 
    hubs-helped-business-innovate

  --X-FAB: making six inch Silicon Carbide a reality,

    http://www.powerelectronicsworld.net/article/0/98959-x-fab-making-
six-inch-sic-
    a-reality.html

  --Monolith Semiconductor Relocates Headquarters to Round Rock,

    http://roundrockchamber.org/monolith-semiconductor-relocates-
headquarters-to-
    round-rock/
    Question. How do the Department's manufacturing goals tie in with 
your role of promoting American exports?
    Answer. The NNMI program seeks to increase the competitiveness of 
domestic manufacturing by fostering American leadership in advanced 
manufacturing research, innovation, and technology development and 
deployment to increase the production of goods in the United States. 
Achieving this overarching goal strengthens American manufacturers' 
ability to sell their goods to global markets.
    The NNMI Program works by creating an enduring network of topically 
focused manufacturing innovation institutes that function as research 
and development hubs where U.S. industry and academia collaboratively 
solve complex, government and industry-relevant manufacturing problems. 
Each institute in the network can include unique shared user facilities 
otherwise inaccessible to institute members, especially small and mid-
sized enterprises. These shared facilities lower the financial and 
technical risks associated with further developing and maturing 
promising early stage manufacturing technologies, and encourage 
productive private-sector domestic manufacturing partnerships.
    Strengthening domestic innovation ecosystems is critical to 
national competitiveness. Each institute creates and supports a 
regional manufacturing ecosystem. Connecting the institutes into a 
network amplifies their impact on advanced manufacturing, benefitting 
the entire Nation and improving the ability of the United States to 
compete internationally for manufacturing investment. The network 
facilitates knowledge transfer between institutes that makes each 
institute operate more efficiently, and increases the impact of the 
NNMI Program's outreach activities.
    A crucial aspect of U.S. competitiveness is the ability of domestic 
manufacturers to increase their manufacturing capabilities and 
capacities to respond in a timely manner to global market demand. The 
NNMI program serves an important role by creating an effective advanced 
manufacturing research and development infrastructure. The program 
brings together the private sector, academia, and government at all 
levels to develop and deploy advanced manufacturing technologies that 
strengthen the competitiveness of the United States.
    NIST MEP is currently fielding the ExporTech program to help small 
U.S. manufacturers prepare to export their products. The intent of 
ExporTech is to work with manufacturers to help them prepare an 
actionable exporting plan and be ready to take advantage of the export 
resources of ITA and the States. The program consists of 3 sessions 
over 4 months covering all aspects of understanding and preparing to 
export. Since 2006, NIST MEP through the MEP System has:

  --Conducted 152 ExporTech sessions via MEP Centers
  --31 States have completed an ExporTech program
  --803 clients have completed the program
  --17 ExporTech sessions are scheduled through the end of calendar 
        year 2016.

    On average, the companies that have completed the program have 
achieved the following impacts:

  --$500,000-$700,000 average sales increase/retention per company
  --$91,000 average cost and investment savings per company
  --$400 million in total program sales (new/retained) to date
  --$12,000 average follow-on sales for centers per client.

    The principles and practices of the ExporTech program apply as well 
to products based on the new technologies being deployed from the 
Institutes and would be expected to have similar positive export 
results for those companies.
                  cybersecurity and digital leadership
    Question. The private sector is facing increased risk from cyber 
threats, including small- and medium-sized businesses. Every day, 
cyber-criminals are stealing information and profiting from the 
American people and American companies that need a civilian 
cybersecurity agency to help them respond to those threats. Many of the 
underlying issues do not facially address cybersecurity, but seem more 
like innovation. Digitizing our world means that we must discuss the 
safety and security of medical devices, self-driving cars, and the 
Internet.
    What are NIST and the Department of Commerce doing to help U.S. 
companies defend themselves and their customers against attacks? What 
role does the National Cybersecurity Center of Excellence (NCCoE) play?
    Answer. With programs focused on national priorities including the 
Smart Grid, electronic health records, forensics, atomic clocks, 
advanced nanomaterials, computer chips and more, NIST's overall mission 
is to promote U.S. innovation and industrial competitiveness by 
advancing measurement science, standards, and technology in ways that 
enhance economic security and improve our quality of life.
    In the area of cybersecurity, NIST has worked with Federal 
agencies, industry, and academia since 1972, starting with the 
development of the Data Encryption Standard, when the potential 
commercial benefit of this technology became clear. NIST's role to 
research, develop, and deploy information security standards and 
technology needed to protect information systems against threats to the 
confidentiality, integrity and availability of information and 
services, was strengthened by the Computer Security Act of 1987, 
broadened by the Federal Information Security Management Act of 2002 
(FISMA), and reaffirmed in the Federal Information Security 
Modernization Act of 2014.
    In support of NIST's overall cybersecurity program, the National 
Cybersecurity Center of Excellence (NCCoE) turns cybersecurity 
standards and best practices into practical solutions to solve problems 
faced by companies across many sectors. The Center currently has 24 
core partners, from Fortune 50 market leaders to smaller companies 
specializing in IT security and a support center with hardware, 
software and expertise.
    The NCCoE collaborates with experts from industry, academia, and 
government to identify specific technical cybersecurity problems that 
affect entire industry sectors or reach across sectors. The NCCoE then 
identifies applicable standards and best practices and collaborates 
with the creators of commercial off the shelf products and services to 
use in developing example solutions. The example solutions are 
documented in NIST Cybersecurity Practice Guides that show businesses 
how to put these example solutions into practice for themselves in ways 
that align with relevant standards and best practices.
    Today, the NCCoE is working with key business sectors, including 
financial services, energy, healthcare, transportation and consumer/
retail. Examples of projects include Security for Wireless Infusion 
Pumps, Mobile Device Security, Situational Awareness for the Energy 
Sector and Derived Credentials. These projects will result in 
demonstrations and practice guides that explains to companies how to 
implement the demonstrated security platforms in a manner that solves 
business problems and otherwise improves companies' defenses against 
cyber-attacks consistent with NIST's cybersecurity standards and 
guidelines.
    Question. Commerce has also requested $6.4 million for a Digital 
Services leadership team that reports directly to you on overarching 
Internet and technology challenges faced department-wide. Access to the 
digital world is revolutionizing business; the Internet is the library 
and meeting ground of today and of the future. That means the 
Department of Commerce also needs to change the way it does business.
    How will this digital leadership team bring the lessons and 
methodology of the NCCoE to the Department?
    Answer. The Department of Commerce's digital leadership team and 
NIST's NCCoE are coordinating on activities to see where there are 
opportunities for collaboration or for the leadership team to build on 
NCCoE outputs. The Department will encourage the organic implementation 
of developed technologies and provide feedback and lessons learned.
                            shared services
    Question. The Department of Commerce is proposing to revamp its 
Department-level support services, including HR, IT, Finance and 
Accounting Systems, and Acquisitions and Grants Management functions, 
under a new initiative called, ``Shared Services.''
    The Department claims that the Shared Services initiative will save 
money and improve service in the long term, but will not cost 
Department employees their jobs.
    Can you explain the math on this assertion?
    Answer. The ``Shared Services'' initiative is being launched to 
drive performance improvement and customer service across the four 
functional areas--HR, ACQ, IT and FM in order to allow a stronger focus 
on mission. Across the four functional areas an extensive assessment of 
each process highlighted that current service delivery in these 
functional areas is sub-standard at best and, in some cases, places the 
achievement of mission priorities at risk due to the amount of time 
spent on routine, transactional tasks.
    As far as cost savings, through business process re-engineering, 
economies of scale and place, and strategic sourcing (also known as 
``category management'') of commodity goods, organizations that employ 
the shared services model can mitigate rising variable costs. This will 
be accomplished after several years of grouping the purchase of 
transactional goods across the entire organization and working to 
streamline processes. This cost avoidance can yield higher volumes and 
improved service delivery. For example, the overall operating costs of 
the service delivery are projected to be significantly lower than the 
current state.
    There will be no job losses for several reasons: (1) the Secretary 
has committed that there will be no reductions in force, (2) there are 
numerous vacancies within the in-scope functional areas (e.g. 120 
vacancies in human resources alone, which is 20 percent of the total 
human resources professionals workforce), and (3) the assessments made 
clear that much of the high-value strategic work of the mission-
enabling functions (e.g. strategic workforce planning) is not currently 
being performed since professionals are spending so much of their time 
processing routine transactions. As a result, there will be ample 
opportunities for anyone to be trained for, and step into, those higher 
value positions within the organization.
    Question. Should we be focusing on supporting our own workforce, 
rather than hiring contractors to cut costs?
    Answer. By supplementing our workforce with contractors, we are, in 
fact, providing tremendous support to our own workforce. Much of our 
professionals' time (estimated in the assessments to be about 65 
percent of their time) is spent answering questions about status of 
actions, handling paperwork, and conducting routine transactional work. 
This is done at the expense of the higher-value strategic work that 
they have been educated and trained to do. As a result, the higher-
value work we need them to do is seldom performed. Even on the 
transactional side, our workforce is not able to keep up, because they 
struggle to fill vacancies of their own. That's why we have a backlog 
of more than 3,000 funded position vacancies across Commerce, 
antiquated information technology services, and acquisitions that fail 
to meet program requirements.
    In recognition of this, Commerce made the decision to contract with 
a commercial firm for support services (see background immediately 
below), realizing that it is a temporary fix to a systemic problem. One 
outcome that we are all passionate about is building a better pipeline 
to address the shortfall in HR professionals. As we free up our more 
senior staff, who have been conducting lower-level transactional work 
for years, it is our hope that those more strategic, mission-connected 
jobs become more and more attractive and establish a clear career path 
for employees. As the outside vendor is able to bring talented 
transactional staff, it can potentially create a pool of employees who 
become familiar with the mission of Federal agencies and can look to 
strategic positions within the Federal Government as growth 
opportunities to strive for.
    Additional Background for this Response: Of the more than 3,000 
funded vacancies mentioned above, 120 are in the human resources (HR) 
area. Akin to all Federal Government agencies, Commerce has had a 
difficult time finding qualified people to fill these HR positions 
because there simply isn't a sufficient supply of talent in the 
immediate Washington area. As a result, our small population of HR 
professionals (only 550 across Commerce) has too much on its plate. The 
Office of Personnel Management (OPM) recommends a ratio of 1 HR 
professional to 60 employees; Commerce's effective ratio is 1 to 85.
    As part of the shared services effort to improve customer 
satisfaction and service delivery of HR and other services, we analyzed 
all of our services process by process to determine how best to deliver 
them. Other than payroll and systems support, there is either 
insufficient capacity or a lack of capability among the Federal 
providers to support some of our most urgent HR transaction needs. For 
instance, when it comes to recruiting and hiring, we have turned to OPM 
for support in the past, but they, themselves, admit they don't have 
the capacity to support the volume of work we require. When we turned 
to Treasury and Agriculture for support with processing personnel 
action requests and recruitment and hiring activities, we were informed 
that they could provide the software but not the people to assist with 
the transactions.
    Therefore, we thought our operations would be best served if we 
turned to the private sector to supplement our resources. Again, there 
will be no Reductions in Force. We are planning to leverage the 
capabilities of a commercial firm to fill a gap in skills and capacity. 
The vendor will afford us the flexibility to surge in capacity when 
needed to address backlog, but then scale back as necessary without any 
adverse implications. Their first priority is to help us recruit 
qualified professionals to help us deliver our mission. We'll also be 
asking them to perform other transactional-type work, such as personnel 
action request processing, job classification, and benefits 
administration. In so doing, our people will be free to perform the 
higher-value work, such as hiring and onboarding, workforce planning 
and training that has been lacking when the urgent takes over the 
strategic.
    Question. The development of the Shared Services initiative has 
been in progress for some time, but the Department proposes to 
implement the initiative through a reprogramming request, rather than 
asking for it under the regular appropriations process.
    If this initiative is so urgent, why was it not included in the 
fiscal year 2016 budget request?
    Answer. This is an urgent initiative and that is why we are 
requesting to fund it outside of the timing of the annual budget cycle. 
We faced the dilemma of having enough information developed to support 
the request versus waiting until another budget year to submit the 
request. The underlying problems associated with these functional areas 
have existed for years. However, they have only become acute--truly 
adversely affecting the achievement of mission objectives--in recent 
years, which is why we wrestled with the dilemma of balancing the acute 
need with the timing of budget submissions.
    With the establishment of ``Operational Excellence'' as a strong 
tenet of the Commerce Strategic Plan in 2014, Departmental leadership 
considered multiple means for fixing the problems. However, it was not 
until July 2015 that the shared services assessment (Phase I of the 
project) was fully completed. Without that comprehensive assessment of 
the performance across all four functional areas--including a detailed 
look at each individual process within those functions to inform which 
sets of services should be delivered in a shared way and which should 
remain in each Bureau--a Budget initiative could not be prepared. By 
that time, the Department's fiscal year 2016 budget had already been 
submitted.
    Question. If it is not urgent, why can't the initiative be 
considered by the full Congress as a proposal for fiscal year 2017?
    Answer. As noted earlier, this is an urgent initiative. The sub-
standard performance of our support functions is adversely affecting 
the bureaus' achievement of their missions. Unless we fix these urgent 
performance problems now--and we believe shared services is the 
answer--we will have mission-related failures that will be more 
difficult to explain. Through the shared service initiative which 
covers human resources (HR) acquisitions (ACQ) information technology 
(IT) and financial management (FM), the Department will be able to make 
sure each of its bureaus is able to more effectively meet its mission 
obligation to the American people.
    When we met with your staff in the fall of 2015 we expressed intent 
to issue an RFP for HR services as part of the GSA schedule. Commerce 
has now concluded that competitive process and is poised to award that 
HR services contract.
                                 ______
                                 
