[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
 BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: FEDERAL AVIATION 
                      ADMINISTRATION AUTHORIZATION

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

                                (115-18)

                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 8, 2017

                               __________

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             Committee on Transportation and Infrastructure
             
             
             
             
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25-728 PDF            WASHINGTON : 2019                                  
                             
                             
                             
                             
                             
             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                             Columbia
FRANK A. LoBIONDO, New Jersey        JERROLD NADLER, New York
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California            ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas  RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas              GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
JEFF DENHAM, California              ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr., 
SCOTT PERRY, Pennsylvania                Georgia
RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia                 DINA TITUS, Nevada
TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut, 
BRIAN BABIN, Texas                       Vice Ranking Member
GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota

                                CONTENTS

                                                                   Page

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

                               WITNESSES

Hon. Elaine L. Chao, Secretary of Transportation, U.S. Department 
  of Transportation:

    Testimony....................................................     4
    Prepared statement...........................................    52
    Responses to questions for the record from the following 
      Representatives:

        Hon. Bill Shuster of Pennsylvania........................    62
        Hon. Mark Sanford of South Carolina......................    62
        Hon. Jeff Denham of California...........................    65

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Hon. Peter A. DeFazio of Oregon..................................    49
Hon. Grace F. Napolitano of California...........................    51

                       SUBMISSIONS FOR THE RECORD

Op-ed of June 5, 2017, ``President Trump's Right. Privatize Air 
  Traffic Control,'' USA Today, submitted by Hon. John J. Duncan, 
  Jr., of Tennessee..............................................    10
Hon. Elaine L. Chao, Secretary of Transportation, U.S. Department 
  of Transportation, post-hearing supplements to remarks 



Letter of June 8, 2017, from Marc Rotenberg, President, 
  Electronic Privacy Information Center, et al., to Hon. Bill 
  Shuster, Chairman, and Hon. Peter A. DeFazio, Ranking Member, 
  House Committee on Transportation and Infrastructure, submitted 
  by Hon. Rick Larsen of Washington..............................    66
  
  
  
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 BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: FEDERAL AVIATION 
                      ADMINISTRATION AUTHORIZATION

                              ----------                              


                         THURSDAY, JUNE 8, 2017

                  House of Representatives,
    Committee on Transportation and Infrastructure,
                                            Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m. in room 
2167, Rayburn House Office Building, Hon. Bill Shuster 
(Chairman of the committee) presiding.
    Mr. Shuster. The committee will come to order and I now 
recognize Mr. LoBiondo for a motion.
    Mr. LoBiondo. Pursuant to rule 1(a)(1) of the rules of the 
Committee on Transportation and Infrastructure, I move that the 
chairman be authorized to declare recess during today's 
hearing.
    Mr. Shuster. The question is on the motion.
    All those in favor, signify by saying aye.
    All those opposed, signify by saying nay.
    In the opinion of the Chair, the ayes have it, and the 
motion is agreed to.
    Well, I want to welcome everybody to today's hearing on FAA 
[Federal Aviation Administration] reauthorization and reform. I 
want to welcome Secretary Chao.
    Thank you very much for being here. This is your first 
hearing before the committee. And I know that you have a hard 
stop today at 11:30 because you have a meeting down at the 
White House. I know that the President has a number of 
stakeholders in continuing--talking about infrastructure to the 
stakeholders and to the American people. So we will do our best 
to abide by that.
    Given those constraints, after consultation with the 
ranking member, we will observe the following timing: opening 
statement by the chairman and ranking member will be 3 minutes; 
questions for the chairman and ranking member will be 5 
minutes. However, I will defer my questions until the end. And 
questions for Members will be 4 minutes, to ensure everyone 
gets a chance to ask questions today.
    We could not be discussing a more important aspect of our 
Nation's infrastructure this morning. A long-term, 
comprehensive FAA authorization and reform bill is critical to 
bringing our infrastructure into the 21st century.
    We have held a number of hearings this year to prepare for 
an FAA bill, and getting your input about the administration's 
priorities is another critical step in that process.
    On Monday some of my colleagues and I joined you as the 
President announced his support and principles for air traffic 
control reform. As you know, this reform is vital to the future 
of our aviation system. But our FAA bill will address many 
much-needed reforms of the agency.
    We need certification reform, so that our manufacturers can 
compete on the world stage. We need to ensure we don't stymie 
innovation in new and emerging aviation sectors like drones and 
commercial space travel. We need to improve our airport 
infrastructure across the country. We need to ensure the safety 
of the system and the fair treatment of the flying public.
    Without bold action, America will, without a doubt, fall 
behind other nations in aviation. It is time for this committee 
and for Congress to act, and I look forward to working with you 
as we do that.
    I would now like to recognize subcommittee chairman Mr. 
Larsen for 3 minutes to make an opening statement.
    Mr. Larsen. Ranking Member.
    Mr. Shuster. Ranking Member Larsen; sorry about that. Three 
minutes? For an opening. I am confusing myself.
    Mr. Larsen. First--thank you, Mr. Chairman. First off, I 
regret Mr. DeFazio is unable to attend today with a very 
important hearing with Secretary Chao. He is in Oregon, 
undergoing an urgent medical procedure. I fully expect him to 
be back to work and on the road to recovery next week. So I 
just want to pass that on.
    And, Mr. Chairman, thank you for calling this hearing 
today.
    To Secretary Chao, we welcome you to the committee for your 
first hearing--at least first hearing with us.
    Yesterday Ranking Member DeFazio and I were joined by every 
Democratic member of this committee in introducing H.R. 2800, 
the Aviation Funding Stability Act, which offers simple and 
narrowly tailored solutions to the challenges facing the air 
traffic control system. The bill provides a steady funding 
stream for aviation programs, improves FAA's procurement and 
personnel systems, and amplifies the aviation stakeholder's 
voice in FAA management through the Management Advisory 
Council.
    Our bill fixes every problem identified by aviation system 
stakeholders, and does not engage in the science experiment of 
air traffic control privatization, which will slow down, rather 
than speed up, NextGen implementation. If we are going to 
have--if we have a discussion about air traffic control, we 
cannot deny the progress the FAA has made, and the motivation 
that this committee's oversight itself has provided.
    The FAA has rolled out DataComm in 56 of the busiest 
control towers, nationwide, and plans to deploy to en route 
facilities in 2021. Electronic flight strips, a symbol of all 
that is supposedly wrong with the current system, come online 
in 2020, as part of a larger suite of automation. And the FAA 
has published over 8,000 performance-based navigation 
procedures. The FAA has completed a network of automatic 
dependent surveillance-broadcast towers that will replace radar 
in 2020, and the list goes on.
    And a privatization bill will not come with a magic wand to 
accelerate these efforts. But the plan will not only freeze 
modernization programs in place, but also jeopardize enacting a 
long-term, comprehensive FAA reauthorization bill that the 
industry and flying public rightly demand.
    Yesterday, in a Senate Commerce, Science, and 
Transportation Committee hearing on privatization, Republican 
Senator Jerry Moran said that ``With the administration's 
support for this proposal, the odds of getting a long-term 
authorization are diminished,'' adding, ``Those two things, the 
spinoff and the long-term authorization, may be mutually 
exclusive.''
    In his closing remarks, Chairman Thune encouraged you, 
Secretary Chao, to find consensus among stakeholder communities 
because right now there are a whole lot of questions. An ever-
growing list of stakeholders have registered objections.
    And, Mr. Chairman, I just ask unanimous consent that the 
following items be entered today in the record, including 
public releases of aviation stakeholders and labor groups 
expressing concern about privatization.
    Mr. Shuster. Without objection, so ordered.

    [The letter from the Electronic Privacy Information Center is on 
pages 66-70.]

    Mr. Larsen. As well as the statement by Ranking Member 
DeFazio.
    Mr. Shuster. Without objection, so ordered.

    [The written statement of Hon. Peter A. DeFazio is on pages 49-50.]

    Mr. Larsen. Federal unions, including PASS [Professional 
Aviation Safety Specialists], which represent FAA safety 
inspectors and technicians, also objected to privatization, as 
well as 100 mayors.
    Secretary Chao, you stated during your confirmation that 
you wanted a national consensus on air traffic control 
privatization. This plan has not attracted consensus in 20 
years. There does not seem to be consensus. And we want to hear 
from you how you plan to go about doing that.
    So, with that, I want to thank you, Mr. Chairman, for 
holding today's hearing, and look forward to hearing from the 
witnesses.
    Mr. Shuster. I thank the gentleman. And now I recognize the 
chairman of the subcommittee, Mr. LoBiondo, for a statement.
    Mr. LoBiondo. Thank you, Mr. Chairman. I think we have a 
tremendous challenge, but a tremendous opportunity with the 
reauthorization bill.
    In order to ensure that the United States remains at the 
forefront of aviation innovation, technology, and, most 
importantly safety, it is imperative that we pass a multiyear 
bill. Critical to the FAA's modernization effort is the 
cutting-edge research and development done by the outstanding 
men and women of the Federal Aviation Administration's 
Technical Center located in my district. This is the premier 
aviation research and development center, and I have the honor 
of representing them.
    From pavement testing to lithium battery research, the work 
done at the tech center has developed and validated new 
technologies that have saved lives and makes our aviation 
system the safest in the world.
    Today, the unique labs at the tech center are focused on 
21st-century challenges such as UAS [unmanned aircraft system] 
integration and cybersecurity efforts to protect the NAS 
[National Airspace System]. Our current construction of the 
Stockton Aviation Research and Technology Park, which is 
adjacent to the tech center, will complement those efforts, 
bringing private companies into direct and daily contact with 
the labs and the personnel at the tech center. I want to see 
their hard work better utilized and more efficiently integrated 
into our aviation system. But due to restrictions and decisions 
by FAA headquarters here in Washington, their efforts and 
expertise cannot and have not been fully leveraged.
    We hope to be able to change that. I look forward to the 
hearing today.
    And, Secretary, thank you for being here.
    I yield back.
    Mr. Shuster. I thank the gentleman, but now I would like to 
welcome our witness, Secretary Chao.
    Again, your first time before the committee in this 
capacity.
    But I just want to remind all my colleagues that we have 
somebody here that has got a tremendous amount of experience in 
the transportation world. Not only has her family had a 
maritime shipping business, and still do, she was a 
Commissioner to the Federal Maritime Commission and also the 
Chair of that Commission, but also Deputy Secretary of 
Transportation under the first Bush administration and then 
Secretary of Labor under the second Bush administration. So we 
have someone here who is well versed on the issues, and well 
versed in Washington and its ways.
    But again, it is great to have you here today to testify.
    I ask unanimous consent that Secretary Chao's full 
statement be included in the record.
    Without objection, so ordered.
    Since your written testimony has been made part of the 
record, we would ask you to keep it down to 5 minutes. And, 
with that, Secretary Chao, please proceed.

