[Senate Hearing 115-162]
[From the U.S. Government Publishing Office]


 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2018

                              ----------                              


                         THURSDAY, JUNE 8, 2017

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

    The subcommittee met at 10:03 a.m., in room 192, Dirksen 
Senate Office Building, Hon. Richard Shelby (chairman) 
presiding.
    Present: Senators Shelby, Boozman, Capito, Kennedy, 
Shaheen, Leahy, Coons, and Van Hollen.

                         DEPARTMENT OF COMMERCE

STATEMENT OF HON. WILBUR ROSS, SECRETARY

             OPENING STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. The subcommittee will come to order.
    Good morning, Mr. Secretary. Welcome to the subcommittee.
    This morning we will hear from Commerce Secretary Wilbur 
Ross regarding the President's request for the department's 
programs and activities in 2018.
    Secretary Ross, I want to thank you for coming before this 
subcommittee to discuss the priorities of the new 
administration.
    Federal agencies across Government have been tasked with 
significantly cutting down on spending. Creating a budget is 
not easy, but it is a first step toward achieving fiscal 
responsibility.
    The Department of Commerce is charged with addressing 
several critical functions for our Nation, which include 
operating weather satellites and forecasting severe storms, 
enforcing trade laws to ensure American businesses can compete 
on a level playing field, working with distressed communities 
to spur economic development for all of our people, and 
properly managing our Nation's fisheries, among others.
    The President's fiscal year 2018 request is $7.8 billion, 
which is $1.4 billion below the 2017 enacted level, 
representing a 15 percent proposed cut in the department's 
budget.
    The President's request focuses on generally increasing 
efficiencies through a tighter budget. The request recognizes 
NOAA's need to recapitalize its aging fleet of operational 
vessels, which is essential for NOAA to continue its core 
missions in mapping, charting, and fishery data collection, 
among others.
    While I am pleased to see the department recognize the 
importance of these activities and the administration's 
prioritization of national security, I am troubled by some of 
the proposed cuts to other core programs.
    The department has requested a 45 percent reduction in 
NOAA's Polar Follow-On, PFO, satellite program. PFO is intended 
to provide the next generation of polar orbiting weather 
satellites, which currently contribute more than 80 percent of 
the data needed for numerical weather prediction models to 
forecast hurricanes and severe storms. These weather satellites 
help save lives and protect property.
    Secretary Ross, I am interested in hearing the department's 
long-range strategy behind the requested decrease. What does 
the administration consider to be an acceptable risk posture 
for the future of polar weather satellites?
    I am also concerned, Mr. Secretary, about the department's 
budget decreases for programs that would advance weather-
forecasting capabilities. For example, proposed cuts to the 
National Water Model could significantly impact our Nation's 
ability to predict and respond to severe floods. These cuts 
would slow operations at NOAA's National Water Center, which 
provides invaluable forecasts and services to the Nation for 
water-related hazards.
    The department also proposes to eliminate important 
external competitive grant programs that partner with States 
and local communities across the Nation, and which use matching 
funds to maximize any Federal investment. For example, the 
Economic Development Administration, the EDA, provides small 
but valuable investments for economically distressed areas in 
our country to spur development and support job creation. Many 
rural communities across the Nation, including my State, have 
benefited from EDA's assistance programs.
    Importantly, I believe EDA grants, like those at NOAA and 
NIST, allow States and localities to steer priorities through a 
bottom-up approach instead of Federal bureaucrats driving each 
decision.
    I fear, Mr. Secretary, the department's request to 
eliminate external partnerships will further consolidate power 
within Washington rather than maintain flexibility and 
decisionmaking within local communities, which the President 
talked about when he ran.
    Another way the department significantly impacts local 
communities is by overseeing the management of our Nation's 
fisheries. I was deeply disappointed in NOAA's decision to 
shorten the recreational fishing season for red snapper to just 
3 days in the Gulf of Mexico. Because this subcommittee has 
provided unprecedented resources and strict direction for NOAA 
to improve its management of reef fish in the gulf, I find 
NOAA's determination unacceptable. In 2017, the subcommittee 
made permanent the extension of State boundaries in the gulf 
for managing red snapper and provided $10 million to conduct an 
independent stock assessment, which will be compared to NOAA's 
internal process.
    Secretary Ross, it is my hope that the department will work 
to alleviate the hardship placed on recreational anglers and 
businesses, such as tackle shops, boat manufacturers, ice 
houses, and small businesses that rely on greater access to 
this abundant resource in the Gulf of Mexico.
    Finally, I have questions about the department's 
accountability and oversight of the upcoming 2020 census, which 
we have talked about privately. Not only did the Government 
Accountability Office add the 2020 census to its high-risk 
list, but a critical computer system was recently discovered to 
have surpassed its budget by $309 million. However, that was 
before you got there; I know that. Nonetheless, as the 2020 
census approaches, such news does not instill confidence in 
this subcommittee for the department's preparation for this 
constitutional requirement.
    Mr. Secretary, I look forward to hearing your views today 
on these and other matters, and we also look forward to working 
with you.
    Senator Shaheen.

                  STATEMENT OF SENATOR JEANNE SHAHEEN

    Senator Shaheen. Thank you, Mr. Chairman.
    Secretary Ross, thank you very much for being here to 
testify this morning.
    I especially appreciated your coming to speak to New 
Hampshire Business Day yesterday and talking to our group of 
business folks who are here from New Hampshire. One of the 
things you talked about was your work on the infrastructure 
plan that the President announced yesterday. I am encouraged by 
the new administration's interest in tackling the backlog of 
investment in our country's infrastructure needs--not just the 
roads and bridges but also the investments that smaller 
communities like we have in New Hampshire so sorely need for 
clean water and the expansion of broadband.
    I have to say I am disappointed, however, to see that the 
proposed budget for the department would eliminate a number of 
initiatives that are especially important to rural communities 
in small States like mine in New Hampshire. In fiscal years 
2015 and 2016, the Economic Development Administration, which 
is one of those programs that the budget proposes to eliminate, 
created or retained more than 72,000 jobs and leveraged an 
additional $9.3 billion in private funding.
    I was also disappointed to hear that the department 
proposes to eliminate NIST's Manufacturing Extension 
Partnership--again, something that supports our small- and 
medium-sized businesses in New Hampshire and around the 
country. The $130 million invested in MEP in 2016 returned 
$1.13 billion in Federal income tax, a return of almost $9 for 
every $1 spent, and created or retained more than 142,000 jobs.
    I certainly understand that the administration and, 
therefore, you, as Secretary, are determined to cut the budget. 
But when I look at those kinds of numbers, I do not see how 
eliminating programs like the EDA and the Manufacturing 
Extension Program really make good fiscal sense.
    The Administration also says that it is reprioritizing 
national security, but, like the Chairman, I fear that the 
budget would leave many of our shorelines and seacoasts 
unprotected. The budget proposed for the National Oceanic and 
Atmospheric Administration would eliminate development of 
hurricane and tornado forecast models, reduce the lead time and 
accuracy of tsunami warnings, and compromise the major 
satellite system used to forecast oncoming storms.
    I hope, Mr. Secretary, that you might consider coming up to 
New Hampshire at some point to meet some of the everyday 
Americans who are affected by the budget of the Department of 
Commerce and to see the good work of the employees and the 
efforts of your department. I know that you understand that, 
but I would like to introduce you to some of those folks like 
the Sea Grant researchers at the University of New Hampshire 
working on sustainable aquaculture or the fishermen in New 
Hampshire--who have almost been put out of business by some of 
the regulations of the department--but who also depend on 
accurate science and good management practices from the 
National Marine Fisheries Service. You should also come to the 
weather observatory at the top of Mount Washington, the highest 
point in the Northeast, to meet some of the rural business 
owners and town managers who rely on timely and accurate 
forecasts, as well as census data, to support their 
communities.
    All of these programs that I have mentioned are facing cuts 
under the proposed budget. I believe that the money saved from 
those cuts would be vastly outweighed by the damage done to our 
rural communities and small businesses that depend on these 
programs.
    So, Mr. Secretary, I look forward to continuing this 
discussion today and in the weeks ahead as we develop a budget 
for fiscal year 2018. I again thank you for testifying today.
    Senator Shelby. The chair now recognizes the distinguished 
Senator from Vermont, who is also our former President pro tem 
and is our senior Senator in the United States Senate, Senator 
Leahy, the ranking member on this full committee.