            Questions Submitted by Senator Susan M. Collins
    Question. The 2006 Softwood Lumber Agreement, which established 
export charges and quota limitations on Canadian softwood lumber 
imports into the United States, expired in October of last year. This 
was a highly complex agreement that dealt with differing patterns of 
land ownership and stumpage fees in Canada. The agreement also included 
exemptions for mills in the Atlantic Provinces and along Maine's 
western border that did not benefit from the crown lands.
    I understand that the Office of the U.S. Trade Representative has 
had preliminary discussions with their Canadian counterparts on the 
parameters for negotiating a new agreement. While USTR is the lead on 
this issue, the Department of Commerce will play an important 
consultative role when talks between the two countries are formally 
underway. It is extremely important that we secure an enforceable 
agreement that addresses Canadians subsidies, where they occur, that 
detrimentally affect U.S. markets. The relationship between the U.S. 
and Canadian forest industries is complex and often symbiotic. Getting 
a Softwood Lumber Agreement that acknowledges these realities and 
includes a strong enforcement mechanism is essential.
    Will you commit to making this a priority this year?
    Answer. Yes, working toward a Softwood Lumber Agreement (SLA) is a 
priority of the Obama administration and the U.S. Department of 
Commerce. Although USTR has the primary responsibility for 
administering the agreement that expired and negotiating a possible new 
agreement, we have played an active role in the interagency process of 
monitoring the agreement, and providing input for negotiating the new 
agreement. In addition, for more than a year before the expiration of 
the SLA, the United States consulted intensively with a range of 
domestic stakeholders and we understand the importance of this program 
to Maine businesses. The United States continues to consult closely 
with domestic stakeholders as needed and stands ready to engage with 
Canada to ensure fair and stable conditions for trade in softwood 
lumber that reflect current market realities. Finally, we have 
participated in interagency communications with the Government of 
Canada regarding the operation of the agreement. In that regard, the 
Department has a range of expertise that is useful in terms of 
monitoring existing agreements and negotiating a possible new 
agreement.
    Question. I recognize that NOAA Fisheries has a court-ordered 
responsibility to satisfy the observer coverage standard of the 
Standardized Bycatch Reporting Methodology (SBRM), but I remain 
concerned about the decision to fund such activities by decreasing 
funding for at-sea monitoring. My colleague Senator Ayotte recently 
questioned Deputy Assistant Administrator Sam Rauch about NOAA 
Fisheries' ability to identify alternative funds within NOAA that could 
be used to satisfy at-sea monitoring costs.
    Mr. Rauch responded saying ``the court found that [NOAA Fisheries 
has] to spend the money on other priorities before [they] spend it on 
at-sea monitoring,'' and they are ``not allowed'' to fund ASM from 
other departmental sources. The language of the SBRM Omnibus Amendment, 
however, seems to give NOAA Fisheries the authority to do just that. 
The amendment reads: ``If additional funds for observer sea days were 
available from another funding source . . . those observer days could 
be allocated according to other priorities and would not necessarily be 
allocated according to the SBRM process. Such other funding sources 
could include funding for observers dedicated to monitoring at-sea 
interactions under the Marine Mammal Protection Act or the Endangered 
Species Act, or funding dedicated for management purposes, such as 
monitoring catch share programs.'' Mr. Rauch's position that NOAA 
Fisheries' hands are essentially tied appears to directly conflict with 
the language of the amendment.
    Do you agree with Mr. Rauch's assessment? Moreover, what efforts 
has NOAA Fisheries made to identify possible alternative funding 
sources to pay for at-sea monitoring?
    Answer. NMFS has considered and will continue to consider 
alternative funding sources to pay for or provide additional at-sea 
monitoring. However, alternatives identified to date would result in a 
loss of funding to critical NMFS requirements in other parts of the 
country, such as for the more than 30 observed fisheries around the 
Nation. In addition, funds provided by Congress for activities under 
the Endangered Species Act or the Marine Mammal Protection Act must be 
used to support implementation of those statutory requirements.
    While we recognize the economic challenges presented by the 
transition to industry paying for at-sea monitoring costs, based on 
industry's approach to sharing costs, we understand their costs per sea 
day are substantially less than what NMFS paid. NMFS will continue to 
work with the New England Fishery Management Council and groundfish 
sectors to evaluate and improve the monitoring and accountability 
system within the New England groundfish fishery.
    Question. I have heard from constituents in Maine who are very 
concerned that funding appropriated for fishery management activities 
under the Atlantic Coast Act is not reaching the 15 Atlantic States. 
The Atlantic states are primary management partners of NOAA Fisheries 
and co-manage eight fisheries with the agency. This Committee has been 
increasing the ``Regional Councils and Fishery Commissions'' budget 
line. These increases, however, have been allocated solely to the 
Federal fishery management councils, with no additional funds 
supporting the Atlantic Coastal Act. While the regional councils 
certainly perform critical work, your partner State fishery management 
agencies along the Atlantic Coast are being forced to reduce their data 
collection efforts, staffing levels, and law enforcement resources. 
This adversely affects a number of important commercial fisheries, like 
the lobster fishery in Maine.
    Can you explain why the funding increases that this Committee has 
provided for the Councils and Commissions line have not reached the 
Atlantic States? Furthermore, what actions will NOAA Fisheries take to 
ensure that its partner fishery management agencies along the Atlantic 
Coast have the capacity to carry out their critical work?
    Answer. The majority of the funding increases since fiscal year 
2008 to the Regional Councils and Fisheries Commissions budget line 
were in response to specific requests such as supporting the Regional 
Fishery Management Councils in implementing changes in our approach to 
fishery management after the Magnuson-Stevens Act was reauthorized in 
2007 and implementing annual catch limits. Since 2014, increases for 
the Councils and Commissions have only covered inflationary costs.
    NOAA recognizes the important role the States play as partners in 
sustainably managing our Nation's fisheries. The State's work includes 
data collection and analysis that supports fish stock assessment 
models, enforcing fishery regulations, and the co-management of eight 
different fisheries. NOAA is working with the State fishery commissions 
and the State directors to find ways to provide additional support for 
the States within the fiscal year 2017 budget to ensure that our 
partnerships can continue to promote economically and ecologically 
sustainable fisheries.
                                 ______
                                 