TESTIMONY OF HON. ELAINE L. CHAO, SECRETARY OF TRANSPORTATION, 
               U.S. DEPARTMENT OF TRANSPORTATION

    Secretary Chao. Thank you very much, Chairman Shuster, 
Ranking Member DeFazio, who is not here today, and all the 
members of the committee.
    Our air traffic control system is currently the best in the 
world. But it is under tremendous performance pressures that 
cry out for action. Despite spending billions of taxpayers' 
dollars over the past several decades, the Government has not 
been able to implement the state-of-the-art air traffic control 
technology that is needed.
    Air traffic controllers, as mentioned, still use paper 
strips and 1960 technology. Congestion and delays cost more 
than $25 billion annually in higher fuel costs and lost 
productivity, not to mention degradation of our quality of 
life.
    By 2020, air passenger traffic will soar to over 1 billion 
annually. Air freight is expected to more than double over the 
next three decades. Drones and unmanned aircraft systems will 
have to be integrated into the national airspace. Without 
change, the current air traffic control system will be unable 
to keep up.
    So this administration has proposed to liberate the air 
traffic control operations and move it to a nonprofit, 
nongovernmental independent cooperative. The safety regulatory 
oversight function will remain at FAA. This will also solve a 
longstanding conflict of interest problem of an operating 
entity, the air traffic control system regulating its own 
safety.
    More than 50 countries worldwide currently have this 
structure. The proposed new air traffic control structure will 
ensure the deployment of state-of-the-art air traffic control 
technology that will manage the national airspace with more 
precision, thereby enhancing safety.
    Number two, it will protect our national security. It will 
maintain access for all users of the airspace, especially those 
in rural communities, general aviation, and the military. The 
new structure will also ensure financial self-sufficiency 
through retention of all user fees and access to the public 
markets.
    The new organization will be governed by a professional 
board of 13 directors nominated by all stakeholders, such as 
general aviation, airlines, airports, the general public, for 
example. No one stakeholder group will constitute a majority. 
The board will not be dominated by the airlines, as they will 
only have 2 out of the 13 seats.
    Currently, there is over $5 billion in the Aviation Trust 
Fund, which is not permitted to be spent. Under the new 
proposal, 100 percent of the surplus revenues would be 
reinvested back into the organization.
    Despite the fact that Congress allowed the FAA to adopt its 
own procurement rules in 2001, the system has been unable to 
deliver new air traffic control technology in a timely and 
cost-effective manner. And mindful that the key to any 
organization's success is its employees, the administration 
proposes that the new air traffic operations entity honor 
existing labor agreements.
    During the proposed 3-year transition, there will be no 
operational disruptions, as this proposed structure advocates a 
new governance and financing structure, not the physical 
movement of people nor equipment.
    We look forward to working with you, Mr. Chairman, the 
committee, and all stakeholders on these proposed reforms, 
because I know that we all want to ensure that the United 
States remains the world's leader in aviation, an industry that 
we pioneered.
    Thank you very much, again.
    Mr. Shuster. Again, thank you, Secretary Chao. And again, I 
am going to--because of the time constraints, again, we are 
going to go to the subcommittee chair and the ranking member 
for 5 minutes of questions. Everybody else will have 4 minutes. 
I am going to hold my questions until the end.
    So, with that, I recognize the subcommittee chair, Mr. 
LoBiondo, for 5 minutes.
    Mr. LoBiondo. Thank you, Mr. Chairman.
    Madam Secretary, can you explain how the research and 
development work at the technical center has helped to make our 
aviation system the safest in the world?
    Secretary Chao. You have given a wonderful introduction and 
description of what the center does, and I look forward, 
actually, to visiting it myself on August 4th.
    Mr. LoBiondo. OK. Well, we will be able to fill you in with 
a lot more.
    I think, as you are aware, cybersecurity is an important 
issue for this committee. And I am assuming you are fully 
supportive of the efforts of the FAA Technical Center with 
cybersecurity and the advances they are making.
    Secretary Chao. Cybersecurity is very important, yes.
    Mr. LoBiondo. And the tech center employees are playing a 
key role in the safe integration of unmanned aircraft systems, 
both through their work at the tech center and through the test 
range that is there. Do you see us continuing to play a role in 
how the unmanned aircraft system will be integrated?
    The tech center--you may have been briefed on this--is 
taking the data from all six national test sites for the 
integration of unmanned aerial systems, and we would like to 
try to make sure that this will be a priority as we move 
forward for this integration.
    Secretary Chao. Drones and unmanned aircraft will be a part 
of the airspace in the future, which is why the administration 
is making this proposal. And certainly the center is very 
important in crafting the future of aviation.
    Mr. LoBiondo. Thank you.
    I yield back, Mr. Chairman.
    Mr. Shuster. I thank the gentleman.
    Madam Secretary, could you pull that microphone a little 
closer to you?
    Secretary Chao. Yes.
    Mr. Shuster. I think the whole thing moves.
    Secretary Chao. Better?
    Mr. Shuster. The whole box moves forward, if you--yes. 
There you go, thank you.
    Secretary Chao. Thank you.
    Mr. Shuster. And with that I recognize Mr. Larsen for 5 
minutes.
    Mr. Larsen. Thank you, Mr. Chairman.
    Secretary Chao, thanks for being here. I think this is the 
most exciting hearing of the day on Capitol Hill, by the way, 
so I just----
    [Laughter.]
    Mr. Larsen [continuing]. For the record.
    Mr. Shuster. You can tell by all the cameras here.
    Mr. Larsen. That is right, all the attention.
    So, as you are probably aware, you know, last year we had 
broad, bipartisan agreement on about 80 to 90 percent of the 
FAA reauthorization bill, and it got hung up on the debate we 
are having today on this issue. We are here a year later, 
nothing much has changed.
    So I wanted to get your view on how the Department sees the 
future. Are you willing to support another extension if we 
can't get a whole bill done?
    Or, as I hope, you know, we have got certification reform 
nearly done, we have got UAS integration of the airspace nearly 
done. There are other issues that are really that close to 
getting done, and we can move on with a more complete bill 
while this issue that we don't have consensus on is set aside. 
Has the administration thought through how to approach that 
yet?
    Secretary Chao. Obviously, we would prefer that this very 
important initiative of the liberation of the air traffic 
control be considered and successfully passed. But as we have 
always said in the past, we want to work with the committee and 
the Congress. So let's work on the issues, and see how far we 
get.
    Mr. Larsen. I just think on--you know, we are looking for 
victories on infrastructure. This is one where everybody could 
claim a victory if we can get past this, this hangup. But thank 
you for that, as well.
    So in the proposal, the administration is--as I understand 
it, plans to transfer all air traffic control assets to this 
not-for-profit, nongovernmental corporation free of charge. Is 
that--do I have--read that right, in the principles?
    Secretary Chao. Well, the American flying public has 
already paid for the use of the system. So to make them pay 
twice doesn't seem very fair.
    Mr. Larsen. So including the real property of the air 
traffic control system capital input, is it your position, 
then, the assets are worth zero dollars?
    Secretary Chao. They are not worth zero, of course, but 
that has to be worked out.
    Mr. Larsen. Well, if they are not worth zero, then it 
doesn't seem that we should transfer them free of charge to the 
corporations----
    Secretary Chao. Well, I think the air traffic control 
system has to--if it were to be moved to a separate entity, it 
has to be capitalized properly. And we want to make sure that 
it is sustainable.
    Currently, there is $5 billion in the Aviation Trust Fund--
--
    Mr. Larsen. Right.
    Secretary Chao [continuing]. Which has not been 
appropriated.
    Mr. Larsen. Right.
    Secretary Chao. So all of these details, again, we are 
willing to work on all these details, and look forward to 
talking further with the Congress----
    Mr. Larsen. But--and this is an imperfect analogy, but if I 
bought a house and I paid off my mortgage, if I want to--if 
someone wants it, they just don't get it because I have 
already--if I am a symbol of the U.S. taxpayer--I have already 
paid for it. They don't just get it. So I should get money for 
that.
    So I just--I don't understand. Perhaps you can get back to 
us on this a little bit better, on how the administration sees 
the fact that the U.S. taxpayer has put money into the system, 
and then that should just be transferred to a not-for-profit, 
nongovernmental corporation, as you say. That makes no sense at 
all. You can say it makes sense, but I look forward to the 
complete analysis of that, from your perspective.
    Secretary Chao. There is already an Aviation Trust Fund 
which is not being used right now----
    Mr. Larsen. Yes, I understand all that. That is not the 
point.
    Secretary Chao [continuing]. Different purposes.
    Mr. Larsen. I am talking about the capital assets.
    Secretary Chao. Yes, I think the capital----
    Mr. Larsen. I am talking about the assets in the system.
    Secretary Chao. The capitalization of this new entity needs 
to be paid attention to. And again, we are open to discussing 
that----
    Mr. Larsen. But if it is a not-for-profit and 
nongovernmental, why--the U.S. taxpayers shouldn't----
    Secretary Chao. Well----
    Mr. Larsen. Sorry, the U.S. taxpayer, in my view, shouldn't 
be paying that not-for-profit, nongovernmental corporation to 
capitalize it. They should be paying to capitalize it. Or it 
should be----
    Secretary Chao. Capitalizing it can come from different 
aspects of what is already there. So that is part of the 
delicate task of making the separation, which does require 
great care and deliberation, and we are very much aware of 
that.
    Mr. Larsen. Great. So I understand on NextGen, as well--you 
and I perhaps have a different view, or maybe we are seeing it 
from different perspectives on this.
    Yes, NextGen implementation hasn't been solid. It--to be--
that is being nice about it. It has been fits and starts. But 
it is occurring. I have outlined some of the implementation 
that has occurred.
    And, in fact, the Joint Planning and Development Office in 
2007 estimated that not only would NextGen infrastructure cost 
for the Federal Government range from $15 to $22 billion in 
2025, but the aviation industry would range $14 to $20 billion. 
And today, where the cost investment has occurred, that is 
about where the numbers are going to be. So there is, one, 
envisioning that it would take that long, as--and so--that is 
not today, it is later. And the cost estimates are about where 
we estimated them back in 2007.
    So I will close there, and I am sorry for taking a little 
more time, Mr. Chairman. But I just think that there is another 
story to be told about NextGen implementation.
    Mr. Shuster. I----
    Secretary Chao. Do I get--this committee has held numerous 
oversight hearings on this particular issue. And the IG 
[inspector general] has written several reports on this. So we 
are trying to respond to the issues that the Congress has 
raised, the issues that GAO [U.S. Government Accountability 
Office] and the IG has raised, as well.
    This is not a slam at all against the FAA. They are trying 
very, very hard. But the pace of--the accelerated pace of 
technological change is such that something has to be done. 
Thank you.
    Mr. Shuster. Thank you, Madam Secretary. I now recognize 
Mr. Duncan for 4 minutes of questions.
    Mr. Duncan. Thank you very much, Mr. Chairman.
    Madam Secretary, between 1995 and 2001 I chaired the 
Aviation Subcommittee for 6 years. And at the request of then-
Speaker Gingrich, the first hearings we held, we held 3 days of 
hearings on the proposal by President Clinton to create an air 
traffic control corporation. At that time, almost every group 
was opposed to it. Now, almost every group, stakeholder group, 
seems to be supporting your proposal, except we still hear 
concerns from general aviation. And we all support general 
aviation. Would you discuss their concerns?
    And secondly, I read one of the reports about your hearing 
in front of the Senate yesterday, and the story I read said you 
received an icy reception. Would you tell us what was the main 
concern or concerns of the Senate, now that you have had 24 
hours to think about it, and how you--anything you might want 
to add, or how you would respond to those concerns raised in 
the hearing yesterday?
    Secretary Chao. We understand the concerns of the general 
aviation community. We need to talk to them more. They are 
concerned about access, that they will somehow be disadvantaged 
in a system that would be dominated by big airliners, legacy 
airliners. We will work with them. We will continue to work 
with them to assuage their fears and concerns.
    General aviation doesn't consist of just mom and pop small 
aircrafts. It also includes corporate aircrafts. So I think 
that distinction needs to be understood. They are concerned 
about user fees and access.
    And if you take a look at Canada, which has moved their air 
traffic system into a separate entity, the user fees have 
actually decreased by more than 45 percent, if you adjust it 
for inflation.
    So we want to ensure that we are reaching--we want to work 
with general aviation, assuage their concerns. I have met 
personally with both of their associations, and the White House 
has, as well, as well as members of our team here. We will 
continue to do so. But the fears, I think, are unfounded, and 
that is what we are trying to say.
    We also want to partner with them to address some of the 
issues. I understand that the chairman has been talking with 
some of the members of the committee who are representing 
general aviation concerns, and we hope that--and we understand 
that some adjustments will be made. But the new entity will 
have a new board of about 13 people. General aviation will be 
represented on that board. Airlines will only have 2 out of the 
13 seats.
    Mr. Duncan. Anything you wish to add about points raised at 
the Senate yesterday?
    Secretary Chao. This is a big move. I can understand 
concerns. And so we pledge to continue to have outreach, as 
does the White House, on this issue. We are going--we are 
proceeding carefully, deliberatively. It is a big step. But we 
feel that, after 30 years of debate, that I think our country 
is ready.
    I was Deputy Secretary of Transportation in 1989. Coming 
back to the Department of Transportation in 2017, I hear the 
same arguments and the same concerns expressed about the air 
traffic control system and the level of technology. So while 
progress is made, it is not fast enough in an accelerated 
environment where change is occurring so rapidly.
    Mr. Duncan. Well, my time is up, but I notice the air 
traffic controllers are in favor.
    And I would like to ask, Mr. Chairman, unanimous consent to 
introduce to the record at this point the USA Today editorial 
endorsing this proposal.
    Mr. Shuster. I thank the gentleman, yes. Without objection, 
so ordered.