                 STATEMENT OF SENATOR PATRICK J. LEAHY

    Senator Leahy. Thank you very much, Senator Shelby.
    Mr. Secretary, thank you for being here today. We have a 
lot of issues to discuss, not the least of which is, of course, 
today's hearing on the President's budget proposal for the 
Department of Commerce.
    The request for the department cuts nearly $1.5 billion, or 
16 percent, from the fiscal year 2017 appropriations level. It 
has cut out a lot of popular grant research and State-based 
programs. It has cut the next-generation weather satellites. 
And, most people would agree, it fails to invest sufficiently 
in the 2020 Census. It eliminates the Economic Development 
Administration. It eliminates much of NOAA, the National 
Oceanic and Atmospheric Administration, grant funding. You have 
recommended severe cuts to our weather and storm warning 
models. And you do not sufficiently invest, as I said, in the 
Census.
    Now, this can go on and on, but as I said to other members 
of the Cabinet who have testified before our committee, I 
looked at each one of these budgets as vice chairman of the 
overall Appropriations Committee, and my conclusion is that the 
budget is abysmal. It does not maintain America's greatness. 
This is not a budget to make America great. It is a budget to 
diminish America.
    Every American has a stake in the strength of our economy, 
Republican, Democrat, independent. Vermont small businesses--
even in our little State--have a global footprint. They rely on 
our trading policies to keep them competitive. I believe that 
we export more per capita to Canada than any State in the 
country. We rely on the Department of Commerce to facilitate 
trade, and to protect our work force from unfair practices. We 
want you to promote innovation, keep us competitive in a global 
economy.
    Now, our closest trade partner, international trade 
partner, is an hour's drive from my home to our northern 
border. Each year, we export hundreds of billions of dollars--
remember, Vermont is a State of 600,000 people. We export 
hundreds of billions of dollars in goods and services to 
Canada, our Nation's largest export market in the world. We in 
Vermont are an active contributor to this global commerce. And 
supporting initiatives that help that will certainly help our 
businesses, but I am sure they will help in New Hampshire and 
virtually every other State on the border.
    Now, of course, we protect, first and foremost, our 
interests at home. But we are not isolated as a country. As you 
know, from your own business experience, our economy relies on 
partners around the world.
    Now, you show no daylight--and this is, of course, your 
decision--between you and President Trump regarding your 
attempt to renegotiate trade deals, including NAFTA. The 
President said he will renegotiate to make NAFTA better for the 
American people. I look at the billions of dollars we trade 
with Canada, and I am interested in knowing what that 
renegotiation is going to amount to. But if this budget 
proposal reflects his definition and yours of ``better,'' then 
I am greatly concerned.
    I expect you to be an independent and thoughtful counselor 
to the President, as your predecessors have been in both 
Republican and Democratic administrations, on these complicated 
matters, because they are not matters he has had experience in, 
and one cannot expect any President to have experience in all 
matters. These are going to require you to be independent and 
your recommendations.
    Thank you, Mr. Chairman.
    Senator Shelby. Thank you, Senator Leahy.
    Mr. Secretary, again, welcome to the subcommittee, your 
written testimony will be made part of the hearing record in 
its entirety. You may proceed as you wish. Thank you.