          Questions Submitted by Senator Shelley Moore Capito
    Question. After millions of dollars have been invested in the area 
of broadband deployment, we are still not where we need to be, 
especially in West Virginia--the most recent report having us third 
worst in the country. Are you satisfied with the standards of 
measurement? For example, the FCC definition of standard broadband is 
25 Mbps while the Connect America Fund requires to build to a minimum 
of 10 Mbps. In States like mine, I worry this is setting us up for 
failure, discouraging carriers to build beyond 10 Mbps. What is your 
goal for States like West Virginia? What actions are you taking, and 
that we can support you in, toward expanding access, measuring 
connectivity, and developing technology, particularly in rural areas?
    Answer. While much progress has been made in bringing broadband to 
unserved and underserved areas of the country, there remain significant 
challenges to delivering Internet access to many of the most rural and 
difficult to connect areas of the country. In such areas, the cost of 
deploying ubiquitous high-capacity fiber facilities can make providing 
service prohibitively expensive. This certainly includes parts of West 
Virginia and similar rural areas across the country.
    Responding to the demand for broadband in underserved areas 
requires creative and flexible approaches. For example, in very high 
cost areas, wireless and satellite broadband will certainly be part of 
the answer. The Federal Communications Commission (FCC) recognized this 
need for flexibility in its recent order establishing new rules to 
allocate $2 billion over the next 10 years in Connect America Fund 
(CAF) support to expand broadband deployment in targeted rural areas 
through competitive bidding. To encourage a wide range of bidders and 
ensure a more competitive auction, the FCC set technology-neutral 
performance tiers with varying levels of speed, usage allowances, and 
latency requirements. While the FCC allows for broadband services as 
low as 10 Mbps downstream and 1 Mbps upstream (10/1 Mbps) to qualify 
for universal service support as the minimum performance tier, the FCC 
will give more weight to bids that offer better performance in rural 
areas. The FCC also made clear that 10/1 Mbps is not its end goal and 
it expects recipients of CAF support to innovate and provide better 
service over the 10-year term.
    The Department of Commerce, principally through NTIA, is committed 
to tackling the hard work needed to reach those communities where 
geography and economics render broadband deployment, competition, and 
adoption difficult to fully realize. NTIA continues to take action 
through its BroadbandUSA initiative to offer communities the technical 
assistance and support they need to overcome their unique challenges 
hindering investment in broadband infrastructure and adoption. NTIA is 
also assisting local communities to attract broadband deployment 
through both Federal assistance and private investment. Our goal for 
States such as West Virginia is to have continued funding to ensure 
that we can help their communities be digitally inclusive and have the 
broadband capacity necessary to participate fully in the digital 
economy.
    Moreover, the Department has demonstrated a longstanding commitment 
to promoting broadband deployment and adoption in unserved and 
underserved areas of the country, including West Virginia. Under the 
Broadband Technology Opportunities Program (BTOP), for example, NTIA 
awarded a $126.3 million grant in 2010 to the Executive Office of the 
State of West Virginia (West Virginia) to bring high-speed broadband to 
this underserved region by expanding and improving the State's 
microwave public safety network. Through this grant, West Virginia was 
able to deploy 675 new network miles, established 554 new wireless 
links, established 623 new or upgraded interconnection points, and 
connected 1,127 community anchor institutions to new or improved 
broadband service at speed tiers ranging from 100 Mbps to 1 Gbps. The 
project connected all public K-12 schools and libraries throughout the 
State to the high-speed network to enhance both classroom and distance 
learning opportunities. As a result of the BTOP project, all schools in 
West Virginia had access to broadband of at least 100 Mbps, if they 
wanted it. The BTOP grant also allowed West Virginia to upgrade 
Internet access and capacity at critical public safety communications 
sites, including healthcare facilities, State and local law enforcement 
agencies, fire departments, and county courthouses.
    Additionally, NTIA awarded a $3.2 million grant in 2010 to Hardy 
Telecommunications to build the Hardy AnchorRing, a middle-mile fiber 
optic network traversing Hardy County, West Virginia. By project 
completion in December 2012, Hardy deployed 123 miles of fiber that 
brought network reliability and high capacity bandwidth to this rural 
area for the first time. More than 63 community anchor institutions 
received new or improved broadband connections at speeds up to 1 Gbps 
through direct connection to the Hardy network, including 11 medical/
healthcare providers, seven K-12 schools, nine public safety agencies, 
and 28 other government offices.
    In 2009, NTIA awarded $1.4 million to the West Virginia Department 
of Commerce, Geological and Economic Survey (WVGES) to manage the State 
Broadband Initiative grant for the State and later amended the project 
to continue broadband data collection and supplemental activities for 
an additional 3 years, increasing the total Federal funding to $4.74 
million. In addition to compiling broadband mapping data from 23 total 
providers, the team awarded nearly $1.5 million in mini-grants to 70 
recipients using broadband technology to address various community 
needs. There were a number of awards for county governments to improve 
citizen services, and other uses of the funding went to public safety 
and emergency services, energy and the environment, economic 
development in rural regions, education and remote delivery, 
telemedicine, library services and agriculture entities. One 
particularly successful grant was the creation of 
ManufacturersMatch.com, a resource allowing manufacturers to contact 
each other and for staff at research institutes to collect and share 
information. The team also developed 11 regional plans, which defined 
areas most in need of guidance on deploying resources for broadband 
expansion, and launched a wireless hotspot application. The project 
resulted in closer relationships between and among State and Federal 
agencies. It also enhanced university partnerships for workforce 
development, most notably the partnerships emerging from the mini-grant 
program that involved creating a virtual teaching center for culinary 
arts students.
    With the near completion of the BTOP grant program, NTIA is 
transitioning efforts to its BroadbandUSA program, which applies 
learnings and expertise developed from BTOP to help communities and 
tribes expand their broadband access and adoption. BroadbandUSA is 
providing expert, impartial advice and field-proven tools for assessing 
broadband adoption, planning new infrastructure, and engaging a wide 
range of partners in broadband projects. Our technical assistance 
ranges from workshops and webinars to more personalized one-on-one 
community assistance. In rural areas, technical assistance focuses on 
how communities and tribes can address the need for broadband 
infrastructure and adoption through planning, partnerships, and 
technology choices.
    Through BroadbandUSA, NTIA can help communities navigate complex 
government rules and grant programs; find the best way to design and 
deliver a broadband adoption program; and attract broadband investment. 
For example, one municipality has requested guidance from BroadbandUSA 
on how the city should invest funds to support projects that would 
increase local broadband infrastructure and access to technology, 
including adding fiber in manufacturing districts and additional 
hotspots. BroadbandUSA helped local officials develop a strategic 
broadband plan for a small, rural Western city. And, BroadbandUSA has 
helped local officials develop and deploy a broadband adoption program 
to help residents of a public housing community build digital literacy 
skills. To date, NTIA has provided technical assistance to rural, 
tribal and urban communities in 30 States and has held six regional 
workshops to bring community and industry stakeholders together to 
discuss how best to support their broadband needs. NTIA has also 
released field-tested guides such as our Broadband Adoption Toolkit, 
Public-Private Partnership Guide, Guide to Federal Funding of Broadband 
Projects and Planning a Community Broadband Roadmap to assist and 
inform local community broadband efforts.
    Additionally, in March 2015, President Obama created the Broadband 
Opportunity Council, composed of 25 Federal departments and agencies, 
to determine what actions the Federal Government could take to 
eliminate regulatory barriers to broadband deployment and to encourage 
investment in broadband networks and services. The Departments of 
Commerce and Agriculture co-chair the Council. In September 2015, the 
White House released the Council's report, which describes 36 concrete 
steps the member agencies will take to reduce barriers and promote 
broadband investment and adoption. Once implemented, these agency 
commitments will make a meaningful difference to communities seeking to 
expand and enhance their broadband capacity.
    As one of NTIA's commitments outlined in the Council's report, the 
Community Connectivity Initiative will support communities across the 
country with tools to help accelerate local broadband planning and 
deployment efforts. NTIA, in close collaboration with its partners, 
will create a comprehensive online assessment tool to help community 
leaders identify critical broadband needs and connect them with 
expertise and resources. The online tool will provide a framework of 
benchmarks and indicators on access, adoption, policy, and use for 
communities. NTIA is partnering with several communities and 
organizations to help develop the measurements for the tool and make it 
useful for communities. NTIA expects to launch the tool later this 
year.
    NTIA, in collaboration with the Federal Communications Commission, 
is well on its way to meeting the President's direction to make an 
additional 500 megahertz of spectrum available for wireless broadband 
by 2020. NTIA's Office of Spectrum Management and its Institute for 
Telecommunication Science continue to study, develop and test tools and 
methodologies for the expansion of spectrum sharing to help meet 
escalating demand for access to this critical resource.
    NTIA has regularly sponsored comprehensive national surveys of 
computer and Internet use through the Census Bureau's Current 
Population Survey. Through these surveys, the most recent of which was 
conducted in July 2015, NTIA collects data on the devices Americans 
use, locations of Internet use, online activities, and challenges that 
inhibit some Americans from taking full advantage of these 
technologies. NTIA's Digital Nation reports draw on the collected data 
and enable policymakers to craft programs that better serve Americans 
who find themselves on the wrong side of the digital divide, while also 
shedding light on current challenges in related policy areas like 
online privacy.
    NTIA's sister bureau, the Economic Development Administration 
(EDA), has had tremendous success in establishing vital links between 
distressed and high-tech communities by funding telecommunications 
infrastructure as a fundamental component to bridging the technology 
gap. Targeting ``last mile'' solutions that build upon the 
administration's Broadband Technology Opportunities Program, EDA can 
provide both planning and implementation support for broadband to help 
communities and regions build the capacity to support their economic 
development efforts. Possible technological infrastructure investments 
may include: broadband deployment, infrastructure for distance learning 
networks, smart-rooms, technologically advanced research and 
manufacturing facilities, and business and industrial parks pre-wired 
with fiber optic cable, as well as other types of telecommunications 
infrastructure and development facilities needed to create economic 
opportunity. In the last 5 years, EDA provided approximately $12 
million in 19 grants to support broadband development and deployment in 
communities and regions across the country. EDA also continues to 
encourage communities and regions to think about and include broadband 
assets and needs when undertaking regional economic development 
planning.
    You also asked how you could help us. One of the most important 
ways you can help us is by letting your constituents know that we can 
help them. We are happy to take referrals directly from your office or 
from those of your peers. If you are hearing that a community is 
interested in expanding its access to broadband infrastructure or 
improving its digital inclusion (e.g., workforce development), please 
put them in touch with us at [email protected] or you can 
always contact us through our legislative affairs office. We look 
forward to talking to communities throughout West Virginia to see how 
we can work to help them. As we noted above, our goal for States such 
as West Virginia is to have continued funding to ensure that we can 
help their communities be digitally inclusive and have the broadband 
capacity necessary to participate fully in the digital economy.
    Question. Thank you for hiring a Regional Representative at the EDA 
in West Virginia. I am committed to working with them to emphasize the 
need for increased investment in our State, not by holding conferences 
and meetings, but by investing in facilities and operations that can 
stem innovation and job creation. This Committee provided a $15 million 
investment to assist coal communities. I know that numerous entities in 
the State are currently working on good projects that will improve our 
infrastructure, create jobs, and help our economy diversify. I strongly 
encourage you to fund as many of this projects as possible. Will you 
please work with me to ensure this funding is used for the specific 
intended purposes?
    Answer. EDA is more than happy to keep Senator Capito informed as 
it makes grant awards in this program. EDA is committed to following 
appropriation report language to ensure that grants made under this 
program benefit communities impacted by changes in the power sector and 
coal industry, and their manufacturing or transportation/logistics 
supply chains (the ``coal economy''). This includes both coal mining 
communities and communities using coal power plants.
    Question. Could you provide me a status update on the collaboration 
between NOAA and the FBI regarding the FBI's use of NOAA's 
Environmental Security Computing Center (ESCC) or NOAA's 
``supercomputing center?'' The NOAA supercomputing center could be an 
important resource for the FBI in its efforts to address encryption 
breaking needs as expressed by the Attorney General to this very 
committee.
    Answer. NOAA is currently working with the FBI on an interagency 
agreement allowing the FBI to take ownership of and use NOAA's 
decommissioned supercomputer located at the NESCC in Fairmont, West 
Virginia. NOAA is currently reviewing the interagency agreement and 
hopes to be in a position to have it signed in the late August/early 
September timeframe.
                                 ______
                                 