    [The USA Today op-ed follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    
    Mr. Shuster. Ms. Norton is recognized for 4 minutes for 
questions.
    Ms. Norton. Thank you, Mr. Chairman, and thank you, 
Secretary Chao, for coming this morning.
    I would like to pursue your response that the assets have 
already been paid for. It is not uncommon to separate 
controllers from safety regulators. In fact, 21 nations have 
done that. We know who they are: Canada and the United Kingdom. 
But only two have privatized. Both Canada and the United 
Kingdom, both of those Governments were compensated. Why 
shouldn't the Government of the United States be similarly 
compensated for these taxpayer assets?
    Secretary Chao. I think your question--I am a bit confused 
by your question. We are removing--we are liberating the air 
traffic control system--which, as mentioned, the air traffic 
controllers themselves are in support of--from the safety 
aspect, so that the safety aspect remains with FAA.
    But to your question about----
    Ms. Norton. Payment to the taxpayers.
    Secretary Chao. Yes, the capitalization. I agree that the 
capitalization of this new entity needs to be addressed.
    Ms. Norton. So the taxpayers may indeed need compensation, 
as they have gotten in every other country that has privatized. 
Is that an area that is under study?
    Secretary Chao. We have always said that the capitalization 
of this new entity----
    Ms. Norton. Well, I ask that that be studied, and that you 
look----
    Secretary Chao. Yes, of course, I will do so----
    Ms. Norton [continuing]. Forward with an answer to the 
taxpayers of why they shouldn't be compensated the way the 
Canadians and the British were.
    Let me ask you a question about constitutionality. Those 
who wrote this bill already seem to know that its 
constitutionality is in doubt, because Congress has limited 
authority to transfer or delegate its functions to any but a 
public entity like an administrative process. So they have 
assumed this kind of workaround that--so that you have to come 
back to the Secretary. Private corporation has to come back to 
the Secretary to get the final answer on important decisions.
    Now, doesn't this undercut whatever efficiencies that the 
bill may seek through privatization that, because of 
constitutional issues, you have still got to come back to the 
Secretary----
    Secretary Chao. I don't think you do----
    Ms. Norton [continuing]. And then there can be litigation 
in the district court and the court of appeals. Where are the 
efficiencies?
    Secretary Chao. I don't think that is the case. I will get 
the answer for you, but I do not believe that is the case.
    Ms. Norton. I ask that you have your counsel look 
specifically----
    Secretary Chao. I will do so.
    Ms. Norton [continuing]. At the question of the 
constitutionality of this provision.
    Secretary Chao. I will do so.
    Ms. Norton. Thank you very much, Mr. Chairman. I yield 
back.
    Mr. Shuster. With that, I recognize Mr. Barletta for 4 
minutes.
    Mr. Barletta. Thank you, Mr. Chairman.
    And Secretary Chao, thank you for being here today. The 
contract tower program continues to be one of FAA's most 
effective Government-industry partnerships to enhance air 
traffic safety at many of our Nation's smaller airports. Not 
only do contract towers play a critical role at smaller 
commercial service airports and general aviation and reliever 
airports in major metropolitan areas, but it is also important 
to note that 47 percent of all military operations at civilian 
airports occur at contract tower airports, as well.
    Given the importance of the program to ATC [air traffic 
control] operations at over 250 airports in the country, can 
you please comment on the value of contract towers to air 
traffic safety and efficiency in our Nation's air 
transportation system and the cost effectiveness of the program 
to FAA and to the taxpayers?
    And what is DOT [U.S. Department of Transportation] doing 
to make sure that this program is protected and enhanced for 
participating in interested airports?
    Secretary Chao. I know that contract towers are a very 
important topic to many rural communities. So for people who 
are interested in protecting the contract towers, they should 
really be looking at another way to help ensure the stability 
of the funding. Because whenever the FAA budget is under 
pressure, what happens is that the contract towers get cut. And 
we have seen that with sequestration. There were over 240 
contract towers that were threatened to be cut.
    So, the current proposal actually helps to ensure the 
stability of the funding, number one. And, number two, in the 
future, remote towers may actually be a more widely occurring 
phenomenon.
    And so, I know that in Virginia and in Colorado experiments 
are proceeding with remote towers. And they may hold the 
promise of future ways of having air traffic controllers. I 
don't think that is a satisfactory answer to some in rural 
communities, and that is a ways off in the future, but that is 
another development that is occurring.
    Mr. Barletta. Thank you. As chairman of the subcommittee 
with jurisdiction over emergency management, I am committed to 
ensuring our first responders have the tools that they need to 
save lives and protect property.
    Section 2207 of last year's FAA extension bill required FAA 
to publish guidance for using unmanned aircraft systems in 
response to natural disasters, particularly for utility and 
infrastructure restoration efforts.
    Secretary Chao, what is the status of this guidance? And 
what is the FAA doing to work with the utility industry on 
emergency response preparation?
    Secretary Chao. I think we are very close, and I hope that 
we will get--I think it is going to happen, and we are almost 
there.
    Mr. Barletta. OK, thank you.
    I yield back, Mr. Chairman.
    Mr. Shuster. I thank the gentleman. With that, Mr. Nadler 
is recognized for 4 minutes for questions.
    Mr. Nadler. Thank you.
    Secretary Chao, one of the essential functions of this 
committee is to exercise oversight of the executive branch 
agencies over which we have legislative jurisdiction. It has 
come to our attention that the Trump administration has 
determined that only the chairman of a committee or 
subcommittee of jurisdiction may exercise the oversight 
function of that committee.
    Further, the opinion instructs that an agency should not 
consider an oversight request, even from the ranking member of 
the committee or subcommittee with jurisdiction, as an inquiry 
requiring a response. In other words, the administration will 
only respond to requests from Republicans and not from 
Democrats.
    As Secretary, will you assure us that the Transportation 
Department and modal administrations such as the FAA, FHWA 
[Federal Highway Administration], and so forth, will respond 
substantively and timely to oversight inquiries from the 
Democratic members of this committee?
    Secretary Chao. Number one, I always want to work across 
the aisle. That has always been my history. But number two, in 
the past administration this practice was kept, as well, and it 
is----
    Mr. Nadler. I am not interested in the past administration. 
Will you assure us that you will--that your Department will 
respond----
    Secretary Chao. I will do everything I can----
    Mr. Nadler [continuing]. Substantively and timely to 
oversight requests----
    Secretary Chao [continuing]. But it is up to the White 
House on what they want to do with it.
    Mr. Nadler. Excuse me?
    Secretary Chao. It is--I will do everything I can, but it 
is up to the White House and this administration. I am not in 
charge of that policy.
    Mr. Nadler. Have you received instructions from the White 
House or anyone else to limit responses from the----
    Secretary Chao. Again, as I have mentioned----
    Mr. Nadler [continuing]. Department----
    Secretary Chao [continuing]. This is always the case. It 
has always been the case in past administrations. This is 
nothing new.
    Mr. Nadler. No. No, it has not. I am not talking about the 
legal requirement. It has been the policy to respond to 
majority and minority Members of Congress.
    Have you received instructions not to respond to inquiries 
from Democratic Members?
    Secretary Chao. I have not, personally, no.
    Mr. Nadler. Has your Department received such instructions?
    Secretary Chao. I will find out for you.
    Mr. Nadler. Thank you. I understand--because, obviously, 
such instructions, whatever the legal basis, which I am not 
talking about, would be obnoxious in the extreme, and a 
violation of all the traditions of this country from 1789.
    Secretary Chao. This was----
    Mr. Nadler. I understand.
    Secretary Chao. This was the----
    Mr. Nadler. That is not a question.
    Secretary Chao [continuing]. Case in the previous 
administration.
    Mr. Nadler. I understand that the President's budget 
proposal does not include funds for replacement of the New York 
Terminal Radar Approach Control Facility. As you know, this 
facility is 36 years old. Is the administration content to let 
the facility sit in need of replacement for the 7 years it 
could take to transition to a new air traffic control provider?
    Secretary Chao. Well, I think, given the questions about 
the real estate, I think it is probably prudent to let things 
set for a while until these decisions are made.
    Mr. Nadler. So, in other words, there--we should let that 
sit for another 7 years?
    Secretary Chao. I don't know whether it is going to take 7 
years. The transition period proposed is 3 years.
    Mr. Nadler. OK. Now, can you--if this privatization 
proposal were to go through, whom would my constituents call 
when the private ATC corporation institutes a new flight route 
that exposes them, in their opinion, to undue noise? Who would 
they call----
    Secretary Chao. They would call the FAA. That 
responsibility remains with the FAA, noise, safety, 
environmental protection issues----
    Mr. Nadler. OK.
    Secretary Chao [continuing]. That would all be----
    Mr. Nadler. Thank you.
    Secretary Chao [continuing]. With FAA.
    Mr. Nadler. And finally--because--if the Air Traffic 
Organization is transferred to a private corporation, and the 
remaining critical safety functions of the FAA would be paid 
for by the general fund, and therefore, still be subject to the 
whims of Congress annual appropriations, sequestration, and 
shutdowns, why does ensuring the safety of the flying public 
come second to the efforts to privatize our Nation's air 
traffic control system?
    One of the reasons for that privatization is that those 
functions would not be subject to annual appropriations, 
sequestration, and shutdowns. But safety still would be. So why 
is safety second?
    Secretary Chao. In more than 60 different countries, safety 
and operations of the air traffic controllers are separate. 
Safety is an oversight issue. The way that the air traffic 
control actually runs the system in a safe way is paramount.
    Mr. Nadler. But the safety----
    Secretary Chao. Safety is number one.
    Mr. Nadler. But the safety functions would still be subject 
to the problems that you say we----
    Mr. Shuster. The gentleman's time has expired.
    Secretary Chao. So Congress has to do something about it, 
then.
    Mr. Shuster. The gentleman's time has expired. Look, we got 
to keep on a pretty tight time schedule here. So with that I 
recognize Mr. Gibbs for 4 minutes.
    Mr. Gibbs. Thank you, Chairman.
    Thank you, Secretary, for being here today, and thank you 
for your leadership and your--obviously, your--on short term as 
Secretary of Transportation, your grasp--your ability to grasp 
these issues is evident. You are catching on really quick, and 
know what the challenges are.
    I want to talk a little bit about the--obviously, there is 
a need to adopt this NextGen technology. I see it all the time, 
I find the--if there is a hiccup somewhere in the Northeast, 
you can see what happens with the slowdowns, and all those 
congestion issues.
    We talk about the $5 billion in the Aviation Trust Fund. 
Well, I guess my first primary question is this new entity 
would have the ability to capitalize--actually do bonding where 
we can't really do now. I guess what I want to say is one of my 
pet peeves has been Government seems to live on depreciation. 
You know, to fund something and then years later, decades 
later, when the asset is, you know, falling apart, then they 
come to Congress and say, ``We got to do this, we got to do 
that,'' and not like the private sector. You know, we don't 
live, you know, on depreciation. We, you know, expense that.
    So, this new entity would--like a private business, where 
they could capitalize and do bonding authority and move this 
NextGen technology, implement it and get it going a lot faster. 
Would you comment on that, how that would function, and how 
that $5 billion in the trust fund would interact with that?
    Secretary Chao. The Aviation Trust Fund has been having 
this surplus, and that obviously means that it took in more 
than it gave out. So we are basically funding this Aviation 
Trust Fund for nonaviation purposes.
    What is very important is that the new entity would be able 
to access the financial markets on their own. And with that, 
they will be able to fund their own operations. And with user 
fees, combination user fees, and go into the markets, they will 
be able to manage their own financial needs and reinvest, most 
importantly, 100 percent of the monies that they have raised. 
Even though they are nonprofit, you still have surplus 
revenues, sometimes, or deficits. But the surplus revenues 
would be reinvested 100 percent into keeping the system, 
improving--you know, improving the system.
    Mr. Gibbs. And to be able to adopt this new technology, 
should be really more----
    Secretary Chao. Yes, and keep--maintain a pace with 
technology.
    Mr. Gibbs. And maintain it. Now, the question that has been 
raised from my colleagues on the other side about paying for 
the--you know, transferring assets, is the--really, the 
question--some of the assets we are talking about are really 
outdated assets. Like you said, it has already been paid for, 
since we are using this 1950s technology.
    But then the other issue, the real estate part of that 
asset, so--would maybe one of the issues to maybe address that 
would be, like, a 100-year lease? Not just turn over all the 
real estate to the new entity?
    Secretary Chao. We are open to discussing all of these 
different ideas, and I should have brought that up, yes. 
Because we understand that there is disagreement about this. So 
we hope to work with the Congress on that.
    Mr. Gibbs. I would just say it might be more palatable to 
the American public, not just say we are not turning it over--
you know, it would be like saying we are going to turn over the 
national parks to a private entity and--you know it is kind of 
the same thing.
    But I think the issue about being able to capitalize and 
have a private entity, run this more like a business, we could 
adopt this technology in a really efficient, quick manner. And, 
like you said, we have been talking about this for 30 years, 
and we just haven't been able to do it. And part of the reason 
is because--I think it is the constraints, the way Government 
runs, has to run. And I think you agree that the constraints 
are part of the problem here.
    Secretary Chao. That is why I use the word ``liberate.'' We 
have to liberate the air traffic control system.
    Mr. Gibbs. My time has run out, but thank you for being 
here, and thank you for your leadership.
    I yield back, Mr. Chairman.
    Mr. Shuster. I thank the gentleman. I now recognize Ms. 
Johnson for 4 minutes for questions.
    Ms. Johnson of Texas. Thank you very much, and welcome, 
Madam Secretary.
    I am never opposed to progress, and know that technologies 
change. And perhaps we hold the responsibility for not keeping 
up. But in reviewing what we are considering, it does interrupt 
the safest aviation system in the world. And it might not be as 
up to par as the technology of which we are considering, but it 
has served us well. And, from what I understand, we are going 
to let this go without compensation. And then who has the 
liability?
    Secretary Chao. The liabilities will be part of the whole 
capital structure, which is why the capital structure is open 
for discussion. But this entity needs to be capitalized 
properly.
    And on the issue of safety, we have the safest system in 
the world. But right now it is not a precise system. So the air 
traffic controllers have to space the planes out with a larger 
distance between the planes to provide for the extra element of 
safety, because the system is outdated. And when that airplane 
approaches the ground on landing, it has to go on a staircase 
path, rather than a slide--a glidepath, a smooth glidepath.
    These are two examples of the technological changes that 
are so desperately needed. The system is safe. We want to 
maintain its safety. We want to enhance its safety.
    Ms. Johnson of Texas. What do you think that most of the 
concerned suspicion and lack of confidence might be that 
general aviation--because our system is more than twice the 
size of the systems that have been privatized in the world. In 
Texas alone we have 2,000 airports. That is more than the 
entire country of Canada.
    In my area of north Texas, we have an airport for 
practically every little municipality. They are very concerned 
that the little airports won't be included.
    Now, even though our technology might be outdated, it is 
working. And I know we have to plan for the future. But is it--
would it be cheaper for us to do this, than to give it away to 
a private corporation?
    Secretary Chao. We have spent so many billions and billions 
of dollars already over the last----
    Ms. Johnson of Texas. Are they going to spend the same 
amount of billions?
    Secretary Chao. I hope not. That is what we have got to 
put--we have to find some other solution. The system is 
working----
    Ms. Johnson of Texas. How many billions are they going to 
pay us----
    Secretary Chao. It is a safe system, but we need to enhance 
it.
    Ms. Johnson of Texas [continuing]. For what we have?
    Secretary Chao. Sorry?
    Ms. Johnson of Texas. How many billions will they pay us 
for what we have in place?
    Secretary Chao. As I mentioned, the capitalization needs to 
be discussed. But right now we have--I am not criticizing FAA. 
I do not want to criticize them. Everyone is trying their best. 
But this system is under tremendous performance pressures, and 
we are concerned about rural America, as well.
    So we have said that we want to work with general aviation. 
And other Members who have rural communities, we are concerned 
about that, too. We do not want to cut off access.
    Ms. Johnson of Texas. How much time will it be to convert 
this to another system if we are under such crisis now?
    Secretary Chao. We have a transition--the proposed 
transition period is 3 years. And if it is not enough, then the 
administration's bill, which will be coming out, will 
probably--will have appeal to either the--currently it is the 
President for extension of this--of the transition period.
    But the transition period should not be disrupted. There is 
no physical movement. It is just a change in the governance and 
the financing structure to allow the organization to go out and 
access the public markets, for example. But there is no--so 
from day--one day to the next, in terms of transition, when it 
finally occurs, there is--there should be no disruptions.
    Ms. Johnson of Texas. My time has----
    Mr. Shuster. I thank the gentlelady. Mr. Webster is 
recognized for 4 minutes.
    Mr. Webster. Thank you, Mr. Chairman.
    Thank you, Secretary, for being here today. I am from the 
central Florida area. We depend on people coming to the central 
Florida area for part--our biggest asset is our tourism 
industry. And I would suspect that most people in this room 
have come to our airport in a higher number than any other 
airport in the world. Just in this room. And so, we need to 
move people. It helps us.
    And so, I am--what I would ask is--we have a beautiful 
airport, Orlando International Airport. And there it is 
controlled by a board called an authority. Nothing that you are 
proposing would do anything to degradate anything that the 
Orlando International Airport Authority is doing now. Is that 
true?
    Secretary Chao. It--that is true.
    Mr. Webster. And they would lose none of the control that 
they have over their own airport and the facilities there at 
all with this privatization/not-for-profit. Is that correct?
    Secretary Chao. That is correct.
    Mr. Webster. And the one thing I would ask, we are--there 
is going to be a third terminal--and I know you have friends 
there in the Orlando area, we have mutual friends there. In 
that particular area there is going to be a third terminal, 
which would expand us to about 33 percent more capacity.
    And in your opinion, if we change direction, if we get a 
grasp on the new technology, if we implement that technology, 
wouldn't it be much more advantageous for the airport that most 
people go to--wouldn't it be more advantageous to be able to 
get there in a swifter manner by using the technology that 
would be proposed, and a swiftness of getting that all 
implemented? Don't you think that would be better for our 
tourism industry than sticking with the old system?
    Secretary Chao. It certainly would.
    Mr. Webster. Those are my only questions. I yield back, Mr. 
Chairman.
    Mr. Shuster. I thank the gentleman, and with that recognize 
Mr. Lipinski for 4 minutes.
    Mr. Lipinski. Thank you, Mr. Chairman.
    I want to thank--Secretary Chao, I want to thank you for 
your service. I want to follow up on something that Mr. Nadler 
had asked about. Noise issues are--around airports are big 
issues for many of us. For me, in the Chicago area, it 
certainly is.
    In response to Mr. Nadler, you said if our constituents had 
an issue with noise around airports, that they could still go 
to the FAA. But the President's statement on principles on ATC 
reform said the FAA's role would be limited to only safety 
considerations, and that NEPA [National Environmental Policy 
Act] would not apply unless any changes exceed the FAA-
established noise threshold.
    So, if that is the case, how can we be assured that the 
input of our constituents and of their representatives here 
will be given serious consideration in planning these--the 
routes in and out of airports?
    Secretary Chao. I don't see a contradiction with what the 
President's principle says. The FAA handles the noise. And if 
there are considerations of the noise, it would have to be in--
--
    Mr. Lipinski. But----
    Secretary Chao [continuing]. Alignment with FAA.
    Mr. Lipinski. But he said the FAA's role would be limited 
to only safety considerations. Only safety, not to nuisance, 
but only safety, unless----
    Secretary Chao. Maybe we should clarify that. But it is 
obviously--it is noise. It is NEPA.
    Mr. Lipinski. And it said NEPA would not apply, unless----
    Secretary Chao. NEPA would not apply to the new entity. But 
it would--I am--I have to say that carefully, because I don't 
want to say it is totally not applicable. But it would not be--
there is a certain way of--I am not saying it very well.
    Mr. Lipinski. Does the--will the FAA be able to tell this 
new entity to change the routes?
    Secretary Chao. Because they are still in charge of the 
regulatory aspects of it, so that would be a consultative, 
communitywide effort that would include the FAA, for example--
--
    Mr. Lipinski. That is certainly not what seems to be 
suggested in what the President said. So we really have to look 
at the details and see how the FAA would still have that 
authority.
    Very--one quick question on the air traffic control. After 
Canada privatized its air traffic control system, NAV CANADA 
changed employees' retirement plans from defined benefit to a 
much less generous defined contribution plan. Under the Trump 
privatization plan, can the board change the retirement plans 
of existing or new employees?
    Secretary Chao. No, the administration's proposal would 
have--would preserve and honor all the existing labor 
agreements.
    Mr. Lipinski. But moving forward, can that--can things be 
changed? And for new employees, could it be changed, then, 
presumably?
    Secretary Chao. They would have the right to, obviously, 
consult and negotiate with the new management.
    Mr. Lipinski. I would----
    Secretary Chao. Air traffic control has signed on. They are 
actually in favor of it.
    Mr. Lipinski. I understand. One last question here. Another 
subject that I think is very important.
    The FASTLANE Grant Program was created in the FAST Act 
[Fixing America's Surface Transportation Act], critical to 
certainly my district, my region, the Chicago region, and it is 
designed to provide investment in the regional and national 
significance projects, exactly what the President has talked 
about where Federal funding should be targeted.
    In the Chicago area, the Chicago Region Environmental and 
Transportation Efficiency Program, or CREATE, is a public-
private partnership, including the railroads, that will improve 
the efficiency of the national freight movement. Again, this 
seems to fit exactly with what the President is talking about 
where Federal investment should go.
    Now, in November of 2016, the Illinois Department of 
Transportation and others put in applications for FASTLANE 
Grants. None of those were--there was no money that was given 
out there. Does DOT plan to issue all of the fiscal year 2017 
authorized amounts?
    Secretary Chao. Yes, we do. We were--we have just gotten, 
obviously, into office, and we were reviewing those FASTLANE 
Grants.
    Mr. Shuster. The gentleman's time has expired.
    Secretary Chao. Yes----
    Mr. Shuster. The gentleman's time has expired.
    Mr. Lipinski. Thank you.
    Mr. Shuster. With that, I recognize Mr. Massie.
    Mr. Massie. Thank you, Mr. Chairman, and thank you, 
Secretary Chao, for coming to testify today in our hearing. 