                 SUMMARY STATEMENT OF HON. WILBUR ROSS

    Secretary Ross. Thank you, Mr. Chairman. Chairman Shelby, 
Ranking Member Shaheen, and Members of the Senate 
Appropriations Subcommittee on Commerce, Justice, Science, and 
Related Agencies, thank you for this opportunity to discuss 
President Trump's fiscal year 2018 budget request, a new 
foundation for American greatness. And thank you also for your 
previous support of the Department of Commerce.
    When I was confirmed as Secretary of the Commerce on 
February 27, I took on the great responsibility of ensuring 
that our taxpayers' dollars are targeted to our core missions 
of keeping us safe and creating economic growth. The 
President's fiscal year 2018 budget request of $7.8 billion in 
discretionary funding for Commerce is a first step toward 
accomplishing those aims.
    The President's budget request prioritizes and protects 
investments in core government functions. These include 
ensuring fair and secure trade, preparing for the 2020 
decennial census, and providing the satellites necessary to 
produce timely and accurate weather forecasts. The budget also 
reduces or eliminates duplicative or redundant grant programs.
    The administration is devoting resources toward critical 
investments in our Nation's economic and national military 
security. The President's budget provides an additional $4.5 
million to the International Trade Administration for its 
enforcement and compliance section. These resources will be 
directed toward the self-initiation of antidumping and 
countervailing duty investigations.
    We will ensure that no country or foreign corporation can 
take unfair advantage of U.S. markets. This budget increase 
will create 29 new positions to accelerate these cases and 
shield U.S. businesses, which are concerned about retaliation.
    The President's budget also provides a $1 million increase 
in funding for the Bureau of Industry and Security. This 
requested funding would add 19 new special agents within the 
BIS's export enforcement offices across the United States. BIS, 
despite its current size of only about 120 special agents, 
punches far above its weight in the defense of our country.
    In March, we announced a combined civil and criminal fine 
of $1.9 billion against ZTE, a large Chinese telecommunications 
company, for illegally shipping sensitive equipment to Iran and 
North Korea. BIS took the lead in cracking this case open. So I 
am confident that these 19 additional agents and the bandwidth 
they represent will have real impact.
    The President's fiscal year 2018 budget also requests $1.5 
billion for the U.S. Census Bureau, a 2 percent increase from 
the 2017 omnibus funding level. This is a recognition of the 
important work that the Department of Commerce does in 
fulfilling the constitutional responsibilities of the executive 
branch. The President's budget funds key activities that 
prepare for the 2020 decennial census and in support of the 
bureau's other data collection functions.
    As you are well aware, the Census director has reported a 
large cost overrun in one area of the operation. The Commerce 
Secretary and Office of Management and Budget are jointly 
crosschecking and re-examining these numbers. In addition, we 
are retaining outside consultants to conduct a third-party 
review. We hope to have more clarity on this issue soon.
    The fiscal year 2018 budget also proposes $4.8 billion for 
the National Oceanic and Atmospheric Administration. NOAA's 
budget is tailored to fund its core missions of data collection 
and environmental stewardship. Within NOAA's topline, $1 
billion is recommended for the National Weather Service. 
Funding is included for the Advanced Weather Interactive 
Processing System cyclical refreshment. This reduces the risk 
of system downtime that can impede critical weather forecasts 
and warnings.
    With its $1.8 billion request for the National 
Environmental Satellite and Data Information Service, NESDIS, 
NOAA will continue its work to deploy the next generation of 
weather satellites.
    These items are just a small cross-section of our 
department's overall budget. I hope they have given you a 
glimpse into the priorities set by President Trump and the 
administration.
    I am glad for this opportunity to get into more detail with 
you and to get you answers to any specific questions you may 
have. Thank you.
    [The statement follows:]
                 Prepared Statement of Hon. Wilbur Ross
    Chairman Shelby, Ranking Member Shaheen, and Members of the Senate 
Appropriations Subcommittee, thank you for this opportunity to discuss 
President Trump's fiscal year 2018 budget request for the U.S. 
Department of Commerce.
    When I was confirmed as the Secretary of the Commerce on February 
27, 2017, I took on a great responsibility of ensuring that our 
Nation's taxpayer dollars are targeted to those programs and projects 
that will grow our economy and create a pro-growth environment. The 
Department of Commerce's fiscal year 2018 budget request of $7.8 
billion in discretionary funding is a good first step toward 
accomplishing those aims. The fiscal year 2018 request is a 16 percent 
decrease (-$1.4 billion) from the fiscal year 2017 Omnibus enacted 
level ($9.2 billion).
    President Trump has previously laid out a budget framework that 
places an increased emphasis on defense, national security, immigration 
enforcement, and reducing violent crime and drug epidemics. In 
addition, the President also has provided a roadmap for placing our 
Nation on a responsible fiscal path and not increasing the debt.
    Our fiscal year 2018 budget request aligns with President Trump's 
foundational underpinnings by zeroing in on our key mission areas and 
core competencies. In support of the President's goals, we had to make 
very difficult choices, including proposing to eliminate some of our 
bureaus as well as making sizable reductions in other programs and 
activities.
    Specifically, the fiscal year 2018 budget proposes to eliminate the 
Minority Business Development Agency (MBDA) and the Economic 
Development Administration (EDA). Furthermore, we are proposing to 
consolidate the Economics and Statistics Administration (ESA) into 
other Commerce bureaus.
    Another proposed elimination is the discontinuation of Federal 
funding for the Manufacturing Extension Partnership (MEP) program. This 
would result in a savings of $124 million.
    These eliminations and reductions are consistent with the approach 
throughout the fiscal year 2018 budget to focus on core Federal 
missions and reduce funding, such as grants, for programs supporting 
other levels of government.
    Please note that, while we greatly appreciate the support Congress 
provided the Department in the recently enacted fiscal year 2017 
Omnibus appropriations bill, a full-year 2017 appropriation was not 
enacted at the time the Department's fiscal year 2018 budget was being 
prepared. As a result, our fiscal year 2018 budget request and the 
funding levels, policy guidance and decisions contained within are 
based off the annualized funding level provided by the 2017 Continuing 
Resolution (CR). However, for the purposes of this hearing, I have 
updated my budget references to reflect the more recent fiscal year 
2017 Omnibus levels.
    Our fiscal year 2018 budget is a starting point for a larger 
dialogue that I look forward to having with you about where best to 
allocate resources to enable the Department to carry out its major 
missions to the best of its abilities. Despite some of the proposed 
reductions and eliminations, our budget recommendations uphold the 
proud tradition of this agency's legacy of investing in our greatest 
resource: The American people.
    Enumerated below in greater detail are specific investments that we 
have prioritized in the fiscal year 2018 Department of Commerce budget:
            strengthening trade enforcement and compliance:
    The United States currently has a $700 billion trade deficit (in 
goods) and is the top importer in the world. In addition, we are one of 
the least protectionist countries in the world. The fiscal year 2018 
budget begins to create a more level playing field for Americans by 
reshaping the International Trade Administration (ITA).
    The fiscal year 2018 President's budget requests $443 million for 
ITA, which is $41 million or 8 percent below the fiscal year 2017 
Omnibus enacted amount. Within that topline, increased funding (+$3 
million) is allocated for strengthening ITA's trade enforcement and 
compliance by adding 29 positions.
    These requested funds will help ITA fulfill President Trump's 
directives to review trade agreements, increase enforcement of our 
Nation's trade laws, and support ``Buy American, Hire American'' 
policies.
    Furthermore, the budget enables ITA to add capacity to address the 
growing number of antidumping and countervailing duty investigations. 
In a five-year period from fiscal year 2011 to fiscal year 2015, the 
number of new investigations initiated each year increased. In fiscal 
year 2016, 56 new investigations were initiated, which was an all-time 
high by historical standards. In addition, the requested funds will 
enable the Department to self initiate trade cases to further level the 
playing field for domestic manufacturers.
    Conversely, the fiscal year 2018 budget eliminates a number of ITA 
trade and promotion- related offices and functions, resulting in a 
reduction of 159 positions.
    Although the trade and promotion offices are downsizing, ITA will 
continue to implement measures to strengthen the effectiveness and 
efficiency of these activities to minimize the impact on U.S. business, 
with a specific focus on small and medium-sized enterprises (SMEs).
    To bolster ITA's enforcement and compliance actions, the 
President's budget requests $114 million for the Bureau of Industry and 
Security (BIS), a $1 million increase over the fiscal year 2017 Omnibus 
level (+1 percent). The requested funding will add 19 new special 
agents within BIS' export enforcement offices across the United States, 
including New York, Dallas, Chicago, Los Angeles, Washington State, San 
Jose, and Washington, DC. Resources also will be dedicated to BIS' 
ongoing domestic and international efforts to curtail illegal exports 
while facilitating secure trade with U.S. allies and close partners.
    I'm especially pleased that BIS' export enforcement office is 
already taking a proactive approach and demonstrating results. In 
March, I announced a combined civil and criminal fine of over $1 
billion on ZTE, a Chinese telecommunications company, for illegally 
shipping telecommunications equipment to Iran and North Korea.
    As part of the settlement, ZTE has agreed to pay a $661 million 
penalty to BIS, with $300 million suspended during a 7-year 
probationary period to deter future violations. Based on a court-
approved settlement, ZTE's $1.19 billion fine would be the largest 
civil penalty ever levied by BIS and the largest criminal penalty ever 
levied by the U.S. Government in an export control case. Over the last 
7 years, BIS' enforcement offices have collected an average of $74 
million in fines, $26 million in administrative fines, and 
approximately $46 million in forfeitures (on an annual basis).
   supporting research and development to better serve our customers
    The fiscal year 2018 budget strengthens our core research and 
development programs while meeting the diverse needs of our customers. 
The proposed request of $725 million for the National Institutes of 
Standards and Technology (NIST) represents a $227 million decrease (-24 
percent) from the fiscal year 2017 Omnibus enacted level. These 
proposed reductions will occur in areas that have been determined to be 
lower priorities based on their technological readiness, level of 
effort required, or where NIST's expertise is no longer required.
    Funding in fiscal year 2018 will enable NIST to provide the 
measurements and standards necessary to facilitate innovation in 
mission-critical areas, such as advanced manufacturing, communications, 
quantum science and cybersecurity. In addition, NIST will address high 
priority repairs and upgrade its facilities. Some of these planned 
efforts include removing asbestos from NIST's Building 1 facility in 
Boulder, Colorado, and renovating and modernizing the Radiation Physics 
Building in Gaithersburg, Maryland.
    Equally important is that the budget allows NIST to continue its 
outreach and engagement with the public to improve the Nation's 
cybersecurity posture. For example, NIST recently sponsored the Global 
City Teams Challenge that brought together universities, companies, and 
other interested participants to develop solutions for implementing 
advanced cyber-physical systems concepts to make our communities more 
livable, workable, safer, and sustainable. Fiscal year 2018 funding 
will help NIST enhance the Framework for Improving Critical 
Infrastructure Cybersecurity.
    I do want to mention a few of the proposed reductions in NIST's 
budget. Among the significant proposed decreases is a $69 million 
reduction to the National Laboratories, which includes a reduction of 
285 positions. Additionally, the fiscal year 2018 budget proposes to 
cut $25 million and 46 positions from the Standards Coordination and 
Special Programs Office that primarily focuses on research and 
development activities.
    Also, as previously mentioned, the fiscal year 2018 budget proposes 
to end Federal funding for the Manufacturing Extension Partnership 
(MEP) program. The proposed reduction of $124 million will eliminate 
$110 million in funding to the MEP centers, $4.8 million in contract 
support for the MEP system, and $9.3 million and a 100 percent 
reduction of NIST MEP Federal employees who support and administer the 
MEP program. The $6.0 million in the fiscal year 2018 budget will be 
used for an orderly shutdown of the program.
    Helping to establish policy and standards that govern the Internet, 
broadband and the digital economy, $36 million is proposed for the 
National Telecommunications and Information Administration's (NTIA) 
fiscal year 2018 budget. This proposed funding level will assist NTIA 
with its development and implementation of policies to meet challenges 
related to Internet openness, privacy, security, and the digital 
economy.
    Within its topline, NTIA will strengthen its multi-stakeholder 
approach to address Internet policymaking, standards development, and 
related governance issues. These efforts include developing and 
presenting U.S. Government policy positions at interagency, bilateral, 
multilateral and international organizational meetings and stakeholder 
forums.
    Moreover, NTIA will assist the Department of Commerce, United 
States Trade Representative (USTR) and other Federal agencies to help 
ensure that U.S. free trade agreements preserve and create jobs for 
Americans while facilitating economic growth. NTIA will provide issue 
expertise and policy support, particularly on issues involving e-