             Questions Submitted by Senator James Lankford
    Question. The fiscal year 2017 budget requests $1.37 billion in 
grant funding. In February of this year, you announced 25 awardees that 
will receive $10 million under the Economic Development 
Administration's 2015 Regional Innovation Strategies program. How is 
the Regional Innovation Strategies program evaluated for effectiveness?
    Answer. Starting with the fiscal year 2014 funding (awarded in 
fiscal year 2015), Regional Innovation Strategies (RIS) program 
grantees have been required to report on a standardized set of metrics. 
In prior years, each grantee determined which metrics they would 
capture and report, making it challenging to evaluate results and 
program effectiveness. The new standardized metrics, which include both 
outputs and outcomes, and which are specific to each competition under 
the RIS program, are collected and aggregated by EDA's Office of 
Innovation and Entrepreneurship (OIE), which manages the RIS program. 
Additionally, this data will be used to inform a third-party evaluation 
of the RIS program, which is scheduled to begin on or before December 
15, 2017, pursuant to the RIS program's authorizing language. See 15 
U.S.C. Sec. 3722(e).
    Question. Are there other Federal departments and agencies that 
provide grant funding to accelerate innovation and entrepreneurship in 
this country?
    Answer. Yes. For example, the Small Business Administration (SBA) 
provides competitive grants of $50,000 each to accelerators across the 
country through its Growth Accelerator Fund Competition. The RIS 
program funding addresses a broader set of tools than the Growth 
Accelerator Fund Competition, including proof-of-concept and 
commercialization programs, which follow a variety of industry- and 
region-specific models that may--but do not necessarily--include an 
accelerator. In addition, RIS has greater flexibility to address the 
array of gaps specific to regional innovation and entrepreneurship 
ecosystems. For example, the Seed Fund Support Grant competition, part 
of the RIS program, is the only Federal program that funds operational 
costs for the creation or expansion of cluster-focused, early-stage 
seed capital funds--a gap in many nascent and growing ecosystems.
    SBA's Cluster Initiative also provides funding to communities to 
help accelerate innovation and entrepreneurship. Under the RIS program 
and the Cluster Initiative, the latter provides funding for mentoring 
and counseling services, mentor-protege and teaming programming, and 
showcase and pitch events aimed at prospective investors and public-
private sector adopters of new technology. RIS program funding focuses 
squarely on technology commercialization, which may include a small 
subset of these activities but encompasses broader business and 
technical assistance that enables early-stage companies to bring 
products and services to market and ultimately to create jobs and grow 
the economy. The RIS and SBA programs are complimentary, and the OIE 
team works closely with the SBA Clusters team to identify synergistic 
opportunities.
    Question. How do you coordinate with other agencies to prevent 
duplication or overlap?
    Answer. The Office of Innovation and Entrepreneurship (OIE) 
coordinates with other agencies in a number of ways. First, merit 
reviewers from across the Federal Government review RIS program grant 
applications. In 2015, 11 agencies were represented within the pool of 
over 70 merit reviewers including the Department of State, the Small 
Business Administration (SBA), United States Agency on International 
Development, the National Aeronautics and Space Administration, the 
United States Department of Agriculture, and the National Science 
Foundation. Second, OIE staff volunteer as reviewers for other agency 
competitions such as SBA's Growth Accelerator Fund Competition and 
speak frequently at various events in collaboration with other 
agencies, such as at Treasury's State Small Business Credit Initiative 
conference. Thanks to this two-way exchange, OIE has adopted best 
practices from other programs and is making better-informed investments 
that are complimentary to other agency's grants where appropriate. 
Finally, OIE engages multiple agencies such as SBA, Treasury, and 
National Institutes of Health through the National Advisory Council for 
Innovation and Entrepreneurship as a way to provide intergovernmental 
awareness of programs and initiatives and to collaborate and coordinate 
regarding intergovernmental policies.
    Question. In early February, Goran Marby, was named the next 
President and CEO of ICANN. Mr. Marby will succeed current President 
and CEO Fadi Chehade whose term finishes on March 15, 2016, and will 
join ICANN in May 2016. During this time, Akram Atallah, President of 
ICANN's Global Domains Division will serve as acting CEO. Last year, 
you testified before this subcommittee that the Department deals 
``directly with ICANN and the leadership of ICANN.'' Are you still 
meeting with Mr. Chehade and what interaction have you had with Mr. 
Atallah and Mr. Marby?
    Answer. The Department has not had any official meeting with Mr. 
Chehade since his departure from ICANN. However, Assistant Secretary 
Strickling did meet Mr. Chehade socially on one occasion in May 2016. 
As part of routine interactions with ICANN, NTIA staff does meet or 
talk with Mr. Atallah. NTIA staff first met Mr. Marby at the ICANN 
meeting in Marrakech this past March and will have regular interactions 
with him now that he has taken the reins as ICANN's CEO.
    Question. The budget request notes that in fiscal year 2017, NTIA 
will continue representing the United States in ICANN's Government 
Advisory Committee and coordinating U.S. Government policy positions. 
Can you explain in more detail what role NTIA will play with ICANN, as 
well as in developing our Nation's policy positions regarding the 
Internet?
    Answer. NTIA has represented the United States Government in 
ICANN's Governmental Advisory Committee (GAC) since ICANN's first 
public meeting in 1999. The GAC role is to provide advice to the ICANN 
Board on issues of public policy, especially where there may be an 
interaction between ICANN activities or policies and national laws or 
international agreements. There are currently 162 GAC members and 35 
observers, who work on the basis of consensus when developing advice 
for the Board.
    NTIA runs an interagency coordination process with other U.S. 
Government agencies to develop U.S. policy positions on upcoming items 
scheduled for discussion and decision in the GAC. The interagency 
working group meets at least once monthly and includes the 
participation of more than 10 agencies and offices. NTIA also 
coordinates with its international allies to achieve U.S. policy goals.
    In addition, NTIA will continue to participate in the Root Server 
System Advisory Committee (RSSAC) Caucus, which is a group of DNS and 
root server system experts responsible for the essential work of the 
RSSAC.
    Beyond ICANN, NTIA will continue to play an influential role in 
developing U.S. policy positions regarding the Internet. NTIA is an 
active and expert participant in U.S. delegations to multilateral 
organizations, including the International Telecommunication Union 
(ITU), the Asia Pacific Economic Cooperation (APEC), and the 
Organization for Economic Cooperation and Development (OECD), among 
others, and in bilateral exchanges with key countries from across the 
globe. On the domestic front, NTIA develops policies and programs that 
ensure that all Americans have access to broadband services, protect 
online privacy, keep children safe on the Internet, and facilitate 
competition in the telecommunications and information industries.
    Question. The budget notes that the U.S. will participate in 
international training (including funding seminars and webinars) to 
``educate government officials in developing countries about the 
benefits of an open and unfettered Internet.'' Which countries does 
this entail and how much will be spent on training?
    Answer. NTIA participates in annual international training in 
partnership with the United States Telecommunications Training 
Institute (USTTI) in Washington, DC. Later this year, NTIA will conduct 
a week-long training seminar entitled ``International Policymaking in a 
Multistakeholder Environment'' for about two dozen government officials 
from developing countries. The goal of the seminar is to provide a 
hands-on training experience to enable government officials in 
developing countries to implement and practice multi-stakeholder 
governance. NTIA is providing a grant of $135,000 to USTTI to conduct 
the 2016 program. Funds will be used to cover the travel and 
subsistence costs for developing country officials to travel to 
Washington for this week-long seminar.
    NTIA is still in the process of finalizing the list of invitee 
countries for the 2016 program; however, NTIA is focused primarily on 
developing countries as defined by the United Nations Development 
Programme (UNDP). The list of potential invitees for NTIA's training 
includes officials from the following developing countries: Argentina, 
Armenia, Bahrain, Belarus, Botswana, Costa Rica, Cuba, Egypt, Ghana, 