These are exciting times for congressmen who have chosen to be 
on the Transportation and Infrastructure Committee to have a 
President who makes this an initiative.
    I want to talk about the ATC corporatization. The 
President's plan is remarkable in that it is very similar to 
the House plan that was in our committee last Congress. But it 
has also got some improvements, I think. And I want to ask you 
about one of those, which is the composition of the board.
    And I believe that our plan did not have airports 
represented on the board, but the President's plan does. And I 
just want to see if that is the intention--if that is, in fact, 
the intention, and is that something the President supports, to 
have airports represented on the board?
    Secretary Chao. We want to have all stakeholders on the 
board. So we have included airports, general aviation, members 
of the public, a 13-member board.
    Mr. Massie. That is wonderful. I think that is an 
improvement, and I think that is a necessary condition for 
moving this proposal forward, is to make sure that all the 
stakeholders--general aviation, particularly, and airports--are 
represented.
    I want to commend the President for looking for ways, 
creative ways, to finance infrastructure improvements. And 
particularly with the ATC corporatization using user fees and 
providing for more local control and control of the users of 
the facility. I want to talk briefly, though, about an 
initiative that the ranking member and I have proposed, which 
is to extend to airports the same flexibility and local control 
that we are talking about with air traffic control, so that the 
airports can be more responsive.
    There are billions of dollars of delayed infrastructure 
improvements at airports. And rather than have them rely on the 
Federal Government for more grants, which would require us to 
raise more taxes, our proposal is to allow the airports to 
raise their passenger facility charge. In fact, just to get rid 
of the cap. Right now they are capped, their user fee.
    Can you comment on that? And right now the cap is at $4.50. 
Can you comment on whether the President or yourself might 
support something like that?
    Secretary Chao. That is a very interesting proposal, and I 
am sorry that I was not totally briefed on this before I came. 
But I will certainly be very willing to take a look.
    Mr. Massie. OK. Thank you very much. We think that--this is 
a bipartisan proposal, by the way, and we think that it would 
enable billions of dollars of investment in airports locally, 
without requiring the Federal ``mother may I,'' you know, 
coming to the Government, hat in hand, the airports, and asking 
for the money.
    And it would also allow them to prioritize which projects 
are most important to them. But it would--there would also be 
constraints on the money that they raise from the passenger 
facility charge, which, by the way, is a true user fee. The 
money would not come to the Federal Government and be 
reallocated. It wouldn't even go to a State government to be 
reallocated. It would be used directly, and there would be 
constraints on it, so that they can't build an amusement park 
at the airport, they have to build legitimate infrastructure 
improvements that would benefit the users.
    So I would just ask that the President and yourself 
consider this proposal. It may be a way to add billions of 
dollars more in infrastructure improvement without raising a 
single penny of taxes. So thank you very much.
    Secretary Chao. Will do so.
    Mr. Massie. Thank you, Madam Secretary.
    I yield back.
    Mr. Shuster. I thank the gentleman. Mr. Garamendi is 
recognized for 4 minutes.
    Mr. Garamendi. Madam Secretary, thank you so very much for 
your testimony, and for being here.
    Two sets of questions, one dealing with the board of 
directors. You mentioned 13. Could you expand on who is on the 
board of directors, and how they are selected?
    Secretary Chao. I will do that. It actually tries to be 
very fair. And I don't have that with me, do you? It basically 
is 13--each of the stakeholder groups will be able to nominate 
a certain, you know, number of people. Like general aviation, 
they will nominate two. Airlines will nominate two. And then it 
comes to the Secretary of Transportation, and she appoints 
some, and then she accepts the nominations of the interest--the 
stakeholder groups with who they recommended.
    Mr. Garamendi. Obviously, we are rather interested in 
that----
    Secretary Chao. Yes, of course.
    Mr. Garamendi [continuing]. Because that is the power 
structure, and I take it at the moment that that is not yet 
defined in a specific proposal.
    Secretary Chao. The initial board is--and I am remiss in 
not being able to specifically mention them, and I will ask my 
staff to give it to me right now--and then that will be--so--
but basically, the principal--thank you.
    It says here the initial board--the board will represent 
stakeholders, so we want the stakeholders to be----
    Mr. Garamendi. Well, we would like to know who the 
stakeholders are.
    Secretary Chao. Oh, OK. It would be the major airlines; 
unions; two of the largest aviation groups, AOPA [Aircraft 
Owners and Pilots Association], NBAA [National Business 
Aviation Association]; two of the largest airport trade groups, 
ACI-NA [Airports Council International-North America] and AAAE 
[American Association of Airport Executives]. And then two 
members will be selected from the airlines list, two members 
from the unions list, one member from the general aviation 
list, one from the airports list. Two would be selected by the 
Secretary of Transportation.
    Mr. Garamendi. So, ultimately, the Secretary of 
Transportation will have the responsibility and the authority 
to select the individual members from a list presented by the--
by those stakeholder groups.
    Secretary Chao. Yes.
    Mr. Garamendi. So the power resides with you.
    Secretary Chao. I can only----
    Mr. Garamendi. And your successor.
    Secretary Chao. Well, whoever the--yes, whoever the 
Secretary of Transportation is would select--this is the 
initial--so I would select out of the nominees that are 
presented to me.
    Mr. Garamendi. I understand.
    Secretary Chao. I can't go out to, like, other people, or 
whatever.
    Mr. Garamendi. Well, we know this game, and we understand 
how that works.
    My second set of questions deal with the issue of the $5 
billion that would be transferred immediately to the new 
organization. Is that correct? That is the Aviation Trust Fund.
    Secretary Chao. That has not yet been decided.
    Mr. Garamendi. I thought in your testimony you said there 
is $5 billion that would be available to the new organization. 
That is the----
    Secretary Chao. No, I am just saying the $5 billion--up to 
now the funds, which is over $5 billion in the Aviation Trust 
Fund, is not used by FAA at this point. So it is like you have 
this huge fund, people pay more into it than you----
    Mr. Garamendi. We understand that.
    Secretary Chao [continuing]. You spend out.
    Mr. Garamendi. But----
    Secretary Chao. So----
    Mr. Garamendi. But what are you proposing to do with that 
money?
    Secretary Chao. Oh----
    Mr. Garamendi. Are you proposing to transfer it----
    Secretary Chao. That again is the capitalization. So we 
want to discuss with Congress on how to deal with that.
    Mr. Garamendi. I am sorry, please--I didn't understand 
that.
    Secretary Chao. This is part of the capitalization of the 
new entity.
    Mr. Garamendi. So that money would be----
    Secretary Chao. So no decision has been made on that.
    Mr. Garamendi. It seems to me a rather important issue. You 
have mentioned capitalization a couple of times. You have also 
mentioned that the organization would have the opportunity to 
go to the private money market----
    Secretary Chao. Yes.
    Mr. Garamendi [continuing]. To borrow money and to do that. 
But is it the intention of this legislation to transfer the $5 
billion--actually, it is $6.7 billion--and the administration, 
in its budget, proposes to increase the fund--that is, the 
unspent portion of the fund--by another $5 billion, so it would 
be like $11.7 billion in that fund----
    Secretary Chao. That is not my understanding----
    Mr. Garamendi. Well, it is in the budget.
    Secretary Chao [continuing]. And I will be more than glad 
to go into it----
    Mr. Garamendi. It is in the President's budget.
    Secretary Chao [continuing]. And take another look.
    Mr. Garamendi. It is in the President's budget.
    Secretary Chao. But we----
    Mr. Garamendi. But my point here is----
    Secretary Chao. We knew this was going to be a tricky 
issue, so we wanted to discuss it with Congress.
    Mr. Garamendi. Well, what I am trying to understand is the 
capitalization of this new organization. In your testimony you 
indicated that it is $5 billion available for capitalization. 
Presumably, that means that money has been transferred to the 
new organization.
    Secretary Chao. No, I just said that that is money that is 
available that is not being tapped by the airlines nor the--by 
the airline, airspace system, by the air traffic control 
system.
    Mr. Shuster. The gentleman's time has expired.
    Mr. Garamendi. Thank you.
    Secretary Chao. Thank you.
    Mr. Shuster. And with that I recognize Chairman Young.
    Mr. Young. Thank you. And thank you, Mr. Chairman. And the 
reason I am getting recognized, I said I would only do 2 
minutes, so keep that in mind.
    Mr. Shuster. Thank you so much----
    Mr. Young. Thank you, Madam Secretary, for being here. You 
know, I am listening with interest, and we appreciate your 
testimony. I have read it.
    And one thing I can say for the rest of my friends here, 
that we have to pass the law before she has to implement it. 
That is something that is very important. How we write the 
law--and I am going to suggest, Mr. Chairman, if we just tweak 
it a little bit--it says that there is no--the Secretary does 
not have the authority to make regulations. If it is wrong, 
bring it back to us, Madam Secretary. I think that is very, 
very important--regulations.
    As you know, in the Senate hearing yesterday, my two 
Senators asked you--and it is something they are--I don't think 
you can answer, it is up to us--it is Essential Air Service. We 
don't have highways, and Essential Air Service is crucially 
important. It is funded by overflights. And I am hoping, with 
the help of the chairman, we have a--something I am 
understanding is--all due respects to my other friends on this 
committee--is 80 percent of my people are served by air.
    Secretary Chao. Yes.
    Mr. Young. None of you are served that way; you have an 
alternative source of transportation.
    So, Madam Secretary, I just encourage you to help us, if 
this bill is to be written correctly, but recognize there are 
some very special interests in this area, and I say special 
because we represent our people. And I am not about to sit down 
and watch a bill that takes away the ability to bring groceries 
into my villages. And that is Essential Air Service.
    So, with that, Mr. Chairman, I will yield back the balance 
of my time, and I did not use 2 minutes.
    Mr. Shuster. I thank the gentleman; I appreciate that 
greatly. With that I recognize Mr. Johnson from Georgia.
    Mr. Johnson of Georgia. Thank you, Mr. Chairman, and thank 
you for being here today. I want to point you to the fact that 
air--that NAV CANADA, which is a nonprofit, privatized air 
traffic control system, paid their CEO $3.2 million in total 
compensation in 2016. Are you aware of that?
    Secretary Chao. I am not aware of that. But it is a private 
entity, it is nongovernmental, it is nonprofit.
    Mr. Johnson of Georgia. And so, the one you are proposing 
today would be private, nonprofit. Would it also pay salaries--
--
    Secretary Chao. That depends on the board. The board is 
represented by all these stakeholders, including those who are 
probably general aviation and some others who are not totally 
on board. So it would be up to them.
    Mr. Johnson of Georgia. Well, you stated also that the 
Canada system, it--let's see. Yes, it--the user fees decreased 
after privatization in Canada. Is that correct?
    Secretary Chao. I have been told that the NAV CANADA user 
fees decreased by more than 40 percent of then the taxes that 
they would have raised under the--that scenario, yes.
    Mr. Johnson of Georgia. And you also stated that 
capitalization--you stated in your testimony today 
capitalization for the air traffic control system in Canada 
capitalizes its functions by borrowing on Wall Street.
    Secretary Chao. This new entity would have the ability to 
access the capital markets, if they so choose.
    Mr. Johnson of Georgia. And this would replace direct 
Federal revenues coming to----
    Secretary Chao. User fees would replace the revenue coming 
from the General Treasury.
    Mr. Johnson of Georgia. But the user fees----
    Secretary Chao. It would be user fees.
    Mr. Johnson of Georgia. User fees have come down, but 
salaries have gone up.
    Secretary Chao. Good management.
    Mr. Johnson of Georgia. It is management.
    Secretary Chao. It is management and it is coming out from 
under the constraints of a Federal Government structure.
    Mr. Johnson of Georgia. Well, so now, in your testimony, 
you are saying that, ``Every day, the dedicated men and women 
of the FAA''--and I am quoting you--``safely and efficiently 
separate and guide thousands of aircraft carrying millions of 
passengers and tons of cargo to destinations around the 
country.'' Now you are not in any way saying that it is their 
fault that the challenges that exist for the FAA right now----
    Secretary Chao. No, I am not. Not at all. What I am saying 
is----
    Mr. Johnson of Georgia. You are not pointing the finger at 
the employees. And it is like----
    Secretary Chao. No, no, no. I am not saying that at all. In 
fact, the air----
    Mr. Johnson of Georgia. It is like--and you have, like, 
45,000 FAA----
    Secretary Chao. Yes.
    Mr. Johnson of Georgia [continuing]. Employees, and you 
got----
    Secretary Chao. Please don't put words in my mouth. I never 
said that.
    Mr. Johnson of Georgia. Well, that is--you----
    Secretary Chao. I have always complimented the FAA and 
their employees.
    Mr. Johnson of Georgia. OK, I am----
    Secretary Chao. Yes.
    Mr. Johnson of Georgia. But you do have about 45,000 FAA 
employees----
    Secretary Chao. I have--there are 44,000--about 45,000--the 
Department has about 55,000 employees.
    Mr. Johnson of Georgia. And about----
    Secretary Chao. The 44,000 are from FAA; 34,000 are from 
the air traffic control; about 14,000 air traffic controllers. 
And the air traffic----
    Mr. Johnson of Georgia. And you----
    Secretary Chao. They are all working very hard.
    Mr. Johnson of Georgia. But you have not polled your other 
FAA employees, other than the air traffic controllers, to 
determine whether or not they support privatization.
    Secretary Chao. The air traffic control union is the one 
that represents the air traffic controllers----
    Mr. Johnson of Georgia. But your other employees have not 
weighed in.
    Secretary Chao [continuing]. And they are very much a part 
of the new plan. So their consent and agreement is very, very 
key.
    Mr. Johnson of Georgia. Well, your other employees are 
stakeholders also, but they have not been polled on that issue, 
correct?
    Secretary Chao. This issue has been talked about for 30 
years.
    Mr. Shuster. The gentleman's time has expired.
    Mr. Johnson of Georgia. All right, thank you.
    Mr. Shuster. With that I recognize Mr. Mitchell for 
questions.
    Mr. Mitchell. Thank you, Mr. Chair. Thank you, Madam 
Secretary, for being here. You know, I find unique, after 35 
years in private business, that when you talk about assets in 
the Federal Government they talk about what they spent, as if 
those assets are still as valuable as they were 50 years ago. 
So let me take the--some of the examples you have had, and ask 
you a question.
    I built a really nice house 50 years ago. It was cool. It 
has got nice appliances. Problem is, I let people come in and 
dump garbage in the back, too, a little bit of oil. And now I 
have a brownfield and the appliances are old. Do you want to 
buy my 50-year-old house for what I paid for it 50 years ago?
    Secretary Chao. I don't think so.
    Mr. Mitchell. Exactly the problem we have. I have seen a 
study that shows that the property on which the FAA facilities 
sit is probably at a $1 billion liability, due to environmental 
and other concerns. Is there an update to that number? Do you 
know if there is any change in that number? Is your staff 
aware?
    Secretary Chao. I don't----
    Mr. Mitchell. That is the number I have seen. If your staff 
have a different number, I am certain the committee would 
appreciate it.
    So, on top of transferring these ``assets,'' we are also at 
a liability. There is not a net value. Do you have an estimate 
of the average age of equipment in these FAA towers and 
centers? What is the range of--the age of this equipment?
    Secretary Chao. I think a general statement could be that 
they are old.
    Mr. Mitchell. I think they certainly are. In fact, I am 
confident, having seen towers, and having some private aircraft 
of my own, I have better instrumentation in my aircraft at hand 
than I have in the towers that are trying to do air traffic 
control, by far. Yet we value them as some version of an asset. 
In fact, from what I can tell, most of it has no scrap value. 
Yet somehow we are talking about transferring an asset.
    I am confused by it, continue to be confused, because 
again, I am from private business, and an asset is only what it 
is worth in the market today, what value it can bring to the 
operation, and not what we paid for it before.
    Quick question for you, especially given your family's 
background in terms of business. Best estimate--we heard in the 
previous hearing that to get NextGen ``hopefully'' in place--I 
do stress the ``hopefully''--it would be $30 billion more in 
about 10 years. Now, do you know of any business, any entity, 
that would invest in $30 billion and ``hope'' to get something 
done? Any----
    Secretary Chao. It is a big amount of money. It is worth 
it, if we can get results.
    Mr. Mitchell. Only if we get results. Only if someone is on 
the hook for those results, right? Otherwise, we just threw 
more money down a rat hole, in my opinion.
    Secretary Chao. We have spent a great deal of money 
already.
    Mr. Mitchell. We have, a huge amount of money. And I think 
that is the rationale why--and I have to say I own private 
aircraft, I fly GA, and I support transitioning to this, 
because we can't continue to invest more money in a system on 
the hope that we will get NextGen.
    We can't invest more money in a system that, when we call 
the tower about storms, they ask us where we want to go because 
we have got better radar for identifying storms than they do in 
the tower, and they say, ``Tell us where you want to go.'' That 
is not the system we all hope to have, going forward. So I will 
support it, and support the chairman.
    And one other point to make before I run out of time. I 
will not support the idea that we just continue doing what we 
are doing, and do this in pieces. We are going to, this 
Congress--I will work with the chairman to make sure that we, 
in fact, do complete transition for air traffic control so we 
can get this done. We can't keep throwing money at it.
    Thank you, Mr. Chair. I will yield back.
    Mr. Shuster. I thank the gentleman. And Mr. Carson is 
recognized for 4 minutes.
    Mr. Carson. Thank you, Chairman.
    And thank you, Madam Secretary. Purdue University and other 
institutions in the great Hoosier State of Indiana have a 
strong tradition of training aviation professionals, including 
air traffic controllers. FAA's changes and hiring procedures 
for these training initiatives have recently made it harder for 
graduates in these programs to be hired. Programs in Indiana 
have expressed deep concerns about FAA's changes. Was that 
FAA's intent?
    And secondly, if not, what is being done to address this 
concern?
    Secretary Chao. I am not very familiar with this issue, so 
let me get an answer for you.
    Mr. Carson. OK. Secondly, I would like to hear your views 
on the addition of physical barricades outside the cockpit 
door. I was proud to join Representative Fitzpatrick in 
reintroducing H.R. 911, the Saracini Aviation Safety Act of 
2017, last month to add a secondary cockpit barrier to all U.S. 
passenger carriers manufactured, going forward.
    Now, I recently met with Ellen Saracini, who is the widow 
of 911 pilot Victor Saracini, and we discussed the continuing 
need for this legislation.
    Other than pointing out the importance of this, how much 
has changed since your tenure as Secretary, and what do you 
think about this secondary barrier? Is it a hindrance? Is it a 
value added? What are your thoughts?
    Secretary Chao. Thank you for bringing that up to my 
attention. I have only been in office 3 months. So I would be 
more than glad to take a look at this issue.
    Mr. Carson. Thank you. I yield back, Mr. Chairman.
    Mr. Shuster. I thank the gentleman. And with that, Mr. 
Sanford is recognized for 4 minutes.
    Mr. Sanford. I thank the chairman. Madam Secretary, it is--
I am back over this way, on your left.
    Secretary Chao. Sorry.
    Mr. Sanford. It is good to see you, how are you? I want to 
follow up, actually, on a comment that you made very briefly 
with Senator Cory Gardner in the FAA reauthorization hearing 
that they held on the Senate side. He asked you about 
supersonic aviation and your reply was you were open to it as 
long as it was quiet.
    And I concur, but I think there is probably a need for a 
little bit of zeroing in on what quiet means. And I would offer 
this humbly, in that I think that there is the possibility of a 
technological revolution, given the way that technology has 
changed on this front. I think it is imperative that the FAA 
really look at ways to foster and build this business.
    Right now there is a prohibition in terms of travel over 
the continental U.S., and yet the technology has changed from 
where it was in the 1950s, 1960s, 1970s, 1980s, such that you 
could actually have a much quieter sound envelope and allow for 
supersonic travel over the continental U.S. That would open up 
a whole range of different pairings--whether it is from Denver 
or Houston or Dallas or Chicago--and travel to places around 
the globe, and real change on that front.
    If you look at what Gulfstream is looking at, if you look 
at what Avion is looking at, if you look at what--I mean a 
variety of different new vendors are coming into the 
marketplace, exploring on this front. You know, you are looking 
at having the transit time to--whether it is South Africa or 
Australia or the Far East, or any place around the globe--that 
would be, again, revolutionary in the way that it might change.
    And so, my simple question to you is right now they could 
basically develop stage 4 sound levels. The new sound levels 
take us to stage 5. And yet we have operating aircraft at stage 
3 levels: the 747, the 777, even the Dreamliner made in my home 
district, back in South Carolina, is at a stage 4 level, the 
Dreamliner. They could be at that level. And I would ask you to 
really vigorously look at ways of opening up a different 
standard for supersonic--because it is not the same plane as 
subsonic--that would be economically reasonable, 
technologically practical, and practical to these new vendors. 
Thoughts on that front?
    Secretary Chao. I know that the FAA is working with NASA 
[National Aeronautics and Space Administration] and ICAO 
[International Civil Aviation Organization] on these new 
standards, and they are doing testing. It is going to take a 
long time. I think it was 2025. Let me see what I can find out 
about this, and whether that can be expedited. I don't know 
what the----
    Mr. Sanford. I mean 2025 just seems like----
    Secretary Chao. It is a long time.
    Mr. Sanford [continuing]. A glacial pace, if we are talking 
about the kind of change that could be open in the marketplace 
if we were moving on a much more expedited basis. And I think 
one of the keys is differentiate subsonic from supersonic on 
this particular front.
    Secretary Chao. You make a very good point. As I mentioned, 
FAA is working on it with NASA, and according to ICAO 
standards.
    And let me have--if you are interested, if your office is 
interested----
    Mr. Sanford. We are.
    Secretary Chao [continuing]. Have someone in the FAA kind 
of keep you up--give you a little briefing, a briefing for me, 
as well----
    Mr. Sanford. I would appreciate it.
    Secretary Chao. And then I will keep you informed on the 
progress.
    Mr. Sanford. Yes, ma'am. Thank you so much.
    And I yield back the balance of my time, Mr. Chairman.
    Mr. Shuster. I thank the gentleman. I now recognize Ms. 
Titus for 4 minutes.
    Ms. Titus. Thank you, Mr. Chairman.
    Madam Secretary, earlier this week the President gave a 
rather bizarre assessment of the FAA. It was a very theatrical 
moment. I was pretty appalled by some of the things he said. 
And you stood right there next to him. And yet what we are 
hearing from you today is a little different. So I would like 
to go back over some of the things----
    Secretary Chao. It is not----
    Ms. Titus [continuing]. And see who we should believe.
    The President said that the system was a total failure, and 
that the leadership overseeing it didn't know what the hell 
they were doing. Now, I find this offensive to the hard-working 
people at the FAA, and to Mr. Huerta, and wonder what Mr. 
Huerta's future is there at the FAA if you think he doesn't 
know what the hell he is doing.
    The President went on to say that our air traffic control 
system is a horrible system that doesn't work. These are all 
quotes. You have said it is safe. What do I say to all those 
travelers who are coming to Las Vegas on airplanes----
    Secretary Chao. We are protecting their safety, and those 
are not my words.
    [Sec. Chao submitted the following post-hearing supplement 
to her remark:]