commerce services and the free flow of information across borders.
    Augmenting its existing efforts, the fiscal year 2018 budget also 
will enable NTIA to increase its participation in Department of 
Commerce-led bilateral commercial dialogues to improve understanding 
with counterpart trade and economic ministries. NTIA will continue to 
provide technological and policy advice as part of the established 
trade dispute resolution processes.
      streamlining government operations and improving efficiency
    The administration's fiscal year 2018 budget proposes transferring 
approximately $54 billion in discretionary spending previously 
allocated for civilian agencies to support defense and national 
security initiatives. To comport with the administration's larger 
policies, the Department proposes to eliminate the Minority Business 
Development Agency (MBDA) and the Economic Development Administration 
(EDA).
    The fiscal year 2018 budget request for MBDA of $6 million is a $28 
million decrease from the fiscal year 2017 Omnibus (-82 percent). This 
reduction would result in the loss of 55 positions. The $6 million 
request will cover anticipated costs associated with winding down MBDA. 
These costs include personnel costs and miscellaneous costs (such as 
records and archives management and the responsible disposal of IT 
equipment).
    The budget assumes that the orderly wind down of MBDA functions 
would begin on October 1, 2017 and be completed by February 3, 2018.
    Similarly, the fiscal year 2018 budget requests $30 million for EDA 
for costs associated with closing the agency. This would result in the 
loss of 98 positions in 2018. These eliminations are part of a broader 
effort to eliminate duplicative and unauthorized economic development 
programs across the Federal Government.
    Another area the fiscal year 2018 budget proposes to eliminate is 
the Economics and Statistics Administration's (ESA) policy support 
activities. ESA's remaining functions will be consolidated into other 
parts of Commerce, including the Office of the Secretary, Bureau of 
Economic Analysis (BEA), and the U.S. Census Bureau.
    The consolidation of ESA would provide nearly $4 million in budget 
savings and would consolidate 15 positions into other parts of 
Commerce. For example, ESA's Under Secretary for Economic Affairs will 
better serve the Secretary and Department from the Office of the 
Secretary and will continue to provide analysis and guidance on matters 
related to economic policy.
    The fiscal year 2018 budget recommends $97 million for BEA, a $10 
million decrease from the fiscal year 2017 Omnibus (-10 percent). The 
fiscal year 2018 budget enables BEA to provide timely and accurate 
economic data and produce key statistical measures, such as gross 
domestic product (GDP) and personal income statistical indicators. 
Careful thought was given to which initiatives could be reduced with 
minimal impact on BEA's core programs. Some of BEA's proposed 
reductions include discontinuing efforts to separately measure the 
impact of small businesses on the U.S. economy and ceasing work to 
provide more frequent and detailed trade-in-services data for some of 
the most dynamic industries of the U.S. economy.
                      empowering the data economy
    The fiscal year 2018 budget request of $1.5 billion for the U.S. 
Census Bureau (+$27 million or +2 percent over the fiscal year 2017 
Omnibus level) is a recognition of the important work that the agency 
is undertaking to reach a number of its critical milestones.
    Of the $1.5 billion total, a $46 million increase is requested for 
activities related to the ramp up associated with the 2020 Decennial 
Census. The budget provides funding for the final year of a 4-year plan 
focused on operational, design, development and systems testing in 
preparation for the 2020 Census.
    In addition, the budget supports an End-to-End Census Test in 2018, 
which will allow for a complete test of the major field operations and 
IT systems planned for the 2020 Census, beginning with the development 
of the address list and ending with the release of a set of prototype 
geographic and data products. This test will give the Census Bureau an 
opportunity to reaffirm that the reengineered 2020 Census will function 
according to the specified design.
    The American Community Survey (ACS) serves as a testbed for the 
2020 Census. The fiscal year 2018 budget proposes a reduction to the 
telephone non-response follow up operations in order to promote data-
driven decisions within this program and increase efficiency.
    Requested funding levels in the fiscal year 2018 budget will help 
the Census Bureau fulfill a requirement in the United States Code to 
submit the Census 2020 and ACS questions and some topics to Congress by 
the statutory deadline (April 1, 2018).
    The fiscal year 2018 budget also supports data collection and 
processing operations for the 2017 Economic Census and Census of 
Governments, which provide the foundation for economic data that drive 
investment and job creation.
    Another notable increase within Census is an additional $13 million 
for its enterprise data collection and dissemination systems. This 
increase would consolidate funding for enterprise data dissemination 
and includes support for the Administrative Records Clearinghouse, 
which enables the strategic reuse of administrative data collected by 
government programs.
    A $24 million reduction from the 2017 Omnibus for Census' Current 
Economic Statistics Program is proposed in the fiscal year 2018 budget. 
This program provides the public and private sectors with national 
statistical profiles the U.S. economy and its industries. While the 
reductions will scale back planned research and make operational and 
methodological changes to surveys, the data and information that 
businesses use to make investment decisions that drive economic growth 
will be preserved.
    The $3.5 billion request in fiscal year 2018 for the U.S. Patent 
and Trade Office (PTO) will help American entrepreneurs and businesses 
bring their innovations to the marketplace. Funded entirely by fees 
from their users, PTO's focus in fiscal year 2018 will be on 
accomplishing the pillars of its 2014-2018 Strategic Plan. These goals 
include reducing patent backlogs, maintaining trademark quality, 
providing domestic and global leadership in intellectual property, and 
educating small businesses on obtaining and protecting intellectual 
property.
    In fiscal year 2018, PTO also plans to optimize its workforce with 
planned examiner staffing reductions through attrition in its patent 
examiners while also increasing investments in its IT portfolio, and 
replacing employee laptops and network equipment at the end of their 
useful life.
    Other planned enhancements will be to upgrade PTO IT systems. For 
example, PTO is implementing a fee processing next generation system 
that assists in the implementation of fee collection process 
recommendations. Some of the new features that are planned to be added 
in fiscal year 2018 include additional capability to request and track 
refunds as well as reconciling international payments to international 
applications.
sustaining our natural resources while fostering economic opportunities
    The fiscal year 2018 budget proposes $4.8 billion for the National 
Oceanic and Atmospheric Administration (NOAA), a decrease of $905 
million or 16 percent below the fiscal year 2017 Omnibus. The budget is 
tailored to fund NOAA's core missions of environmental and public 
stewardship while increasing economic opportunities.
    Within NOAA's topline, $1.0 billion is recommended for the National 
Weather Service (NWS). Funding is included for the Advanced Weather 
Interactive Processing System Cyclical Refreshment, reducing the risk 
of system downtime that can impede critical weather forecasts and 
warnings.
    The budget also supports the Service Life Extension Program on the 
aging Automated Surface Observing System, which increases accuracy and 
timeliness of NWS forecasts and warnings, particularly near airports, 
enhancing aviation safety and efficiency. However, funding for these 
and other NWS activities required difficult tradeoffs, such as reducing 
or eliminating components of NOAA's Tsunami Research and Operational 
Warning program as well as terminating investment in Mid-Range Weather 
Outlooks.
    With its $1.8 billion request for the National Environmental 
Satellite and Data Information Service (NESDIS), NOAA will continue its 
work to deploy the next generation of weather satellites and 
observational infrastructure. The fiscal year 2018 budget fully funds 
the Geostationary Systems -R (GOES-R) and Joint Polar Satellite System 
programs, including a $317 million planned programmatic decrease 
related to the GOES-16 (formerly GOES-R satellite), which successfully 
launched on November 19, 2016. Another proposed decrease within the 
budget is a $189 million reduction for the continued development of the 
Polar Follow On (PFO) satellites. The PFO satellites will provide 
continuity of polar observations beyond the Joint Polar Satellite 
System program.
    The budget recommends $845 million for NOAA's National Marine 
Fisheries Service (NMFS) to conduct sound science and an ecosystem-
based approach to management to provide productive and sustainable 
fisheries; safe sources of seafood; the recovery and conservation of 
protected resources; and healthy ecosystems.
    NOAA's fiscal year 2018 Office of Marine and Aviation Operations' 
(OMAO) request of $332 million includes $75 million to begin the 
construction of a second Auxiliary General Oceanographic Research (AGOR 
II) vessel as part of NOAA's multi-year fleet recapitalization 
initiative. In addition, the budget includes a $2 million increase (for 
a total of $34 million) to fund increased lease and fuel costs at a new 
Aircraft Operations Center (AOC) in Lakeland, Florida. NOAA is in the 
process of relocating from the MacDill Air Force Base in Tampa and 
expects to be moved into its new location by June 1, 2017. The fiscal 
year 2018 budget fully funds all of the AOC's fiscal year 2018 new 
leasing requirements and related costs.
    To comply with the administration's overarching policy priorities, 
NOAA is proposing to eliminate a number of its external grant programs, 
which approximately total $350 million. This includes $72 million for 
NOAA's National Sea Grant College and Marine Aquaculture grant 
programs; a $75 million reduction to the National Ocean Service's 
Coastal Zone Management and the Regional Coastal Resilience grant 
programs; and $65 million for the Pacific Coastal Salmon Recovery Fund 
(PCSRF), which provide resources to restore and conserve Pacific salmon 
and steelhead.
    NOAA also proposes to terminate its Office of Education. This 
includes terminating the Competitive Education Grants and Educational 
Partnership Program with Minority Serving Institutions (EPP/MSI) 
grants. It also includes the termination of Bay-Watershed Educational 
and Training (B-Wet) Regional Programs where NOAA will continue to 
provide watershed educational experiences for students through other 
programs, including National Marine Sanctuaries.
        evolving the department of commerce for the 21st century
    We are continually exploring ways to do things better and adopt 
best practices, both from the government and from the private sector. 
The $64 million included in the fiscal year 2018 budget request for the 
Departmental Management (DM) account is $2 million above the fiscal 
year 2017 Omnibus enacted level or an increase of 3 percent. Highlights 
of this request include a $5 million program increase for the 
Investigations and Threat Management Division, which crosscuts all 
Commerce operating units in an effort to detect critical threats to the 
Department's U.S. economic advancement mission. The requested increase 
also devotes resources for mandated requirements such as, Insider 
Threat, Transnational Organized Crime, and national strategies for 
counterintelligence.
    In fiscal year 2018, the Department will continue to focus on 
Enterprise Services to achieve cost savings while improving customer 
service. The Department is embarking upon updating its IT 
infrastructure and initiating an IT Shared Services Initiative aimed at 
consolidating commodity services across bureaus to gain economies of 
scale, improve service delivery, and improve customer satisfaction. As 
part of this effort, six IT shared services were identified and 
prioritized for deployment in the fiscal year 2016-fiscal year 2017 
timeframe. As these IT shared services are deployed, Commerce's Office 
of Chief Information Officer will focus on the delivery and measurement 
of achieved functionality and improvements in customer satisfaction and 
value delivered to our various customers and stakeholders.
    Our budget request also provides $1 million for ongoing renovation 
and modernization of the Herbert C. Hoover Building (HCHB). Commerce is 
in the process of modernizing its infrastructure to protect the safety 
of employees and provide quality service to citizens. This renovation 
provides the solutions to replace major building systems (mechanical, 
electrical, plumbing, heating, ventilation, air conditioning, and life 
safety systems) that are beyond their useful life and deteriorating. 
Funding in the fiscal year 2018 budget will support five positions. The 
renovation project is anticipated to continue through unobligated 
balances. There are no programmatic increases for further renovation as 
the Department plans to pause before undertaking the next phase (Phase 
5) of the HCHB building renovation.
    Finally, in fiscal year 2018, the request for the Department of 
Commerce's Office of Inspector General is $38 million, including $32 
million in direct appropriations, a $2 million USPTO transfer, a $1.3 
million transfer from NOAA, and a transfer in total of $2.6 million 
from Census. The fiscal year 2018 request includes a $1.0 million 
increase from the Census Bureau to provide oversight and to monitor 
vital 2020 Decennial activities, which includes the final major test of 
a new IT system, new strategies to contact households, and improved 
field operations.
                               conclusion
    Although my tenure at Commerce has been short, we have hit the 
ground running and already are creating additional business 
opportunities by working with a broad coalition of stakeholders to 
remove unnecessary regulations and increasing consumer confidence. By 
prioritizing our industries, trade and economic advantages, and our 
workforce, we will continue to be an economic engine, both in the 
United States and around the world.
    I look forward to working with this Committee and the rest of the 
Congress to achieve our shared goals on behalf of the Nation's 
taxpayers.
    For additional information about the Department's fiscal year 2018 
budget, please visit the Department's website at: http://
www.osec.doc.gov/bmi/budget/.