Guyana, India, Jamaica, Kenya, Macedonia, Malawi, Malaysia, Mexico, 
Morocco, Pakistan, Paraguay, Rwanda, Saudi Arabia, Senegal, Serbia, 
Trinidad & Tobago, Tunisia, Turkey, Uganda, United Arab Emirates, 
Uruguay, Vietnam, and Zambia. In developing the invitee list, NTIA is 
also focusing on key developed countries in Europe that remain 
undecided about the merits of multi-stakeholder Internet policymaking. 
These countries include: the Czech Republic, Estonia, Hungary, Poland 
and the Slovak Republic.
    Question. The budget request specifically says ``developing 
countries,'' but what about countries like Russia and China? They are 
not developing countries, but clearly don't believe in an open 
Internet.
    Answer. Please see the answer to the next question.
    Question. What is the policy of the United States on Internet 
engagement with Russia and China?
    Answer. The U.S. Government seeks to constructively engage with 
Russia and China on Internet policy issues with the goal of preserving 
and strengthening the openness, interoperability, reliability, and 
security of the Internet. At the same time, the administration is fully 
aware of potential challenges such engagement can present and is 
vigilant against compromising our principles or responsibilities for 
the sake of such engagement.
    With China in particular, there is great interest within the 
Department and among stakeholders for meaningful engagement on Internet 
issues. This is due in large part to the size of the Chinese market and 
its desirability as an investment target for U.S. firms. Accordingly, 
the Department participates in a number of bilateral exchanges with 
China on Internet policy issues. These include dialogues organized by 
the Department itself and others organized by the U.S. Government 
departments and agencies. Broadly speaking, the bilateral exchanges are 
intended to encourage Internet openness and cross-border data flows, 
strengthen the multi-stakeholder approach to Internet governance, share 
best policy practices, promote trade and reduce market barriers, to 
identify areas of international shared concern. The Department also 
uses these opportunities, as appropriate, to candidly address Chinese 
policies and practices that discriminate against American businesses or 
run counter to the United States' international commitments.
    China and the United States also participate alongside each other 
in the Internet Corporation for Assigned Names and Numbers (ICANN) and 
multilateral organizations that develop or consider Internet policy 
issues, including the International Telecommunication Union (ITU), and 
the Asia Pacific Economic Cooperation (APEC). China wants to be viewed 
as a leader on these issues as evidenced by their pursuit of positions 
in many organizations. While the United States seeks good working 
relationships with China in these bodies, we are often on different 
sides of debates, particularly on the question of the proper role of 
governments in shaping Internet policy in relation with other 
interested stakeholders.
    The Department has curtailed its bilateral interactions with the 
Russian Government as a result of its ongoing violation of Ukraine's 
sovereignty and territorial integrity. The Department does still 
interact with Russia in multilateral settings. Russia is a full member 
of the ITU, the APEC, and ICANN, where they often take similar 
positions to those of China. In addition, Russia can participate in the 
Internet Governance Forum and actively engages in activities on 
cyberspace and Internet matters under U.N. General Assembly bodies 
(CSTD). Historically, we interacted with Russia under the G8 format. 
The G7 meets now in its stead with only the U.K., the United States, 
Canada, Japan, Italy, Germany, and France plus the European Union.
    China is acting as host of the Group of 20 (G20) nations, with a 
variety of meetings throughout 2016, and has sought to prioritize 
digital economy cooperation. Russia is a member. The Department is 
working closely with the National Security Council, the National 
Economic Council, and relevant departments and agencies to ensure our 
engagement with all G20 members is productive and protects and 
preserves Internet freedoms and an open, interoperable, reliable, and 
secure Internet.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
    Question. As a growing number of nuclear power reactors reach the 
end of their operating licenses or chose to close due to economic 
pressures, an increasing number of communities across the country will 
be faced with nuclear power plant closures and the decommissioning of 
nuclear power reactors. These plant closures hold the potential to be 
incredibly disruptive to the economies of their local host communities. 
Since the closure of Vermont Yankee in my home State at the end of 
2014, nuclear plants in Massachusetts and New York have announced that 
they will be closing in the coming years. Because there is no manual, 
no blueprint for these host communities to follow as they work to deal 
with the economic impacts of plant, and given the long term 
implications of storing nuclear waste, I have encouraged our Federal 
agencies to look for ways to help. While the challenges these 
communities face are unique, the expertise of agencies like the 
Economic Development Administration could play an important role in 
helping them move forward.
    The administration and the Department have rightly harnessed the 
Federal Government's resources to help communities with coal based 
economies through the Partnerships for Opportunity and Workforce and 
Economic Revitalization initiative. I believe that EDA should expand 
this initiative to include nuclear host communities. The EDA should 
work with plants and communities that have already been through this 
process to share their lessons learned and help support efforts in 
nuclear communities still in the process of transitioning their 
economies.
    Secretary Pritzker, given the significant social and economic 
impacts a nuclear plant closure has on a community, what resources can 
the Department make available to help transition local economies to new 
opportunities?
    Answer. EDA is committed to helping all communities in economic 
distress, including those impacted by nuclear plant closures. EDA has 
Economic Development Representatives (EDRs) assigned to each State and 
Territory. Those EDRs work directly with the economic development 
districts in communities to help them identify their economic needs and 
grant programs that can address those needs. EDA grant funds can be 
used to provide important support such as designing a transition 
strategy, constructing or upgrading public infrastructure, conducting 
feasibility or environmental studies, supporting construction and 
operations of incubators and business accelerators, capitalizing 
locally or regionally administered Revolving Loan Funds for 
entrepreneurs competing in a growing 21st century business climate.
    Question. Unlike the President's POWER initiative, however, there 
are few resources available to the changing landscape around nuclear 
energy power plants. Would the Department be open to including nuclear 
closures into this initiative and in what else can the Department do to 
expand other efforts to invest Federal economic and workforce 
development resources in communities and regions negatively impacted by 
changes in the nuclear power economy?
    Answer. While the POWER initiative is specifically focused on coal 
related economic needs, it represents a small portion of EDA's grant 
programs. The Department is working with other agencies to provide 
continuity of effort for economic resources to address needs of 
communities such as those affected by changes in the nuclear power 
sector. The administration has designated EDA to serve as the U.S. 
Government-wide leader in the integration of multiple Federal economic 
development resources to achieve successful economic development 
outcomes. This role for EDA addresses fragmented Federal economic 
development programs and will identify collaborative practices agencies 
should consider implementing in order to maximize the performance and 
results of Federal programs that share common outcomes.
    Resources dedicated to the President's POWER initiative represents 
7 percent of EDAs annual grant program. The remaining 93 percent is 
available to all economically distressed communities, regardless of 
their classification as a coal community, nuclear power community or 
any other categorization. EDA awards grants based on the merit of each 
application to maximize the benefit of each grant dollar. EDA works 
through its EDRs to help communities experiencing economic distress to 
help them identify their economic needs and government-wide grant 
programs that can address those needs.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
                       salmon biological opinions
    Question. Since the 2009 salmon biological opinion was issued, 
water pumping in California has been strictly regulated to prevent 
endangered fish from being killed by the pumps.
    However, NOAA admits that numerous other factors (not directly 
related to pumping) also negatively impact the salmon, including:

  --Loss of habitat,
  --sediment build-up,
  --predation by non-native species, and
  --drought conditions generally.

    Given all of these other factors, it does not seem right to me that 
the 2009 opinion focuses so heavily on pumping.
    Secretary Pritzker, what proportion of total harm to the fish has 
NOAA attributed to water pumping versus all of the other issues NOAA 
has identified?
    Answer. The analysis included in NOAA's 2009 biological opinion on 
the combined long-term operations of the Central Valley Project (CVP) 
and the State Water Project (SWP) determined that CVP/SWP operations 
are likely to jeopardize the continued existence of winter and spring-
run Chinook salmon, Central Valley steelhead, the southern population 
of North American green sturgeon, and Southern Resident killer whales 
(which depend on Chinook salmon for food). Per regulatory 
interpretation of the jeopardy standard (50 CFR 402.02), this denotes 
that the combined operations of the CVP/SWP were determined to result 
in appreciable reductions in the likelihood of both the survival and 
recovery of these species in the wild.
    It is important to note that these analyses were designed to 
determine whether or not appreciable reductions in survival and 
recovery of the above listed species were reasonably expected to occur 
as a result of the operations of the projects. They were not designed 
to quantify the absolute amount of reduction or the resulting 
population characteristics (absolute abundance, for example) that could 
occur as a result of project implementation.
    More information about the relative impacts of CVP/SWP operations 
on the above listed species can be found in the 2009 opinion (http://
www.
westcoast.fisheries.noaa.gov/publications/Central_Valley/
Water%20Operations/
Operations,%20Criteria%20and%20Plan/nmfs_biological_and_conference_
opinion_on_the_long-term_operations_of_the_cvp_and_swp.pdf).
                   monitoring of salmon in the delta
    Question. I understand that NOAA has conducted several real-time 
monitoring pilot programs to get a better of sense of where exactly 
fish are in the Delta.
    In 2013, NOAA began implanting acoustic tags into endangered 
winter-run Chinook salmon. In 2015, NOAA began testing cheaper radio-
frequency identification (RFID) tags. With these tags, I understand 
that individual salmon can then be monitored in real-time.
    Secretary Pritzker, how much of the salmon population in the Delta 
has NOAA now tagged?
    Answer. NOAA has tagged 300-600 hatchery-produced Sacramento River 
winter-run Chinook salmon with acoustic tags each year since 2013. This 
is a fraction (0.2 percent) of the overall annual hatchery production 
of winter-run Chinook, but tracking this proportion is enough to 
reasonably approximate the overall movement and survival of hatchery-
produced winter-run Chinook in the Sacramento-San Joaquin system.
    At this time, NOAA is not acoustically tagging native, wild-born 
winter-run Chinook in the Sacramento-San Joaquin system, as this 
process is much more complicated due to the variable size of individual 
fish (some too small to hold a tag) and to the intensive cost, time, 
and labor demands associated with catching a large enough volume of 
fish to tag in the wild.
    Question. When does NOAA expect to transition these monitoring 
programs from the pilot stage to large-scale implementation?
    Answer. NOAA is currently evaluating the performance of the latest 
types of tag technology, known as radio-frequency identification (RFID) 
tagging, to assess whether it would be a useful complement to acoustic 
tagging in the Sacramento-San Joaquin system. RFID tags are smaller and 
cheaper, allowing many more and a broader range of fish sizes to be 
tagged. We expect to have results from this evaluation before the end 
of calendar year 2017.
    Question. How will NOAA use these tags to help the Federal 
Government make more informed decisions about water pumping levels?
    Answer. Data from existing tagging programs (as well as traditional 
trawl and seine surveys combined with genetic stock identification) are 
critical to NOAA's ongoing development of forecasting models for 
salmon. The models relate data from tagging studies and models and 
observations of flow, water project operations, and water quality to 
patterns of salmon movement, development, and survival. Models will 
provide the basis for predicting when juvenile salmon will arrive at 
project facilities, and how operations will impact them. NOAA is 
working with other Federal agencies, including the U.S. Bureau of 
Reclamation (Reclamation), to potentially expand the scale of tagging 
programs in the Sacramento-San Joaquin.
          increasing noaa's understanding of salmon migration
    Question. The Fish and Wildlife Service recently began using 
``early warning survey'' sites in their ongoing efforts to increase 
their real-time monitoring of the endangered Delta Smelt. The Service 
will then conduct periodic, sometimes daily, boat trawls at these 
locations to determine whether, in fact, smelt are present.
    Secretary Pritzker, aside from acoustic tags, what efforts has NOAA 
Fisheries undertaken to test whether or not salmon are, in fact, 
present in the Delta during migratory periods?
    Answer. In addition to the tagging work described above, early 
warning surveys for salmon are described in Reasonable and Prudent 
Alternative (RPA) Action IV of the 2009 biological opinion, and include 
rotary screw trapping, trawling, beach seining, and observations of 
salvage at the pumping plants in the south Delta. NMFS coordinates 
early survey monitoring through the Interagency Ecological Program. 
NMFS is a member along with the U.S. Fish and Wildlife Service and 
California Department of Fish and Wildlife.
    Question. Secretary Pritzker, what efforts has NOAA Fisheries 
undertaken to understand the influence of water exports on migration, 
specifically, whether exports above -5,000 cubic feet per second do 
increase the risk of entrainment?
    Answer. Research from the California Department of Water Resources 
(DWR) has demonstrated that loss of older juveniles at the CVP and SWP 
fish collection facilities increases sharply at Old and Middle River 
(OMR) flows of approximately -5,000 cfs; and, that for any given 
increase in OMR flows more negative than -5,000 cfs, loss increases at 
a faster and faster (i.e., exponential) rate.
    Tagging studies by U.S. Fish and Wildlife Service also demonstrate 
that the relationship between entrainment and reverse Old River flows 
is not linear, and that for every unit of more negative river flows, 
you will see a much larger increase in the number of entrained fish. 
(Based on a U.S. Fish and Wildlife Service study (Vogel 2002), 
examining entrainment of juvenile salmonids at the pumping facilities 
at different levels of negative flow in Old River (half of `OMR'), 
which showed that entrainment doubles when Old River flows go from -500 
cfs/-1,000 cfs to -4,000 cfs/-6,000 cfs. Vogel, D.A. 2002. Juvenile 
Chinook salmon radio-telemetry study in the southern Sacramento San 
Joaquin Delta, December 2000--January 2001, Contract report for the 
U.S. Fish and Wildlife Service. Natural Resource Scientists, Inc. June 
2002. 27 p. plus appendices.)
    Because of the non-linear increase in the number of entrained fish 
associated with every unit of more negative river flows, it is critical 
to consider this high rate of increase in mortality when examining 
changes to negative OMR flows from those that are specified in the 2009 
opinion.
                         shasta dam cold water
    Question. As NOAA has acknowledged, there are many reasons for the 
decline of winter-run salmon besides water pumping, such as a lack of 
cold water behind Shasta Dam.
    However, Federal agencies have failed to manage this vital and 
limited cold water pool for 2 straight years. In 2014, the agencies 
failed to accurately estimate how much cold water was available and 
therefore improperly drained all of the cold-water by mid-September. As 
a result, temperatures in the Sacramento River rose to 62 degrees--
fatal for the salmon eggs.
    In 2015, the agencies failed to anticipate that temperatures at 
Shasta would be higher than expected and unnecessarily withheld water 
late into the planting season when it would have been most useful to 
farmers.
    Secretary Pritzker, how is NOAA working with other Federal agencies 
to ensure that the failures of 2014 and 2015 aren't repeated?
    Answer. NMFS, Department of Interior (DOI) U.S. Bureau of 
Reclamation (Reclamation), and California Department of Water Resources 
(DWR) are considering different ways to balance the needs of 
communities and Sacramento winter-run Chinook salmon. We will need to 
be vigilant in our management decisions this year to ensure protection 
of the third year class of winter-run Chinook through early fall.
    On June 28, 2016, NMFS determined that Reclamations' operating plan 
for the Shasta reservoir for 2016 and their commitment to achieve and 
maintain specified temperatures in the Sacramento River are consistent 
with the legal requirements of the Endangered Species Act. The revised 
plan will provide adequate in-river temperatures for young Chinook 
salmon throughout the season. Reclamation's commitment to monitor 
conditions and reduce flows to ensure cold temperatures in the 
reservoir late in the season are vital in this effort.
    In addition, last year, NMFS Southwest Fisheries Science Center 
worked with DOI's Reclamation and academic partners to temporarily 
install and test a distributed temperature sensing (DTS) system in Lake 
Shasta near the dam. DTS uses a laser and fiber optic cable to acquire 
high-resolution temperature data. The DTS was installed as a pilot 
project to serve as an independent and redundant system for measuring 
the thermal profile of the lake. The system performed well in 2015, and 
NMFS is working with Reclamation to identify funding for its permanent 
installation.
    NOAA is also currently developing a system of physical and 
biological models to inform water management in the Shasta Reservoir/
Sacramento River system to improve survival of endangered winter-run 
Chinook salmon and threatened green sturgeon. The models will provide 
information on how temperature and hydrodynamics influence salmon and 
green sturgeon survival. Associated field and laboratory studies are 
needed to generate critical data. In fiscal year 2016, NMFS work will 
include progress on modeling, scientific oversight, and project 
management and administration. In addition, NMFS is planning field and 
lab studies dependent on reimbursable funds provided to NOAA from 
partners, including DOI's Reclamation and California Department of Fish 
and Wildlife. The planned field and lab studies are an expansion of the 
current monitoring efforts in the region that focus on improving the 
science for Shasta Reservoir temperature management.
    Question. Can NOAA prove that the actions it takes to restrict 
water releases from Shasta have actually prevented even higher 
mortality rates?
    Answer. Yes, without the restricted water releases, cold water 
resources would have been depleted sooner and river temperatures would 
have reached higher levels at an earlier date. That situation would 
result in greater than 95 percent mortality and potentially the 
complete loss of two consecutive cohort years of endangered Winter-run 
Chinook salmon. Even small percentage reductions in survival are 
critical for recovering populations.
    Key steps to improving the management of Shasta Reservoir's cold 
water storage and to restore and reintroduce winter-run Chinook to 
their historic habitats are contained in the 2015 Sacramento River 
Winter Run Chinook Salmon Species in the Spotlight Priority Action 
Plan: (http://www.nmfs.noaa.gov/stories/2016/02/docs/
sacramento_winter_run_chinook_salmon_spotlight_species_5_year_action_
plan_final_web.pdf).
                                 ______
                                 