    Secretary Chao. We are protecting their safety, and I did not say 
that we had a horrible system. I do not believe the President meant to 
imply that either.

    Ms. Titus. Well, so I wonder. Who do I believe? Do I 
believe the President when he says it is a horrible system and 
they don't know what the hell they are doing, or do I believe 
you sitting here telling me, ``Well, the FAA is doing a good 
job''?
    Secretary Chao. I always--I believe that the FAA is doing a 
good job.
    Ms. Titus. So the President is wrong.
    Secretary Chao. They are doing the best that they can under 
very trying circumstances. I commend the performance of the air 
traffic controllers and the men and women of the FAA.
    [Sec. Chao submitted the following post-hearing supplement 
to her remark:]

    Secretary Chao. I believe the President was referring to the 
horrible state of our traffic control infrastructure, not to the men 
and women who are air traffic controllers. They are doing the best that 
they can under very trying circumstances. I commend the performance of 
the air traffic controllers and the men and women of the FAA. They are 
doing an excellent job with very antiquated equipment.

    Ms. Titus. So you think the President doesn't know what he 
is talking about?
    [Laughter.]
    Secretary Chao. You heard the President, you have relayed 
his words.
    [Sec. Chao submitted the following post-hearing supplement 
to her remark:]

    Secretary Chao. You heard the President, you have relayed his 
words. The President knows that American air traffic control technology 
is old and obsolete. He has said we can and should do better.