    Senator Shelby. Thank you, Mr. Secretary. I will start the 
questioning.

                              RED SNAPPER

    For the past several years, this subcommittee has provided 
what we believe is clear direction for the department and NOAA 
to improve its management of reef fish in the Gulf of Mexico by 
counting fish in areas where fish live, such as around 
artificial reefs, which the gulf is full of.
    The fiscal year 2017 omnibus continued unprecedented 
funding levels for an independent stock assessment to better 
understand the abundance of red snapper, for example, in the 
gulf. Additionally, the omnibus permanently extended State 
fishery boundaries in the gulf to provide more days on the 
water for recreational anglers.
    Despite these efforts, the department has continued to 
decrease fishing days for recreational fishermen. What was once 
a 46-day season back in 2012 has dwindled to merely 3 days in 
2017--3 days.
    My questions are these: How does the department's 2018-
budget request align with the subcommittee's past direction and 
continued goal to provide more days on the water for 
recreational anglers? Secondly, how will the department's new 
leadership team, which you head as Secretary of Commerce, 
ensure that NOAA looks for ways to help recreational fishermen 
gain greater access to the abundant red snapper fisheries 
instead of finding ways to restrict them?
    We have a problem there, Mr. Secretary. Go ahead.
    Secretary Ross. First of all, thank you for your leadership 
on this issue, Chairman Shelby.
    NOAA continues to execute the funding provided last year to 
conduct an agency independent abundance estimate for the Gulf 
of Mexico and red snapper. This work is on track to be 
completed in fiscal year 2019.
    The NMFS will use new information gathered from this 
independent estimate to improve its stock assessment as 
appropriate. While the work on the independent estimate is 
ongoing, the 2018 budget allows NOAA to continue to produce 
stock assessment for red snapper as part of its national stock 
assessment program.
    There have been many management challenges over the years, 
and I assure you the management of this fishery is a high 
priority for the department. I share the President's commitment 
to cutting unnecessary red tape and eliminating failed 
regulations. I understand how Congress and fishermen, 
particularly private anglers, are frustrated that the Federal 
fishing season continues to shorten even as the total quota 
increases.
    What we have been doing is meeting with congressional staff 
quite repeatedly, and then with State fishing authorities. We 
believe we are very close to a compromise where they will yield 
some of the days allocated to their parties to the recreational 
fishing.
    So I have fairly good confidence that we will end up with 
far more than the 3-day season that had originally been laid 
out in the allocation of catch.
    Senator Shelby. Mr. Secretary, anecdotally, I will tell you 
I have never seen fish so large, red snapper, and so abundant 
in the gulf. Nobody wants to overfish anything. We should not 
do that. But underfishing is a dangerous thing, too, and it 
affects the whole Gulf of Mexico.