          Questions Submitted by Senator Christopher A. Coons
    Question. How will permanently adjusting the Federal cost share 
requirements for MEP Centers to `one to one' improve the MEP program?
    Answer. Since 1998, the NIST MEP program has prescribed that for 
the first 3 years of a center's cooperative agreement the cost share 
ratio is 50/50 (1:1) Federal to non-Federal decreasing to one-third 
Federal funding the sixth year and beyond. The need to generate $2 of 
non-Federal money for every $1 provided by NIST led centers to focus 
their time and attention on manufacturing firms capable of paying for 
the center's services. In some few instances, the State government 
provided substantial cost matching, allowing some centers to expand 
their reach to a broader market.
    Several recent reports outline the need to examine the impact of 
changing the cost share requirement. In the America COMPETES 
Reauthorization Act of 2010 (Public Law 111-358), Congress directed the 
Comptroller General (GAO) to submit to Congress a report on cost share 
requirements of the MEP program with recommendations to provide for 
long term sustainability of the program. GAO submitted a report in 
April 2011, but did not provide recommendations that would allow the 
Secretary of Commerce to alter the cost share structure. In the House 
Report (H. Rept. 112-169) to accompany the Commerce, Justice, Science, 
and Related Agencies Appropriations Bill, 2012, Congress directed the 
Secretary of Commerce to draft criteria for establishing specific cost 
share for the MEP program. In addition, at the June 2013 National 
Advisory Board Meeting, the NIST Director presented the following 
charge: ``the Board is requested to immediately initiate a review of 
the cost share structure'' and provide recommendations by September 30, 
2013. The MEP National Advisory Board successfully completed this 
charge and transmitted a report to the NIST Director on October 18, 
2013. The Advisory Board found ``that changing the cost share 
requirement would have numerous beneficial impacts, including: (a) 
serving more companies, (b) making cost share available for other 
program investments, (c) focusing on delivering services to 
manufacturers that are affordable, (d) decreasing the amount of time 
seeking less valuable cost share, (e) better serving the needs of 
regional stakeholders, (f) relieving administrative burden, and (g) 
promoting innovation, technology transfer and acceleration.''
    During 2014, both the House and Senate drafted legislation that 
included language about the permanent readjustment of cost share to a 
1:1 ratio. On July 22, 2014 the House of Representatives passed H.R. 
5035--NIST Reauthorization Act of 2014 and on July 31, 2014 the Senate 
introduced S. 2757--America COMPETES Reauthorization Act of 2014 both 
of these included, among other items the permanent readjustment of MEP 
cost share to 1:1. The House also passed on May 20, 2015, H.R. 1806--
America COMPETES Reauthorization Act of 2015 that again included the 
cost share adjustment.
    In the interim, NIST MEP began a multi-year system wide competition 
of the MEP Center network to refresh the system, something that had not 
been done on a broad scale in the program's history. A major objective 
of the competitions was to increase Federal funding in States that have 
historically been underfunded, while at the same time, re-setting the 
program's priorities to focus on a broader market that included more 
rural, very small and start-up manufacturers. This was accomplished by 
reallocating headquarters funding to the local Centers. One consequence 
of the re-compete is that the cost share ratio has been re-set to 1:1 
for those centers that were selected through the competition. Note, 
however, that this is a temporary re-set and those centers cost share 
will rise beginning in year 4 until it reaches 2:1 again in year 6.
    Beginning on August 1, 2014, NIST MEP conducted an initial 
competition in 10 States (Colorado, Connecticut, Indiana, Michigan, 
North Carolina, New Hampshire, Oregon, Tennessee, Texas, and Virginia) 
and the awards were announced in February 2015. On March 9, 2015, a 
second round of competitions across 12 States (Alaska, Idaho, Illinois, 
Minnesota, New Jersey, New York, Ohio, Oklahoma, Utah, Washington, 
Wisconsin, and West Virginia) was launched and the awards were 
announced in November 2015 [1]. As a result, 20 States were 
successfully competed in the first two rounds.
    NIST MEP has undertaken an examination of the experiences of these 
20 centers to determine what changes occurred as a direct result of the 
new awards. As a result of the competitions, almost $14 million in new 
Federal funding was allocated to these 20 centers. Most importantly, 
the competition leveraged more non-Federal dollars compared to the 
increase in Federal investment. The increase in cash cost share from 
both State investment and client revenues increased significantly and 
to a greater extent than in-kind cost share. Cash cost share match to 
Federal funding, including both state contributions and client fees, 
increased by over $22 million and in-kind contributions (or non-cash 
match) rose by just over $2 million. In addition to the changes in cost 
share, a majority of the 10 centers from round 1 reported that they had 
increased their focus on very small and rural manufacturers, brought in 
new resources and partners aimed at workforce development, increased 
their focus on helping manufacturing companies grow (rather than just 
increase operational efficiencies) and increased their technology 
acceleration activities and partnerships with the Institutes of the 
National Network for Manufacturing Innovation.
    No awards were made in Ohio and Utah in the second round.
    Question. What can be done to help MEP Centers improve their 
engagement with small and rural manufacturers?
    Answer. MEP's increased focus on very small and rural manufacturers 
is of recent origin, having begun with the first round of center re-
competition awards initiated on July 1, 2015. Since that time, NIST MEP 
has held several sessions with the centers at our quarterly update 
meeting to share approaches and lessons learned on engaging and working 
with very small, rural and start-up manufacturers. The result of those 
sessions is that centers that have worked with more very small, rural 
and start-up manufacturers have shared what works and does not with 
those which are new to that focus. NIST MEP is also developing a 
performance-based Federal funding opportunity document, to be published 
in October 2016, which will allow centers to apply for funds to carry 
out pilot projects related to engagement of very small, rural and 
start-up manufacturers. The results of those pilots will be shared 
across the system to accelerate the growth and improvement in 
performance of those manufacturers.
                                 ______
                                 