    Ms. Titus. And they are contrary to you, and you are his 
Secretary.
    Secretary Chao. I have told you what I thought about the 
FAA. I admire the FAA, the hard-working men and women, and also 
the very good job that they are doing. They are trying very 
hard in a very difficult circumstance. And that is why the air 
traffic controllers are open and supportive of a move into a 
nonprofit, separate organization, so they can have more 
freedom.
    Ms. Titus. I am sure Mr. Huerta is glad to know that you 
think he does know what the hell he is doing over there.
    Secretary Chao. Mr. Huerta and I are good friends.
    Ms. Titus. Another, more specific, question I would like to 
ask you about.
    In the FAST Act, I was able to get an amendment to that 
bill that created the National Advisory Committee on Travel and 
Tourism Infrastructure, and that committee was appointed--is to 
advise you, they are to meet periodically. It is to talk about 
how tourism, which contributes $2.3 trillion to our economy, 
can be integrated with infrastructure. Those meetings have now 
been canceled for this year. They have not heard anything from 
your office. Are you going to continue with this?
    Secretary Chao. I just met with the U.S. Travel 
Association. I met with the whole group.
    Ms. Titus. I am talking about----
    Secretary Chao. I just met with them.
    Ms. Titus. I think that is wonderful, but did you talk 
about that commission that was created, or are you going to 
continue that?
    Secretary Chao. I have over 1,000 commissions. I am slowly 
trying to understand what boards and commissions are in the 
Department of Transportation.
    Ms. Titus. That is great, but you canceled the meeting, so 
somebody knows they are there.
    Secretary Chao. Well, there are only myself and, until 
recently, just the Deputy Secretary. So I don't know what 
happened.
    Ms. Titus. Well, will you----
    Secretary Chao. It could have been the career folks who----
    Ms. Titus. Will you commit to us to----
    Secretary Chao. I don't know----
    Ms. Titus [continuing]. At least looking into it and 
perhaps----
    Secretary Chao. I don't know who canceled----
    Ms. Titus [continuing]. Scheduling a meeting of that 
commission, since you don't know anything about it?
    Secretary Chao. I will look into it.
    Ms. Titus. Maybe you could find out something about it.
    Secretary Chao. I just met with the----
    Ms. Titus. No, you met with----
    Secretary Chao [continuing]. U.S. Travel----
    Ms. Titus. No, you didn't meet with the commission, you met 
with--
    Secretary Chao [continuing]. Association and all the major 
players.
    Ms. Titus. No, you didn't meet with the commission. Those 
meetings have been canceled.
    Secretary Chao. I will look into it for you.
    Ms. Titus. Thank you very much.
    Secretary Chao. You are welcome.
    Mr. Shuster. I thank the gentlelady. I now yield to the 
gentleman from California, Mr. Denham, for 4 minutes.
    Mr. Denham. Thank you, Mr. Chairman.
    Madam Secretary, let me start by asking a question a little 
bit differently than it has ever been asked before--at least I 
have heard from this committee. A lot of talk recently about 
climate change. And yet I have heard very little as far as 
aviation and FAA on the reduction in carbon around this bill.
    The estimates I have seen are not only would there be a 
savings for all of our airlines and aircraft of about 15 to 20 
percent in fuel and efficiencies that would be picked up, but 
also the carbon footprint, the amount of emissions that would 
go along with that. So we would anticipate about--the numbers I 
have seen, about a 15-percent reduction in emissions. I wonder 
if you could comment to that piece of it.
    Secretary Chao. That is an issue that I do not know very 
much about. So I will take a look and respond back to you on 
that.
    Mr. Denham. But you would agree that the efficiencies that 
would be created under this bill--we have seen, both on----
    Secretary Chao. Well, the congestion and the delays are 
just eating up extra fuel. When a plane is circling 
unnecessarily, or if a plane is circling for, you know, a 
certain amount of time, it is burning up fuel. And it is not 
helping the environment, and it is very inefficient. And it is 
not great for the passengers, either.
    Mr. Denham. As well, I fly back to California every week, 
and I spend a lot of time sitting on runways, waiting to get 
slotted. That is also a great deal of--we circle around 
airports when we get there, but we also sit on the tarmac for a 
great deal of time with the engines running, waiting to get 
into that pattern, as well.
    Secretary Chao. That is not good for the environment.
    Mr. Denham. No. A benefit of this proposal, with 
efficiencies, also on the airport infrastructure side--what are 
some of the anticipated savings that this proposal, just on 
enhancing the ATC, the airport infrastructure in each of our 
airports across the country? Savings under this bill?
    Secretary Chao. I think the--a liberated air traffic 
control system would be more able to manage its own resources 
and its own operations. And it will not be subjected to the 
constraints and the bureaucratic processes that occur on so 
many fronts with being part of FAA and being part of the 
Government at this point.
    Mr. Denham. Thank you.
    Mr. Chairman, I yield back.
    Mr. Shuster. I thank the gentleman. Now I will recognize 
Ms. Esty for 4 minutes.
    Ms. Esty. Thank you, Mr. Chairman.
    Madam Secretary, the FAA is well into implementation of 
NextGen. Wouldn't it seem inherent, given that this new private 
entity would have to coordinate with the remains of FAA, that 
that process of separation, when we are well into this, would, 
in and of itself, cause some delays? I mean you are talking 
about liberating----
    Secretary Chao. I do not believe so, no.
    Ms. Esty. And what basis do you have for believing it 
wouldn't cause----
    Secretary Chao. Because those improvements will continue on 
to the new entity, but the new entity would be freed from all 
the bureaucratic and lengthy processes, procurement processes, 
which still plague the process.
    When you talk about NextGen improvements, they have been 
going on for 30 years. So if we were to say, oh, let's wait and 
let's get this project finished, which is what we have been 
saying for 30 years----
    Ms. Esty. Well, we have the airlines themselves have only 
equipped 20 percent of their flights--of their flight 
equipment. So is the--is that the FAA's fault, or is that the 
airlines? Because the airlines are going to have a bigger seat 
at the table under this proposal. And you would not----
    Secretary Chao. They are not having a larger seat at the--
they have 2 out of 13.
    Ms. Esty. They----
    Secretary Chao. That is not a larger seat.
    Ms. Esty. The public--I have to tell you the public is not 
very convinced right now. If you had been sitting in this 
chamber, in this room----
    Secretary Chao. I understand that very----
    Ms. Esty. And not very long ago, the public is highly 
suspicious of removing and having a separate entity. And I will 
tell you that because I am hearing that at home. I hear no 
clamor at home saying, gee, let's put this in a private, 
separate entity.
    The issues you are addressing are ones of needing to 
streamline, improve procurement, and, frankly, have consistent 
funding. That is a matter of whether Congress functions. And I 
would say, with all due respect, that is a function of the 
majority, which is controlling funding, to do appropriate 
funding. And that is an imperative. That is a political 
imperative.
    So to say we are just going to take it out and form a new 
entity--because we, frankly--and we now have a single party in 
control of all branches--that we can't agree on how to 
appropriately fund the FAA gives me concern.
    I was in California visiting my mother last week who has 
Alzheimer's. I was meeting with folks in Silicon Valley and 
elsewhere who are concerned that this effort to bifurcate FAA 
is going to, on top of things, mean it is likely to get 
underfunding, continue to be underfunded, at the same time that 
we have important initiatives on UAS, on drones, and on 
commercial space flight, in part because the commercial space 
entity is essential for internet connectivity for this country.
    Now, my concern is now we are looking to further undermine 
support for appropriated funding for FAA. So I am curious as to 
how we make this case that there is going to be political 
pressure and commitment by this administration to appropriately 
fund the FAA for these additional new initiatives, while at the 
same time ensuring safety, when, in fact--you know, now we are 
talking about pulling it apart with, as my colleagues have 
already noted, massive assets. They may be aged, but they are 
still massive assets that were funded by the taxpayers.
    Secretary Chao. People may not understand about the--people 
complain all the time. Passengers complain all the time about 
congestions and delays. That is something that people 
understand. This piecemeal effort to streamline, as you 
mentioned, to streamline, to make things better, it is highly 
questionable as to whether it will succeed or not, when the 
entity that is in question still remains under the constraints 
of the Federal Government and all of its rules.
    Mr. Shuster. The gentlelady's time has expired. Mr. Davis 
is recognized.
    Mr. Davis. Thank you, Mr. Chairman.
    Secretary Chao, thanks for joining us today. I look forward 
to working with you on this committee for many years to come. I 
know we are limited on our time today, so I will get right to 
our questions after I commend you for recognizing in this 
debate over air traffic control that the status quo is 
unacceptable. So thank you for recognizing that, thank you for 
your comments today. We really look forward to working with 
you.
    My colleague, Chairman Barletta, mentioned the contract 
tower program. So I have contract towers that operate at two of 
my airports in central Illinois, the Decatur Airport and also 
the Central Illinois Regional Airport. You agreed earlier with 
Chairman Barletta that the contract tower program is working, 
correct?
    Secretary Chao. Yes.
    Mr. Davis. Yes, thank you. Related to that, I have been 
asked questions about how the contract tower airports would be 
impacted by the ATC proposal, ATC reform proposal. And can you 
explain to the committee how this proposal would impact the 
contract tower program?
    Secretary Chao. This is a--the contract towers are always 
the first to be cut back when there are budgetary pressures. 
So, in fact, if there is steady funding, the contract towers 
would be better secure, and they would be more secure.
    Mr. Davis. More secure. And you know what? We saw that 
during the shutdown in my district, when the FAA threatened to 
close the two contract towers that are there.
    So--but under the AIRR Act [Aviation Innovation, Reform, 
and Reauthorization Act], existing contracts under the program 
would transfer to that new entity. And if the board sought to 
close an existing tower, wouldn't they have to come to you, as 
the Secretary of Transportation, to get approval to do so?
    Secretary Chao. Yes, they would.
    Mr. Davis. OK. And would you agree with me that this would 
actually be a better position to be in, rather than what we saw 
with the 2013 Government shutdown and their effect on 
communities like those that are served by contract towers in my 
district?
    Secretary Chao. I would think so.
    Mr. Davis. All right, thank you. I yield back.
    Mr. Shuster. I thank the gentleman. With that, I recognize 
Mrs. Bustos.
    Mrs. Bustos. Thank you, Mr. Chairman, and thank you, 
Secretary Chao, for being here today.
    I really appreciated in your opening statements, when you 
were talking about the airspace, and your quote was that you 
want to protect it, ``especially those in the rural 
communities.'' My congressional district is in central Illinois 
and northwestern Illinois, mostly rural and nonurban.
    And so, what I wanted to ask you, I have heard concerns 
that the administration's proposal will limit the access of our 
small towns and general aviation users currently that they have 
in our air traffic control system, especially because general 
aviation access to airports has significantly decreased in 
privatized systems in other parts of the world.
    So what specific measures are included in your proposal to 
guarantee that these users would get continued open access to 
our National Airspace System?
    Secretary Chao. Well, it can't be any worse than it is now. 
Whenever there is a budgetary concern, the rural areas are 
always the first to get cut. The towers are always the first to 
be eliminated. We have seen that with sequestration, we have 
seen that with other budgetary, you know, periods.
    The intent is we want to preserve access by general 
aviation and by rural America. We understand that is going to 
be difficult, which is why we put that out there and we say we 
want to work with you. How do we make that happen? If you are 
open to ideas that we have, we are very, very--if you are open 
and have ideas, we are very open to talking about that, because 
rural America is important.
    Mrs. Bustos. Thank you. One of the airports in my 
congressional district is called the Chicago Rockford 
International Airport. And it is only 70 miles from O'Hare, 
which is one of the busiest airports in the world, as you know. 
A major economic driver there is actually cargo. It is one of 
the top 20 cargo airports in the Nation.
    So, do you believe a private air traffic control board will 
have an incentive to prioritize flights out of O'Hare in the 
airspace, rather than allow flights from Rockford to take off--
again, 70 miles away? And would communities like Rockford, the 
one that I just described, have any protections in that kind of 
circumstance, under your plan?
    Secretary Chao. The--in broad terms, yes. Specifics, no. So 
that is where we are open to working with Congress on this.
    Mrs. Bustos. OK. Can you drill down on that? I am not sure 
if I----
    Secretary Chao. We would like to preserve it. And if you 
have ideas, we are more than glad to entertain it.
    Mrs. Bustos. OK. And are there any ideas that currently you 
have or the folks----
    Secretary Chao. Well, I think some kind of Essential Air 
Service probably will have to be maintained. But again, you 
know, I can't make a commitment about that at this point, 
because I don't have permission to say that. But rural America, 
overall, is an important aspect. We are thinking about putting 
a separate title or something, but we are, again, open to 
discussion about that.
    Mrs. Bustos. OK. Also in your opening statement you said 
that you would honor existing labor agreements, which, I 
believe you said, are for the next 3 years.
    Secretary Chao. Right.
    Mrs. Bustos. What after that, and your overall attitude 
about labor, organized labor?
    Secretary Chao. Well, I think, if the new organization is 
smart, they are going to have to work collaboratively and make 
sure that a key segment of their population is satisfied.
    Mrs. Bustos. OK. I think I have time for one more question. 
This is a little bit of an aside, but one of the things that we 
consistently hear in my region is that employers in the 
industries like cargo air, the smaller airports, that sort of 
thing, they have good-paying jobs that are available, but can't 
fill them.
    So we have got a couple good examples in my district, where 
the airports or the services have partnered with community 
colleges. Is that something that you would be interested in 
supporting and exploring further to fill that skills gap?
    Secretary Chao. Yes. But can I toss that to the Secretary 
of Labor? Having been the former Secretary of Labor, it belongs 
in that portfolio. But it is an important issue.
    Mrs. Bustos. Sure, I will allow you to do that.
    Secretary Chao. Thank you.
    Mr. Shuster. I thank the gentlelady. And I just want to 
remind Members from rural areas I am from rural Pennsylvania. I 
can assure you that rural areas are going to be attended to. 
And in fact, I believe, with this reform, they are going to 
be--their service will be enhanced significantly over time, 
with new technology.
    So with that I recognize Mr. Smucker from rural 
Pennsylvania.
    Mr. Smucker. Yes. Thank you, Mr. Chairman.
    Thank you, Madam Secretary. This reform, the ATC reform, is 
an infrastructure proposal that, you know, I can certainly 
explain to the constituents that I talk to, so I appreciate 
your leadership on this issue, appreciate the chairman's 
leadership, as well. It is getting Government out of the way to 
make flying more modern, quicker, and with less carbon 
emissions.
    I can also easily explain the benefits to the economy. It 
is helping the U.S. catch up with what our competitors are 
doing across the world.
    What I don't want to do is go home and say that Congress 
stood in the way of an important reform like this. That would 
be a much harder one for me to explain.
    I do have--the two questions I had, essentially, were asked 
by the last two panelists, as--or Members, as well. I have--the 
district that I represent includes parts of three different 
counties, each with their own smaller airport, but very 
important to the commercial operations and to the economy in 
each of those areas. Two of those counties have contract 
towers. So I am as interested--as has just been brought up, 
very, very interested in ensuring that what we are doing here 
does not negatively impact contract towers. And I think you 
have just answered that, and I am satisfied with that answer.
    One of the airports, the Chester County Airport, does not 
have a tower currently, and is in the process of asking for, 
wants to build, a tower there. So I guess, for the--for a 
county, for an airport that wants to build a new tower, do you 
see any--do you think this proposal, compared to what we have 
now, would help them to accomplish that? Or would this provide 
some impediment?
    Secretary Chao. This proposal is basically airspace. So I 
think new--you know, something on the ground would not be 
handled by this.
    Mr. Smucker. Yes, but you had said this proposal would 
potentially help existing contract towers, because they are 
often the first ones to be cut.
    Secretary Chao. Yes.
    Mr. Smucker. So for the establishment of a new one, do you 
think it will have the same impact?
    Secretary Chao. That is a good question. I will have to get 
an answer for you on that.
    Mr. Smucker. Yes. And again, the issue of access to rural 
areas is one that is important in my--each of those counties, 
as well. I think you have answered that. But I just want to 
emphasize, as well, that it is very important for us to ensure 
that that access is available, and look forward to continuing 