                         NATIONAL WATER CENTER

    Mr. Secretary, getting into another area, with regards to 
the weather operations and research conducted at the 
department, one area I feel is very important is advancing our 
Nation's capabilities in forecasting water-related natural 
disasters such as floods, droughts, and high-impact storm 
surges.
    We have on this subcommittee for years supported the 
National Weather Service's efforts to consolidate and to create 
a streamlined, integrated water prediction program into the 
National Water Center, which we will all benefit from, the goal 
of which is to provide our communities with better tools to 
predict severe weather and to manage our water resources.
    Yet the budget that the President's request proposes 
curtails recent advances in weather prediction and cuts weather 
research. It seems like a contradiction.
    Question to you, Mr. Secretary. What was the 
administration's rationale, if any, for cutting funding for 
weather operations and research for water-related hazards? In 
particular, how does a cut to the newly created National Water 
Model, which vastly improves flood forecasting, consistent with 
the administration's prioritization of public safety?
    I think we have some work to do here. Go ahead.
    Secretary Ross. I thank you for the subcommittee's support 
for the National Water Model in the 2017 fiscal year omnibus. 
Using those funds, NOAA has made great progress with the 
National Water Model, and those efforts are sustained in the 
fiscal year 2018 budget.
    I will give you a little bit of background. The fiscal year 
2018 budget cuts investment from the National Water Model by 
$3.1 million from the fiscal year 2017 annualized continuing 
resolution. This will slow upgrades to the National Water Model 
and will delay development of centralized weather prediction 
products and services at the National Water Center.
    In fiscal year 2016, NOAA launched the first centralized 
operational National Water Model. We believe that it has 
adequate funding to continue at a reasonable level those 
developments.
    We certainly appreciate the urgency and the importance of 
continuing good, accurate, timely weather forecasting.
    Senator Shelby. Thank you.

                           2020 CENSUS COSTS

    My last question has to do with the 2020 census cost, which 
is very important to this subcommittee, because it is a very 
expensive item.
    This subcommittee has been consistently concerned with the 
ballooning cost of the decennial census, and it has directed 
the Census Bureau before to prioritize its spending toward 
activities that have the greatest potential to reduce overall 
costs. The subcommittee's goal for the past several years has 
been to obtain an overall cost for conducting the 2020 census 
at or below the cost to the 2010 census.
    GAO recently added the 2020 census to its list of high-risk 
programs, Mr. Secretary, and is clearly skeptical of the 2020 
census cost estimates and the number of mostly untested 
approaches, which we have talked about, for carrying out the 
census.
    A couple questions here. How does the 2018 budget request 
keep the department on track to ensure that the total cost of 
the 2020 census is at or below the cost of the 2010 census? 
Secondly, are there changes planned for the upcoming year that 
will affect current cost projections?
    Secretary Ross. Mr. Chairman, as you know, John Thompson 
has submitted his resignation as the director of the Census. We 
have appointed a temporary replacement for him, and we are 
actively seeking a new permanent director of the Census. So we 
intend to have that completed as soon as we possibly can.
    From the very first day that I joined the department, the 
Census Bureau has been of great concern to me from both points 
of view. The first point of view is making sure that we do 
accurately count every person where that person normally lives. 
That is first and foremost in my mind. The second objective is 
to do that as economically as we possibly can.
    The census, as you know, undertook a very large 
technological change in the way the census is taken. Their hope 
is to preserve the accuracy and yet to reduce the budgetary 
costs.
    My concerns about it have been the complexity of what they 
are trying to do and the number of moving parts that have to be 
brought together at the right time under the right costs. I 
have particular concerns that many of the key contracts are on 
a time and material basis, and that is a very dangerous way to 
do contracting, in that it has an implied incentive for the 
contracting partner to perhaps use more time than one might if 
it were on a fixed-cost basis.
    So what we have done is we have put together a team from 
the parent Commerce Department finance staff plus the OMB staff 
to do a crash review of what has been going on, why there was 
suddenly this 47 percent surprise overrun, what are the 
implications for the relationships between the Census 
department and these contractors going forward, and what may be 
the maximum possible cost that we could encounter should we 
continue with the full technological effort that they had 
underway or should there be some modification.
    It will probably take us another 30 days or 45 days, or 
something of that general magnitude, in order to come back with 
very good answers. So at the moment, unfortunately, I do not 
feel that I have a high degree of confidence in the budget that 
Mr. Thompson had indicated. But I promise you that, when we 
come back, it will be a number I can stand behind.
    Senator Shelby. Thank you.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.

                          FISHING REGULATIONS

    I would like to return to the question of fishing. We have 
a different challenge in New Hampshire and the Northeast than 
they do on the Gulf Coast. We have only 18 miles of coastline 
in New Hampshire, but it is very important to our economy. We 
have a fishing industry that goes back to the 1600s when people 
first landed on our shores.
    Unfortunately, our commercial fishing industry, because of 
NOAA regulations, has seen their allowable fishing quota cut by 
95 percent. I am going to repeat that, because I think it is 
important--95 percent since 2012 because of the Federal 
regulations restricting their catch.
    As a result, the number of groundfish vessels in New 
Hampshire has declined by two-thirds over the same time period, 
so that now we have just 21 boats left. While that may not seem 
like anything that we should worry about for some people 
looking at the big picture, those boats and the industry are 
very important to our seacoast economy because they support 
restaurants and locally caught seafood that are important to 
the tourism industry.
    One of the things that is further exacerbating the 
challenge that our fishing boats are facing right now is that 
the National Marine Fisheries Service is enforcing a new and an 
unaffordable fee on fishermen to pay for the cost of Federal 
observers.
    Now, this is something that has been raised before with the 
fisheries service and with NOAA, but I am hoping that you will 
give me your commitment today to take a look at this issue and 
see if there is some relief we can provide to the fishing boats 
in New Hampshire and other places in the Northeast where they 
are really being hit by these costs.
    Secretary Ross. I understand that many New England 
fishermen are facing intense financial pressure due to reduced 
catch limits.
    My objective is to get to the maximum sustainable catch in 
each of the various regions of the country. A number of the 
regions have raised a similar issue to what you mentioned, 
raising the question, has NOAA gone a little bit too far in its 
judgment as to just exactly what is needed?
    I am also troubled by the fact that the United States, 
despite our huge coastlines and our huge rivers and lakes 
inland, we run, believe it or not, a trade deficit in fish 
products that is over $10 billion a year. I find it 
unimaginable that this is an appropriate situation for us.
    So while we can no longer continue to fully cover 
industry's costs for the at-sea monitoring program, NOAA 
Fisheries will continue to reimburse groundfish vessels for a 
portion of their at-sea monitoring costs in fishing year 2017, 
albeit it will be at a rate lower than the 85 percent 
reimbursement that was made previously.
    The total reimbursement rate is still being determined and 
will depend on a variety of factors, including fishing activity 
and the funds remaining in the grant to the Atlantic States 
Marine Fisheries Commission. We expect to finalize those 
calculations and make the announcement in the very near future.
    In the Greater Atlantic Region, NOAA Fisheries is 
collaborating with multiple industry and governmental 
organization partners to test the use of video camera systems 
in place of human at-sea monitors in the groundfish fishery. 
However, challenges remain, including having the ability to 
distinguish between similar species.
    In addition, perspectives on electronic monitoring, the so-
called EM, such as on privacy and cost, vary from coast to 
coast and sometimes even within a single fishery. The regional 
fishery management council process allows us to get these 
sometimes conflicting perspectives out into the open and 
addressed, and we continue to work through that process to 
explore electronic monitoring.
    Senator Shaheen. I appreciate that, and I hope that you 
will continue to work with the fishing industries in the 
Northeast as we address this, because this is the last straw 
that could really break the fishing industry in New Hampshire.
    Mr. Chairman, I know my time is up. Can I ask one more 
question?
    Senator Shelby. Go ahead. Proceed.