              Questions Submitted by Senator Tammy Baldwin
    Question. My frustrations with trade enforcement can be illustrated 
by the experience of a paper company in my State--Appvion. Appvion has 
requested reviews of foreign companies suspected of circumventing trade 
laws to import lightweight thermal paper, yet the Commerce Department 
has no ability to compel these companies cooperate with their 
investigation. Importers continue to bring product into the U.S. 
marketplace without paying the appropriate duties by trans-shipping or 
mis-labeling product.
    In 2012, President Obama signed an Executive order to establish the 
Interagency Trade Enforcement Center (ITEC) to enhance enforcement of 
U.S. trade laws. And while the ENFORCE Act provisions in the recently 
passed customs legislation contains many worthwhile provisions to 
improve trade enforcement, we still lack the ability to compel foreign 
companies to comply.
    My question for you, Madame Secretary, is what recourse exists for 
a company like Appvion in situations like this? Can you explain what is 
needed from Congress to provide Commerce with the ability to go after 
these bad actors and provide a level playing field for Wisconsin 
manufacturers?
    Answer. The International Trade Administration's Enforcement & 
Compliance Division at the Department of Commerce has primary 
responsibility to administer the antidumping duty and countervailing 
duty (AD/CVD) laws, which are designed to counter unfair trade 
practices that injure U.S. industries in our domestic market. We 
conduct AD and CVD investigations and subsequent administrative reviews 
to determine whether imported merchandise is dumped (that is, sold in 
the United States at less than fair or normal value) or subsidized by 
foreign governments. If, as a result of our investigation, we find that 
imports have been dumped or unfairly subsidized, and if the 
International Trade Commission finds that a domestic industry has been 
injured as a result of the unfairly-traded imports, we issue an 
antidumping duty or countervailing duty order. When that happens, we 
instruct U.S. Customs and Border Protection (CBP) to require importers 
to pay cash deposits whenever they import merchandise subject to the 
orders. Thereafter, on an annual basis, we will conduct an 
administrative review of the entries from the past year to determine 
the actual level of dumping or subsidization during the prior 1 year 
period.
    During the course of our proceedings, particularly our 
administrative reviews, Commerce is sometimes provided information that 
indicates possible evasion of the AD/CVD laws and duties owed pursuant 
to particular orders. In these situations we provide that information 
to, and work in close cooperation with, CBP, Immigration and Customs 
Enforcement (ICE) and the Department of Justice (Justice) to assist 
their efforts in enforcing the customs laws and ensuring our border 
measures are effective. Upon examination of the information provided, 
Department of Homeland Security components may find the information 
sufficient to initiate an investigation which may result in the 
imposition of civil or criminal penalties and fines on parties involved 
in the evasion scheme.
    Commerce's role in detecting and deterring the circumvention of 
antidumping and countervailing duties is addressed in Section 781 of 
the Tariff Act of 1930 (the Act). Commerce may conduct circumvention 
inquiries when it is alleged that minor alterations are being made to 
subject merchandise in order to evade AD/CVD orders. Commerce may also 
conduct circumvention inquiries when it is alleged that merchandise 
subject to an order is completed or assembled in the United States or 
other foreign countries from parts and components imported from the 
country subject to the order. Finally, Commerce can find that later-
developed merchandise may also be covered by an existing order.
    In an example of circumvention, Commerce encountered a circumstance 
whereby parties were importing Polyetheylene Retail Carrier Bags 
(essentially plastic shopping bags) that had undergone all of the 
production steps except the last step, which was to stamp out an 
opening and create handles for the bags. Because the language of the AD 
order specified that the bags covered by the order have handles, 
parties attempted to circumvent the order by merely performing this 
last step in the United States after the unfinished merchandise cleared 
Customs. Alerted to this scheme again by CBP port officials (though, 
just as often, members of domestic industry such as Appvion will alert 
Commerce to instances of possible circumvention), Commerce used the 
information to initiate a circumvention inquiry and, ultimately, to 
find the product to be covered by the order.
    With regard to your specific question about cooperation of 
respondent companies, when respondent firms refuse to participate or 
cooperate in an antidumping (AD) or countervailing duty (CVD) 
proceeding, the statute authorizes Commerce to determine dumping 
margins and subsidy rates based on adverse inferences. The dumping 
margins and subsidy rates calculated using adverse inferences are 
likely higher than they would have been had the firm in question 
participated in the proceeding. As such, Commerce's application of 
adverse inferences is designed to encourage participation and 
cooperation in future proceedings. Other than the application of 
adverse facts available, however, Commerce lacks the ability to 
directly compel foreign firms to participate in AD and CVD proceedings. 
For example, unlike the International Trade Commission, Commerce does 
not have subpoena power to compel cooperation.
    The Trade Facilitation and Trade Enforcement Act of 2015/Customs 
Cooperation on Duty Evasion and the American Trade Enforcement 
Effectiveness Act of 2015 (ATEEA) provides CBP with additional tools to 
ensure compliance with customs and trade remedy laws. For example, 
under the ATEEA, CBP shall establish targeted risk assessment 
methodologies and standards that are geared toward evaluating the risk 
of cargo destined to the United States that may be violating U.S. 
customs and trade remedy laws. Further, in developing these targeting 
methodologies, CBP may rely on internal data from its National 
Targeting Center, publicly available data, and data submitted to CBP by 
private parties. Based on this risk assessment, CBP may issue Trade 
Alerts in which the National Targeting Center directs CBP staff at U.S. 
ports to subject targeted cargo to further scrutiny in order to ensure 
compliance with customs and trade remedy laws. Further, under the 
ATEEA, CBP will establish Importer of Record and Importer Risk 
Assessment Programs that will improve CBP's ability to vet and track 
the operations of entities that serve as importers of record.
    These provisions of the ATEEA will improve CBP's ability to collect 
dumping and subsidy duties owed by importers of record, particularly 
with regard to new and non-resident importers of record. Additionally, 
the ATEEA increases the level of due diligence that customs brokers 
must perform when vetting the identity and information supplied by 
importers of record. Another aspect of the Act provides CBP the 
authority to issue questionnaires and conduct on-site verifications of 
information submitted to CBP by foreign exporters and producers.
    Commerce will continue to support CBP's enforcement activities as 
CBP takes steps to ensure that the Act's provisions are implemented and 
vigorously enforced.
    The trade remedy laws provide mechanisms for Commerce to 
investigate properly filed allegations that imports are circumventing 
AD or CVD orders that are in place. The statutory mandate for 
investigating customs fraud or evasion of AD and CVD orders falling 
outside the scope and circumvention provisions (e.g., through 
mislabeling or transshipment) resides with CBP. Should evidence of 
fraud or evasion come to light in a Commerce proceeding, Commerce 
passes that information on to CBP for analysis and investigation. Where 
CBP finds such activity, customs law provides for the application of 
penalties to importers that are misclassifying merchandise upon entry 
into the United States or otherwise committing fraud on the United 
States Government.
    Question. Madam Secretary I'd like to talk about the Economic 
Development Administration's Regional Innovation Strategies Program. In 
my view, this program is a great example of what a Federal program 
should be--it brings diverse entities together, it leverages Federal 
and private dollars, and it helps local economies.
    I'm especially pleased with this program because of its impact on 
Wisconsin. Organizations like the Water Council and the Wisconsin 
Technology Council have benefited from the program, and I'm excited 
about our most recent winner of an i6 award--The University of 
Wisconsin at Stevens Point who won a grant to examine how to turn 
vegetable processing byproducts into commercial products. This project 
is especially exciting because it's bringing together many entities, 
like Heartland Farms, Pavelski Legacy Partners, the Wisconsin Potato 
and Vegetable Growers Association, and the Wisconsin Economic 
Development Corporation.
    While I appreciate your support for the program by requesting $20 
million, $5 million above last year's enacted level, this is still $5 
million below last year's request and I would like to receive an 
assurance from you that this program is still as important to your 
Department as it is to my constituents.
    Answer. EDA assures that the Regional Innovation Strategies (RIS) 
program remains an important part of its programs and is integral to 
accomplishing the administration's and Department's strategic 
priorities. Over the past 2 years EDA has taken significant steps to 
build permanent support for these grants by hiring four career Federal 
employees into the Office of Innovation and Entrepreneurship (OIE), 
which oversees these grants. Furthermore, OIE worked with staff from 
EDA's headquarters and its six Regional Offices to streamline the RIS 
program grant operations, further integrating the Regional Office staff 
into this process. Finally, EDA has requested $5 million more in the 
2017 President's budget than was enacted for fiscal year 2016. EDA 
takes great care to reach the best balance among its programs and the 
fiscal year 2017 President's budget request represents that balance.

                          SUBCOMMITTEE RECESS

    Now, the subcommittee will stand in recess until Thursday, 
March 10, at 10:30 a.m. when we take the testimony of NASA 
Administrator Charles Bolden.
    [Whereupon, at 11:57 a.m., Thursday, March 3, the 
subcommittee was recessed, to reconvene at 10:30 a.m., 
Thursday, March 10.]