to work with you on this proposal. Thank you.
    Secretary Chao. Thank you.
    Mr. Shuster. I thank the gentleman and now recognize Ms. 
Frankel.
    Ms. Frankel. Thank you.
    Thank you, Madam Secretary. It is very nice to have you 
here, and I really appreciate your demeanor, and when you need 
to look for--get more information, you are letting us know 
that. So thank you for that.
    So what I have heard so far today that I think we all agree 
on is that right now we have the world's safest air traffic 
system, that modernization is possible, although it seems to be 
new ideas every day, and we would like the progress to go 
quicker.
    As to the air traffic controllers, I think their biggest 
concern is about Government shutdowns, and they get--basically 
get forced to work without getting paid, which is not fair.
    Now, you have been in--you have been the Secretary of 
Labor, and you have been the Deputy Secretary of 
Transportation. So I am assuming that you believe that 
Government can do good.
    Secretary Chao. I do.
    Ms. Frankel. Right, right. I mean some of the concerns that 
I have heard about this--what I think is creating a new 
bureaucracy, giving away Federal assets to major corporations, 
big airlines that--and listen, being private doesn't make you 
perfect. I mean I don't think dragging a customer off a plane, 
that is not perfect. Having computer failures that mess up air 
traffic all over the country, that is not perfect. I am not 
saying--it is not meant as a criticism. I am just saying just 
because you are a private corporation, that doesn't make you 
perfect.
    Now, Delta put out a study--and I think we know, from 
Canada, that when--that this privatization effort would cause 
the prices of airline tickets to go up. So you know what I 
think? Yes, it--you know why air traffic is going to be safer? 
Because there are going to be less people who are going to fly 
on the planes. Because who is going to be able--you know who is 
going to be able to afford these--going on the planes? The 
people at the Mar-a-Lago. I don't mind, because that is in my 
district.
    [Laughter.]
    Ms. Frankel. But the fact of the matter is--so I want to 
just ask you a serious question here.
    Number one, do you think the Delta study is wrong, that the 
prices of tickets are going to go up? Did the prices of tickets 
go up in Canada?
    And, let's face it, if Congress rejects what I think is not 
a good proposal, can you, once you get all down--do you think 
you have the ability to try to get this straight and do what is 
right, and move it along?
    Secretary Chao. First of all, airlines don't control the 
new air traffic control entity. There seems to be this 
perception. They will not be controlling the new air traffic 
control entity, number one.
    And number two, on Delta, I would go back to Delta and ask 
them again, because it seems as if Delta's position on this is 
changing.
    And number three, you asked me another question, then I 
probably missed one. And number three, whether--you can ask me 
as Secretary of Labor to try to improve the NextGen project. I 
would do my utmost, and I know that people at the FAA are 
trying their best, including the Administrator. But this has 
been going on, as I mentioned, for 30 years.
    Ms. Frankel. But you do know that Congress set, I think, 
2025 as to when this was supposed to go into effect, so of 
course it has been going on years and years. And, according to 
the FAA--we have heard some of their representatives--they 
think it is moving along.
    So, anyway, I wish you the best.
    Secretary Chao. Thank you.
    Mr. Shuster. I thank the gentlelady. I just want to remind 
the gentlelady the IG said that they were concerned that the 
price tag on NextGen could be double or triple the price. So 
Government hasn't been that efficient.
    With that I recognize Mr. Lewis.
    Mr. Lewis. Thank you, Mr. Chairman, and thank you, Madam 
Secretary, for the time today. Very, very important, very 
crucial.
    I want to get to this ``Federal asset giveaway.'' If you 
look at the board, it is a quasi-nonprofit, quasi-independent 
board. There are stakeholders, but there are no shareholders. 
So, any of the ``Federal assets'' we are giving are not going 
to flow back to a private entity for somebody's profit-making. 
It is going back into the air traffic control system. Isn't 
that right?
    Secretary Chao. Yes, it is.
    Mr. Lewis. So how would that be a Federal asset giveaway, 
then? There is no private entity that will benefit directly.
    Secretary Chao. I agree with you. That was--that is an 
excellent question.
    Mr. Lewis. And they are assuming, what, $1.1 billion in 
liabilities? Got old towers or brownfields or something of that 
nature, the new board would have to handle that, correct?
    Secretary Chao. That would be part of the--yes.
    Mr. Lewis. OK. There are about 41 States, I think, that are 
engaged on the topic of unmanned aerial drones, as it were, I 
guess, 38 enacting specific UAS laws now. There seems to be 
this tension between, obviously, stream of commerce, if we 
start delivering packages via unmanned aerial--or UAS, I should 
say. Has the administration looked into how we make certain 
there is--FAA has a say, and some preemption, but also States 
and localities who--with concerns about privacy, as well as 
nuisance law and things like that, have a say, as well?
    Secretary Chao. This is a brave new world. So everything 
you have said is true. We have to consider the safety, the 
security, and also the privacy issues. And I think we, as an 
agency, are grappling with that, in conjunction with other 
stakeholder groups.
    Mr. Lewis. Is there a theme? Are we going to have a plan to 
work with States and localities on this?
    Secretary Chao. We should.
    Mr. Lewis. All right. Thank you very much, Madam Secretary.
    I yield back, Mr. Chairman.
    Mr. Shuster. I thank the gentleman and now recognize Mr. 
Sires.
    Mr. Sires. Thank you, Mr. Chairman.
    Madam Secretary, thank you for being here. I haven't made 
up my mind about this legislation yet. There are a lot of 
things I like about it, especially the dedicated fund that you 
can dedicate this fund to continue to improve the system. And 
no one can raid it, right?
    Secretary Chao. Correct.
    Mr. Sires. Once you have this fund. And I also have spoken 
to many of the members of the union, and I know NATCA [National 
Air Traffic Controllers Association] supports it. And the 
biggest concern that they have is funding. And, quite frankly, 
after seeing the budget that came out of the White House, I 
would be very worried also about funding.
    But my concern is with the rank and file. How can I assure 
the rank and file that their jobs are not going to be impacted 
by this privatization?
    Secretary Chao. Only those jobs that are connected with air 
traffic control will move over with the new entity. Those that 
are involved with safety and other regulations--for example, 
the noise--it will be with FAA.
    Mr. Sires. But----
    Secretary Chao. The split will be difficult.
    Mr. Sires. But do you anticipate any of the air traffic 
controllers losing their jobs as we move into this private, 
nonprofit corporation?
    Secretary Chao. I can't--no, I do not, because they are 
actually hard to hire--it is hard to hire experienced air 
traffic controllers. They are going to need every single one of 
them.
    Mr. Sires. You know, I went to Ottawa, and one of the 
things that I noticed in Ottawa was that they reduced the 
number of air traffic controllers in Ottawa as a result of 
this. Do you anticipate that happening here? And we are much 
bigger, I understand that.
    Secretary Chao. I do not.
    Mr. Sires. You do not?
    Secretary Chao. I do not. But that is obviously a decision 
that has to be made in the future.
    Mr. Sires. And I know that you mentioned in your comments 
that the problem with the delays in airports, that congestion 
and flight delays--how can I say? You are not implying that 
this is because of the air traffic controllers, are you, I 
mean, or the airlines----
    Secretary Chao. Delays are occurring because--there are 
many--and I am not a--there are many, many reasons. Part of it 
is that we don't have updated equipment, so that the spacing 
between airplanes--for example, just one factor--has to be 
further apart than what current, up-to-date technology can 
accommodate, because we are dealing with an older system and we 
want to have safety. If it were a new, modern system, the space 
can be safely kept to a shorter distance. That is just one 
example.
    Mr. Sires. That is one of the things that we saw in Canada.
    Secretary Chao. And then also, as you come down, as you 
land, you don't have to come down a staircase fashion pathway, 
which also takes time. It can be a smooth glidepath right in.
    Mr. Sires. OK. Thank you, Madam Secretary.
    I yield the rest of my time.
    Mr. Shuster. I thank the gentleman. And now I recognize Mr. 
Graves.
    Mr. Graves of Louisiana. Thank you, Mr. Chairman.
    Mr. Shuster. From Louisiana.
    Mr. Graves of Louisiana. Madam Secretary, thank you for 
being here.
    You trying to take my time? The good Graves, you should 
have said that.
    Madam Secretary, thank you again for being here, and I want 
to follow up on Mr. Lewis's line of questioning. Is it your 
intent to take this asset and have this board manage it in a 
way where they financially profit?
    Secretary Chao. No, not at all. One hundred percent of the 
surplus goes back into reinvesting in a system to improve it.
    Mr. Graves of Louisiana. And so, if you are a taxpayer, if 
you are a passenger on an airline, what is your expectation? 
What is your hope or desired outcome of this? What would you 
realize? Would you realize a situation where this asset was 
being managed in a way that would benefit the taxpayer, that 
would benefit the airline passenger? Or do you expect this--or 
do you have a desired outcome for this to work to the detriment 
of that?
    Secretary Chao. Number one, safety is number one. We need 
to address the issues of this current system going forward in 
the future, because the pressures on this system will only 
mount. And we are not doing enough to maintain its supremacy 
into the future.
    Mr. Graves of Louisiana. So I----
    Secretary Chao. The issue about capitalization, I think, as 
I mentioned, we are going to have to--the bill that is from 
this committee currently has a free transfer. And we are open 
to some capitalization of some kind.
    Mr. Graves of Louisiana. And I don't want to put words in 
your mouth, I just want to make sure that I am understanding 
correctly. So this is a public asset today. Do you expect that 
under legislation or the proposal that you have been 
discussing, do you anticipate that in any way the asset would 
be managed that does not put the public's best interests first?
    Secretary Chao. No, not at all.
    Mr. Graves of Louisiana. So is it possible that, under this 
proposal you are actually taking a public asset and 
establishing a scenario whereby it can be maximized or utilized 
in a way that truly benefits safety, considering the trajectory 
of increase in air passenger traffic to where you can increase 
efficiency, reduce emissions, reduce fuel consumption? I mean 
aren't those all objectives of this, using this public asset 
and managing it in a way that truly benefits the public?
    And I want to remind the committee and make sure we include 
back in the record--I have quoted often the ranking member's 
statement that our attempts to--or the FAA's attempts to 
achieve--to accomplish Next Generation, NextGen, he has 
actually called it NeverGen, because of the inability of the 
FAA to fully implement this system.
    Secretary Chao. Everything that you have said is correct, 
and I should have brought it up earlier in my testimony. Thank 
you for reminding me.
    Mr. Graves of Louisiana. Thank you. And with that, Mr. 
Chair, I yield back.
    Mr. Shuster. I thank the gentleman. With that, I recognize 
Mr. Nolan.
    Mr. Nolan. Thank you, Mr. Chairman, and welcome to the 
committee.
    Secretary Chao. Thank you.
    Mr. Nolan. You are going to find a good, strong body of 
bipartisanship on this committee of men and women who want to 
work with you and work with the President and see to it that we 
get our infrastructure back in shape.
    And there is no question, you know, bridges are falling 
down. We have seen it in Minneapolis. Trains are coming off the 
track. We have seen that. And municipal waste treatment 
facilities are overflowing, and we applaud the President's 
desire to spend $1 trillion on infrastructure.
    Having said that, we have seen some reports--you know, 
everybody that has come before this committee--doesn't matter 
whether it is the head of the Chamber of Commerce or the trade 
labor unions--have all said that we need to make this 
investment. Civil engineers say it should be maybe $3.5 
trillion. But they have all said that 90 percent of it is going 
to have to come from the Federal Government, and that 10 
percent of it is, you know, maybe there for private-public 
joint ventures, which are good.
    I hear reports that the President is talking about 90 
percent of it coming from the private sector, and only 10 
percent from the Federal. So I--number one, I would be curious 
to have you respond to that.
    And then, being a bit more parochial, we have witnessed 
where our rural airports and our rural regional airports back 
in Minnesota, airports like Brainerd and Hibbing and Bemidji, 
and what not, are just essential for our business growth and 
job growth and economic opportunity. And then the President has 
submitted a budget calling for cuts and/or elimination in those 
Essential Air Service funds for the smaller regional hubs. So--
and now we are talking about privatization of the whole system.
    Would you respond to those two questions? And how are you 
going to do that? How are you going to protect our small 
regional airports? How are you going to get this job done, 
expecting 90 percent of the money to come from the private 
sector, when everybody that has come before this committee has 
said just the opposite, just flipped it? Thank you.
    Secretary Chao. It is actually not 90 percent. The 
administration has put forward a proposal for $200 billion. 
Also on top of that will be some sale of Government assets, and 
then leverage it up from $200 billion to $1 trillion.
    Mr. Nolan. Excuse me, so that would be 20 percent, as 
opposed to 10 percent.
    Secretary Chao. The 20--I will use your figure. The 20 
percent is--will probably be a incentivized program, kind of 
like seed capital, and it will be given to the State and local 
municipalities. The ones that are able to leverage their funds 
and come in and bring in more innovations and more financing, 
will probably get a larger portion of that.
    So we are----
    Mr. Nolan. Well, we have always had those incentivized 
programs in place, and it has ended up accounting for, like, 10 
percent, not 80 percent.
    Secretary Chao. Actually, the amount of Federal funding for 
highway projects and bridges is actually about 14 percent, 
overall. So the majority of funds have actually come from the 
State and local.
    And in terms of incentivizing, there are States that don't 
allow private sector investments in public infrastructure. And 
so the private sector is actually discriminated against if they 
so wish to invest in public infrastructure. Part of that would 
be to encourage States who don't currently allow public-private 
partnerships to be able to participate.
    Mr. Nolan. Well, I mean, you are right when you--if you 
count State, local, and Federal. Everybody that has come before 
this committee--a lot of experts--said, you know, that is where 
about 90 percent of the money is coming from. And all these 
programs are incentivized programs to get private sector to 
invest. And the best that they have been able to come up with 
is 10 percent.
    I mean you can't just wave a magic wand and call something 
new that has actually been around for a long time and expect it 
to have different results.
    Mr. Shuster. The gentleman's time has expired.
    Secretary Chao. I think we are talking about a lot of 
numbers here which we need to clarify----
    Mr. Shuster. And we are going to have a hearing on 
infrastructure----
    Secretary Chao. OK.
    Mr. Shuster [continuing]. Things at another time. So I 
thank the gentleman and I thank the Madam Secretary.
    Secretary Chao. Thank you.
    Mr. Shuster. With that, Mr. Graves from Missouri is 
recognized.
    Mr. Graves of Missouri. Thank you, Mr. Chairman, and I 
appreciate the Secretary being here and willingness to--
obviously, to testify. And I actually don't have any questions, 
but I do want to point out just for clarification, as much as 
anything else, because there is a lot of misunderstanding out 
there, that this is step 1 in a 10-step process.
    You know, this has got a long way, you know, to go: the 
House of Representatives, Senate, committees, floor, everything 
else that goes along with that. Because there is a lot of 
misunderstanding out there. And for--another reason I just 
wanted to make sure that that was clarified. There are a lot of 
people listening and watching this.
    So thank you, Mr. Chairman. I yield back.
    Mr. Shuster. I thank the gentleman. And with that, Ms. 
Brownley.
    Ms. Brownley. Thank you, Mr. Chairman.
    And thank you, Madam Secretary, for being with us today, 
and your testimony, and your service to our country, both past 
and present. I appreciate it very much.
    I wanted to ask if, based on all of the goals and 
objectives that have been laid out--and I think there is 
generally a lot of agreement in terms of goals and objectives. 
The question becomes how do we get there, what is the mechanism 
to get us there. Do you believe that there is an alternative 
way to get to those goals and objectives, other than 
privatization?
    Secretary Chao. I guess one way is that we continue the 
path that we are on. So, in fact, the proposal that is on the 
table, and one that has been passed by this committee, is one 
of do we stay with the status quo or do we try to prepare the 
system for the future? Because the volume will be quite 
substantial, and the new entrants, like drones, will also have 
to be considered, as to how to integrate them into the system.
    Ms. Brownley. Well, and I agree. I am--I guess the question 
is, is there another alternative, other than the status quo or 
privatization. Is there some other--is there another mechanism, 
in your mind, that we could travel down to get to those 
objectives?
    Secretary Chao. Are you talking about--I don't know what 
you are talking about.
    Ms. Brownley. Well, we have talked----
    Secretary Chao. Sorry.
    Ms. Brownley. Well, you were talking about the status quo 
and then what we are doing today in moving forward.