                         INTERNATIONAL TOURISM

    Senator Shaheen. Secretary Ross, you mentioned the concern 
that you have about our export deficit. One of the proposals in 
the budget that really puzzled me was the proposal to eliminate 
Brand USA, which is the public-private partnership that 
promotes tourism internationally.
    I was surprised because it seems to me that tourism is one 
way to reduce the trade deficit, and the U.S. was one of the 
last, I think the last, Western countries in the world who 
actually put an advertising campaign in place through Brand USA 
that does not use taxpayer dollars, but rather asks foreign 
travelers to pay fees when they are traveling to the United 
States.
    Now one of the things that I have learned as Governor is 
that international travelers spend more money when they get to 
the U.S. and they stay here longer. In New Hampshire, we see a 
$9 return on investment for every $1 that State and local 
governments put into promoting tourism, and the return on 
investment is even higher at a national level.
    I am really puzzled by the decision to eliminate a program 
that has been working. Brand USA brought in over $4 billion in 
2016. It added revenue and currently supports 60,000 American 
jobs without spending a dime in taxpayer dollars.
    So I wonder if you can share with us the thinking of the 
department in eliminating a program that is working so well 
without using taxpayer dollars.
    Secretary Ross. Well, we certainly are in support of the 
tourism industry. In fact, I just spoke at the big annual 
conference of the tourist groups a few days ago, which had a 
huge attendance at that session, and a very receptive audience.
    I think the tourism industry has a number of challenges to 
face. One is the increased security that has, unfortunately, 
become very necessary at the airports because of the whole 
terrorist situation and the absolute importance of passenger 
safety.
    The second challenge, of course, is that the U.S. dollar 
has been very strong relative to most of the currencies of the 
other countries from which people come to the United States.
    So one suggestion that I had for the tourist industry, 
which they actually seemed to appreciate, was the idea of 
perhaps including in their promotion destinations that are not 
the big box-office cities that are the most expensive, but also 
including some of the smaller but still fascinating and very 
attractive locales that are underserved in terms of how many 
foreign visitors come.
    So we have been continuing to try to work very actively 
with the tourism industry, because we recognize not only does 
it bring a lot of dollars in from regular tourists but also 
people come here for educational purposes. They come here for 
medical purposes. They come for a variety of reasons, not least 
of which is the potential that, as they become a little more 
familiar with the United States, they may very well consider 
investing here, putting a business here, doing other things 
that promote activity.
    But the reality is we have had to make some very hard 
choices in a period of budget stringency. And this program was 
deemed to be one of those that, at least for the time being, we 
could live without.
    Also, we are not reducing our overall effort. It is just 
this particular program is not going to be included in the 
budget.
    Senator Shaheen. Well, Mr. Secretary, I think you just made 
a very good argument for why the international marketing that 
is done through Brand USA is a program we should continue.
    Thank you, Mr. Chairman.
    Senator Shelby. The Senator from West Virginia.
    Senator Capito. Thank you, Mr. Chairman. I thank the 
ranking member. And, Mr. Secretary, thank you for being here 
today.

                          ECONOMIC DEVELOPMENT

    As you may recall, when we first met in my office and then 
in the Commerce Committee when you came before the Commerce 
Committee in your confirmation hearing, I did ask and we spent 
some time talking about the EDA. And I was greatly encouraged 
by your comments then that the EDA could ``be a valuable source 
of seed money for projects,'' understanding this is seed money 
and that, due to budgetary constraints, that would be the most 
that they could do.
    Well, this budget further constrains the EDA. You mentioned 
it briefly in your opening statement. It zeros out the funding. 
I think you mentioned that it is duplicative, or it is not 
serving its intended purpose.
    I would say, and I think I emphasized this in my statements 
to you, in our State of West Virginia, we are just now getting 
EDA to really seed some very good projects, expanded broadband, 
which you and I have talked about, and other very valuable 
economic decisions, I think, in a State that has had a major 
downturn over the last 8 years.
    And we have also been using the EDA funds to help us 
transition, which because of our downturn from the last 
administration, we have to do, and we are doing it.
    So I guess my question is, number one, I am going to 
register a complaint on that, and I think there will be no 
surprise there. But why do you feel that these functions are 
provided elsewhere or are duplicative? And where else are those 
needs being met?
    Secretary Ross. Thank you for that question, Senator 
Capito.
    I am proud of the investments that the EDA has made in the 
last 52 years in economically distressed regions, and I am 
proud of the outcomes of those investments, which spurred local 
innovation and entrepreneurship, and saved jobs and leveraged 
private investments.
    But the administration's 2018 budget prioritizes rebuilding 
the military and making critical investments in the Nation's 
security. It also identifies the savings and efficiencies 
needed to keep the country on a responsible fiscal path. The 
administration has made the necessary tradeoffs and choices, as 
painful as many of them, including this one, have been. And 
this means changing the role and size of the Federal Government 
and prioritizing those programs that provide a good return for 
the taxpayer, as well as those that serve the most critical 
functions while also consolidating or eliminating duplicative, 
ineffective, or less critical programs.
    Many difficult decisions were necessary to reach the 
funding level provided in this budget, and unfortunately, the 
elimination of EDA is one of them.
    Since 2011, the Government Accountability Office has been 
issuing annual reports entitled ``Opportunities to Reduce 
Fragmentation, Overlap, and Duplication, and Achieve Other 
Financial Benefits.'' The economic development programs were 
among the first areas that the GAO identified as an area with 
duplication.
    You may be amazed to hear that there are 80 economic 
development programs at four agencies--Commerce, HUD, SBA, and 
the U.S. Department of Agriculture. Even as recently as 2016, 
while these GAO reports identified that the agencies were 
making good progress in better coordination of the activities 
of the programs, the fact remains that there are multiple 
economic development programs throughout the Federal 
Government. And in a time of tough budget choices, it is 
incumbent on us to identify such opportunities to reduce 
duplication.
    The budget does include $30 million to cover the costs 
associated with closing down the EDA in fiscal year 2018. There 
will be additional costs in out-years for the EDA or any 
successor agency. So this budget assumes that the orderly 
closure of agency functions will begin in fiscal year 2018.
    Senator Capito. Well, thanks for the lengthy explanation. 
And I could quibble with certain parts of it, which I will not 
take my time to do, although I will say that I was just in a 
hearing yesterday with Secretary Carson at HUD. The 
administration has zeroed out the CDBG funds, another source of 
local economic development funds that are used to leverage not 
just private investment but State and local resources to get 
these water projects over the way, to get the broadband 
expansion.
    So I know this subcommittee will be taking another look at 
this and at EDA in particular.
    I have another question about NOAA, but I will just submit 
that to you maybe in writing, and maybe you could make a 
response to me in that way.
    Thank you so much.
    Secretary Ross. Thank you, Senator Capito.
    Senator Shelby. Senator Coons.
    Senator Coons. Thank you, Mr. Chairman, Ranking Member 
Shaheen.
    Thank you, Secretary Ross.