    Secretary Chao. If you have----
    Ms. Brownley. I mean the President proposed a privatization 
scheme, I think, to get to most of those objectives. I guess my 
question is do you think that there is another way to get to 
those objectives, other than privatization?
    Secretary Chao. I don't know whether that is a leading 
question or not, or whether you have some particular ideas in 
mind as well?
    Ms. Brownley. No, I don't. I just think that there is some 
agreement on basic objectives and goals, and I am just 
wondering if you are open to, you know, to other pathways in 
terms of getting there.
    Secretary Chao. Of course.
    Ms. Brownley. Thank you. Thank you. I represent two general 
aviation airports: one where the FAA staffs the tower and one 
that is a contract tower. As we drill down on all of this, and 
as we get to a detailed proposal, do you intend on having any 
safeguards for general aviation airports, other than the 
decisionmaking that may come from this governing board? 
Safeguards such as, you know, not closing GA towers, contract 
towers, making sure that general aviation airports have the 
resources they need for their ongoing capital improvements?
    Secretary Chao. This proposal talks about a national 
airspace and the air traffic control system, and that is--so it 
is up in the air. It is not--and the issue of assets, which has 
been discussed here, is another issue.
    Ms. Brownley. I understand, but it is the towers, the 
mechanisms on the ground that are controlling the airspace. And 
so, I am just wondering, as we move forward and get a more 
detailed proposal, do you see some safeguards for those----
    Secretary Chao. We are very open to discussing them.
    Ms. Brownley. Thank you very much. And again, thank you for 
being here, and thank you for your service.
    I yield back.
    Mr. Shuster. I thank the gentlelady. We--Ranking Member 
DeFazio and I agreed to an 11:30 hard stop, but the Secretary 
has agreed to go 10 more minutes. So I would encourage Members 
to expedite their questions. I am sure she will answer them in 
writing, if need be.
    And with that, I am recognizing Mr. LaMalfa.
    Mr. LaMalfa. Thank you, Mr. Chairman. Being from the West, 
northern California, we have a lot of issues, transmission 
lines and vegetation management around them. And most 
transmission lines are in rural areas, anyway. So it is very 
important that we have drone capability for inspection of very 
remote, sometimes very tough terrain, power lines, hydro 
facilities, and others, as well as in agriculture, the 
flexibility we can have to help that with farming, ranching, et 
cetera.
    But we have current restrictions on the beyond-line-of-
sight aspect of that. Last year the Congress passed legislation 
directing FAA to work with critical infrastructure industries 
on the applications to fly these drones beyond line of sight. 
Most of these applications have not even been really looked at 
yet.
    So I was disappointed that, yes, FAA has communicated that 
the application was received, but it is kind of like being on 
hold, like, you know, ``Your application is very important to 
us, keep holding.''
    So can you describe what--and I know, you know, you are 
still getting up to speed there, so I don't fault anything, but 
can you describe what is FAA doing to get these applications 
going, and get answers to those folks if--for very important 
technology?
    Secretary Chao. This is such a new field that FAA, I know, 
is trying to understand and grapple with its own roles in this 
space, in connection with other agencies, and also the private 
sector--Silicon Valley, for example. But I will go back and ask 
what is the status.
    Mr. LaMalfa. Thank you very much for your appearing and for 
your leadership on this. It is very important for us in the 
very rural part of the country. I appreciate it.
    Thank you, Mr. Chairman.
    Mr. Shuster. I thank the gentleman, and with that I 
recognize Mr. Capuano.
    Mr. Capuano. Thank you, Mr. Chairman.
    And thank you, Madam Secretary, for staying a few extra 
minutes. It puzzles me why we are going to have so much faith 
in the airline industry when, in the last 2 years, they have 
proven repeatedly that they don't know how to manage large 
computerized systems. Otherwise, we wouldn't have had shutdown 
after shutdown after shutdown across this country. But that is 
a different argument, different debate.
    Secretary Chao. I think that is a point that is worth 
emphasizing, in terms of refuting. The airlines are not in 
charge of this new air traffic control system.
    Mr. Capuano. But they are going to hire people to do it, 
and they have hired people----
    Secretary Chao. No, not at all.
    Mr. Capuano. So they are just miraculously going to appear?
    Secretary Chao. It is FAA----
    Mr. Capuano. Who runs this board?
    Secretary Chao. It will be 13 people.
    Mr. Capuano. The airlines.
    Secretary Chao. It would be a candidate list provided by 
five initial nominating groups: the major airlines; the major--
--
    Mr. Capuano. The airlines.
    Secretary Chao [continuing]. Unions, airlines, unions----
    Mr. Capuano. Look, Madam Secretary----
    Secretary Chao [continuing]. General aviation groups, and 
airport----
    Mr. Capuano [continuing]. That is fine. We all know it is 
the airlines who are going to run it. And I am going to----
    Secretary Chao. I mean it is not controlled by the 
airlines.
    Mr. Capuano [continuing]. Later on today.
    Secretary Chao. If I may just----
    Mr. Capuano. Let me ask you a question.
    Secretary Chao. If there is one thing that can emerge from 
this hearing----
    Mr. Capuano. Let me ask you a question.
    Secretary Chao [continuing]. They do not control the air 
traffic control system.
    Mr. Capuano. You know, I----
    Secretary Chao. They will not.
    Mr. Capuano. You do realize that virtually nobody here 
believes that, but that is OK.
    Secretary Chao. I think critics of this proposal are using 
them as a prop.
    Mr. Capuano. Well, thank you.
    Secretary Chao. And scaring people.
    Mr. Capuano. Well, I don't think it is scary. I fly on the 
airlines every day, every week. I am going again today. I am 
not afraid of them. But they haven't proven to me that they can 
run large, computerized systems.
    Secretary Chao. They are not running the system.
    Mr. Capuano. Well, that is great. So somehow, miraculously, 
it is going to be run by somebody we don't know. That is even--
--
    Secretary Chao. By the----
    Mr. Capuano [continuing]. More assuring.
    Secretary Chao. By those who are currently running it now, 
the FAA.
    Mr. Capuano. Well, that is part of the problem with this 
legislation, isn't it? We don't know who is going to do it.
    Let me ask you a question. If I took your house, and gave 
it away to one of the airlines, that wouldn't be fair, would 
it?
    Secretary Chao. Airlines again.
    Mr. Capuano. Yes.
    Secretary Chao. I told you they are not involved.
    Mr. Capuano. Or anybody. If I gave it away to any private 
corporation, would it be fair?
    Secretary Chao. I have also said that the capitalization of 
this proposal and the asset base has yet to be resolved, and I 
look forward to working with the committee on that.
    Mr. Capuano. It is not yet to be resolved. We have 
legislation and we have a Presidential commentary on it. It is 
what is proposed in front of us. So this legislation is not 
done yet?
    Secretary Chao. No, it is not. It is up to you to accept 
it.
    Mr. Capuano. Well, I know. That is what I am doing today.
    Secretary Chao. Yes.
    Mr. Capuano. I am discussing the legislation that is in 
front of me----
    Secretary Chao. Well, I appreciate the discussion----
    Mr. Capuano [continuing]. That says give away billions of 
dollars of taxpayer-paid entities. And I don't see the 
difference between giving it away to a private entity or a 
nonprofit.
    Secretary Chao. If the Congress does not agree----
    Mr. Capuano. If you give away somebody's property, it is 
still taking their property away.
    Secretary Chao. We will look forward to working with you. 
We disagree with that, you know, please----
    Mr. Capuano. Oh, don't worry, I do disagree with it, and I 
have disagreed with it before, and I will continue to disagree 
with it tomorrow.
    Let me ask you another question. You talk repeatedly about 
putting airlines--airplanes closer and closer together, which I 
understand, I expect that. I would like to invite you this 
summer, any time you want, you pick the day, to come to my 
house. Come to my home, we will have a barbecue in the 
backyard. We will have a nice little fire, and I will bring up 
the wine and whatever you want to eat.
    And we will sit there, a mile and a half under the flight 
path of runway 33. And you will find out that when a plane goes 
over--which I don't mind, I have lived there a long time, we 
have had planes going over there all the time. But there is a 
big, big difference between a plane going over your house every 
few minutes versus every few seconds. And it has become an 
accepted problem across the country. And I am working with the 
FAA now, as we speak, to study how to deal with that. And they 
have been very good.
    And according--again, now, maybe we can change this, too. 
But the President's legislation says the FAA won't have the 
ability to do that. The FAA will only have the ability to do it 
if they go outside the noise lines. They are not outside the 
noise lines. They are within the 65 decibels. So in--except it 
is not 65 decibels every few minutes. It is now 65 decibels 
every few seconds.
    And if you want to take me up on that, since my time is--
just let me know. We will arrange it any time you want, and you 
will see the problems----
    Secretary Chao. I am sorry the planes are flying over your 
house. And if you feel differently about the noise--about the 
issues that you have discussed, we look forward to talking 
about it with you.
    Mr. Shuster. And the good news is the FAA still has to be 
involved when it comes to noise.
    We are going to have time for two questioners: Mr. Perry 
and then Mr. Woodall. And then we are going to have to close it 
down, because our agreement was--the ranking member and I--to 
get you out of here at 11:30.
    So, with that, Mr. Perry.
    Mr. Perry. Thanks, Mr. Chairman, and thanks, Madam 
Secretary. We appreciate you being here, and we appreciate the 
truth.
    With that, I just want to register my accord with the 
inspector general and the contract tower system being effective 
and efficacious, efficient for industry, for the taxpayers. And 
I just want to register it, as well, because I know it has been 
asked on several occasions.
    As well, my good friend, Mr. LaMalfa from California, asked 
about the part 107 waivers. And I too have constituents that 
have requested waiver beyond the line of sight for very 
specific reasons.
    Of course, the waiver request is in, it has been in since 
August of last year. I know you are working short-staffed, and 
we appreciate it, Madam Secretary, but we would like some 
indication of when we can expect an answer on--or more guidance 
from the FAA on the waiver process. It is one thing to submit 
the waiver and then hope that, you know, look, if there are 
some things that need to be done to bring people into 
compliance or what have you--I understand the FAA is grappling 
with this. But at some point it just takes too long, right? It 
is inefficient, it takes too long, and they are holding up the 
show.
    So, my understanding--have any beyond-the-line-of-sight 
waivers been approved? It is my----
    Secretary Chao. Well, there is a recent court decision----
    Mr. Perry. OK.
    Secretary Chao [continuing]. On this issue, which has also 
held them up. But I will--so that is--they are trying to--FAA 
is trying to decide how to handle that right now.
    Mr. Perry. OK.
    Secretary Chao. But I will get--I will remind them again 
and go back to them. And I will give you a--get them to 
coordinate with your office.
    Mr. Perry. I appreciate your involvement, Madam Secretary.
    Finally, while we look at the dollars spent on 
infrastructure improvement facilities, hard structures, 
facilities, I just want to make a case for reviewing the 
prevailing wage requirements. Some people say it is a 30-
percent increase. I have never seen that shown. I imagine it 
happens on occasion. I would say it is somewhere between 7 and 
10 percent. That is verifiable, that I can prove.
    When I look at the average current cost of a transportation 
project being $1.5 million, and looking at the threshold being 
$2,000 to invoke the prevailing wage, functionally, since 1935, 
it seems to me that we should be able to review that and allow 
more entrants into the marketplace, and save the taxpayers some 
money.
    So I am just curious if the administration is amenable to 
having a discussion about raising that threshold.
    Secretary Chao. You mean for the----
    Mr. Perry. For Davis-Bacon wage----
    Secretary Chao. Yes, but for the infrastructure project.
    Mr. Perry. Yes.
    Secretary Chao. I think the President--the administration's 
proposal is to include Davis-Bacon.
    Mr. Perry. But are you amenable to a discussion regarding 
the threshold? The threshold now is----
    Secretary Chao. I think that is actually the Secretary of 
Labor. That is not really the Secretary of Transportation.
    Mr. Perry. OK. Are you--would you be opposed to changing 
it, even as the Secretary of Transportation, or reviewing it?
    Secretary Chao. For the infrastructure proposal, I would 
like to see it passed. And I understand that, without that 
provision, the minority probably will not sign on.
    Mr. Perry. So no changes at all.
    Secretary Chao. I am interested in getting the 
infrastructure bill passed. And the specific issue that you are 
talking about, I think the Secretary of Labor probably would 
address that.
    Mr. Perry. OK. Thank you, Madam Secretary.
    I yield.
    Mr. Shuster. I thank the gentleman. With that, the final 
questioner is Mr. Woodall.
    I apologize to all Members who didn't get to ask a 
question, but we agreed to a deal.
    Mr. Woodall, please proceed.
    Mr. Woodall. Thank you, Mr. Chairman. I will be brief.
    I just had two comments, Madam Secretary. One is I 
appreciate you consistently reminding this panel that it is our 
responsibility to write the law. You are lending us all of your 
credibility, all of your expertise, all of your team's 
expertise. We get to make these decisions at the end of the 
day, and we get to sort these decisions out at the end of the 
day. And so I don't have any anxiety at all about where we come 
down, because I know it will be a collaborative team effort.
    And secondarily, I may be the only member on this committee 
who has gotten to see you all-in in your first 4 months on the 
job. You were all-in for the people of Georgia----
    Secretary Chao. Thank you.
    Mr. Woodall [continuing]. When our major interstate bridge 
collapsed in a fire. You were all-in for us within hours after 
that crisis broke out. You were short-staffed, but you sent 
people down to help us. You hadn't put together your entire 
team. But if you ask our Governor, our DOT Commissioner, they 
will both tell you they were not working with a Secretary who 
had been on the job for 4 months, they were working with a 
Secretary who had been on the job for 9 years.
    I have never heard so many compliments about the 
professionalism that the Federal Government had employed to 
serve the good men and women of Georgia. You will hear that 
from our Democratic mayor in downtown Atlanta, you will hear 
that from my Republican Governor, our DOT Commissioner. When 
you are all-in, things happen, and they happen in amazing ways, 
and ways that had not happened in Georgia before. I am glad you 
are all-in on FAA reform, glad you are all-in on 
corporatization cooperative system, and I am excited to be your 
partner, as we sort through that.
    Thank you for what you did for us in Georgia.
    Secretary Chao. Thank you.
    Mr. Shuster. I thank the gentleman.
    Madam Secretary, I thank you for being here. If you would 
just indulge me for just a minute or so----
    Secretary Chao. Yes, of course.
    Mr. Shuster. I don't have a question, I just want to make a 
comment.
    Mr. DeFazio and Mr. Larsen put forth a piece of legislation 
here, and I believe that they fundamentally agree with me that 
the FAA is broken, and that--although it is a very, very safe 
system, the efficiency, the innovation, the modernization for 
decades has fallen behind.
    Their proposal puts--taxpayers will continue to fund a 
system that I believe is dysfunctional. It gives the FAA 
Administrator a whole lot of authority, and complete freedom 
from DOT, OMB [Office of Management and Budget], and Congress, 
and contrary to what Mr. DeFazio has said publicly, my 
proposal--or our proposal we are putting forward takes Congress 
out of the equation. I believe it doesn't. I believe their 
proposal would do that. It requires a lot of studying, a lot of 
reporting.
    And additionally, putting forth the acquisition and 
personal reforms are just rehashes of the previous attempts. 
And I am sitting in this room, and I am thinking to myself this 
is like Groundhog Day. Not because we had this kind of hearing 
last year, but because my father, who sits on the wall over 
there, over 20 years ago put that legislation forward. They 
passed it, and the FAA has failed for 20 years to use that 
procurement authority, to use that--taken out of the Federal 
hiring practices.
    Again, for 20 years they failed to do that. And my friends 
from across the aisle have put that forward as their proposal 
again when we failed to do that. So again, I believe we have to 
do something transformational, something very different. And 
again, we look forward to working with you as we are going 
forward.
    And as has been reminded here earlier, this is the 
beginning of the process. There are a lot of questions, good 
questions my friends on the other side asked, and we need to 
get into the details and talk about and discuss it.
    So, with that, thank you so much for being here today. I 
appreciate it, and look forward to having you back again.
    Secretary Chao. Thank you.
    Mr. Shuster. I would ask unanimous consent that the record 
of today's hearing remain open until such time as our witnesses 
have provided answers to any questions that may be submitted to 
them in writing, and unanimous consent that the record remain 
open for 15 days for any additional comments and information 
submitted by Members or witnesses included in the record today.
    Without objection, so ordered.
    I would like to thank the Secretary again. And if no other 
Members have anything, the committee stands down.
    [Whereupon, at 11:46 a.m., the committee was adjourned.]
    
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