                  MANUFACTURING EXTENSION PARTNERSHIP

    When we first sat down and met in my office in March, we 
discussed a number of issues that come under your purview now: 
the importance of a strong patent system in protecting our 
intellectual property; continuing to grow our exports, 
particularly poultry and exports to Africa; and especially the 
importance of manufacturing.
    As you may recall, I spent 8 years in the private sector in 
a manufacturing company, and in my now 7 years in the Senate, I 
visited dozens and dozens of small and medium manufacturers, 
mostly in my State, and have been impressed with one of the 
Federal Government's most effective programs.
    So you can imagine both my surprise and disappointment when 
I saw that the Commerce Department's budget completely 
eliminated funding for the Manufacturing Extension Partnership 
program and significantly cut funding for NIST's Manufacturing 
USA program.
    I was, frankly, also surprised by the degree to which the 
entire budget cuts nondefense R&D. As a person who trained as a 
chemist and who has seen in the private sector the value of 
investing in research and development, the roughly $14 billion 
cut overall, about 20 percent, to nondefense R&D strikes me as 
something that will really weigh on our competitiveness long-
term.
    Let me turn to the MEP. In your opening statement, you 
suggested that your budget proposal eliminates duplicative and 
redundant grant programs. I take that as having been a 
reference to the EDA and MEP, and that you focus on programs 
with a good return for the taxpayer, and that advance the 
department's core mission.
    Given that the President ran on a platform of strengthening 
American manufacturing, something I embrace and would enjoy 
working with you more closely on, help me understand your 
argument that the Manufacturing Extension Partnership, a 
relatively small but very effective program with a demonstrated 
9-to-1 leverage, in terms of the economic impact for every 
Federal dollar, is duplicative, or that somehow nonfederal 
sources will make up for the loss in Federal funding if it were 
completely eliminated.
    Secretary Ross. Thank you for that question, Senator Coons.
    As you know, I spent most of my adult life in 
manufacturing, so I am certainly not an anti-manufacturing 
person.
    Senator Coons. I understand.
    Secretary Ross. But this budget is about priorities. The 
President has made the safety of our people his budget's number 
one priority, and, as such, he prioritized increased funding 
for defense and public safety-related activities.
    Manufacturing is naturally critical to our economic and 
national security, but investing in programs that duplicate 
capabilities already offered by the private sector is not the 
best use of Federal resources.
    Senator Coons. I will interrupt you there, if I might, Mr. 
Secretary. I am simply asserting that, as someone who worked in 
the private sector, like you, and is now in the public sector, 
in my role first as a county-elected official and now as a U.S. 
Senator, I see no comparable Federal program or private-sector 
program that provides the significant connection to cutting-
edge resources, insights, innovation on value-stream mapping, 
on inventory control, and on quality control, and on continuous 
improvement that the MEP does.
    Help me understand why eliminating this is a good choice 
when you are making difficult choices in your department.
    Secretary Ross. Well, Senator, as you probably remember, 
the original intention when that program was established was 
that it would transition solely to nonfederal revenue sources, 
and this is consistent with that original objective that it 
had.
    We also have been trying very hard as part of the Workforce 
of the Future project that Ivanka Trump is leading, and in 
which I am participating quite actively, to try to figure out 
ways to work through community colleges and other sources that 
have expressed interest in picking up some of these kinds of 
intellectual resources that had previously been provided 
through the Manufacturing Extension Partnership.
    So it is a work in progress. We are not losing track of the 
objective, which is to try to have those services provided. It 
is just that, in a period of difficult choices, some things 
that we otherwise would very much like to keep going, we just 
cannot afford to do.
    Senator Coons. Well, I appreciate that response, at least 
to the extent that you recognize that this is a program that is 
not flawed. It is not a program that fails to deliver results. 
You are simply describing it as one that, in a time of tough 
choices, falls below the line.
    I disagree with the administration's prioritization that 
says strengthening small and medium manufacturing is not a high 
priority for our country. But that is part of the point of 
having Appropriations Committee hearings, is for us to set our 
priorities. That is part of the role that Congress will play.
    I will just close by saying that Manufacturing USA and the 
critical role of NIST is also something I just wanted to 
elevate. I have visited NIST at Gaithersburg. It is one of this 
country's real jewels. They do remarkable research, and I think 
they are underrecognized and underappreciated. I think we would 
really be causing harm to our competitiveness as a country to 
significantly cut NIST and to abandon the Manufacturing USA 
direction.
    I look forward to trying to find ways to work together on a 
bipartisan basis to preserve and sustain those programs that I 
think have demonstrated effectiveness in strengthening 
manufacturing and to find other ways that we can keep our 
country safe and secure.
    What I hear from Delawareans week in and week out is they 
want good jobs. And in a State that lost a lot of its 
manufacturing jobs, they care deeply about small and medium 
manufacturers.
    Thank you, Mr. Secretary.
    Senator Shelby. The Senator from Louisiana, Senator 
Kennedy.
    Senator Kennedy. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for your service. I want to 
cover, in the 5 minutes I have, just a couple thoughts.
    Number one, your proposed budget does impact some programs 
in my State, and I would like, at some point, to sit down with 
you and your staff and talk about your thinking in that regard. 
I really do want to understand your point of view. I do not 
want to take the time to do that today.
    I do want to thank you, though for your overarching 
approach and your understanding that we cannot continue to 
spend more money than we take in and expect a good result. I 
think most Americans believe that we in Washington are worse 
than a drunk sailor. A drunk sailor at least stops spending 
when he runs out of money. We just keep doing it and borrowing 
more.
    I want to return to a subject that our leader talked to you 
about, Senator Shelby, who is an expert on this issue and can 
explain it much better than I can, but that is the red snapper 
population in the gulf.

                        RED SNAPPER IN THE GULF

    You are a very skilled businessperson, and I hope you will 
bring some of those skills to NOAA. I do not mean any 
disrespect in what I am about to say. I am sure that there are 
many fine people at NOAA, but NOAA's management of the red 
snapper population has been an unmitigated disaster. They ought 
to hide their heads in a bag. It has been horrible.
    Our recreational fishermen have been totally screwed. They 
deserve a seat at the table. I hope you will consider allowing 
the States, the Gulf States, to have more involvement in the 
management of the red snapper population. And, frankly, I hope 
you will consider, in your request to try to make your 
department more efficient, for which I congratulate you 
sincerely, I hope you will consider allowing the Gulf States to 
manage the red snapper population. Because, frankly, there are 
some folks in Washington in charge of this program, they do not 
know a red snapper from a red-nosed reindeer.
    We have a problem. And I would like, at the appropriate 
time, to come by and see you and bring some of my people. Would 
you work with me on that?
    Secretary Ross. I surely will.
    We have already been working with the States, trying to 
work out a reallocation, because it does seem to me that just 3 
days as a fishing season for recreational does not really seem 
to be the most logical solution.
    As to the overall management of the fisheries, you are well 
aware of the provisions of the Magnuson Act, and we are 
obviously bound by those. And if memory serves, the members of 
those local fisheries are actually proposed by State government 
and ratified by us.
    So I think one way perhaps to deal with what you feel is 
the lopsidedness of the allocations between the commercial 
fisheries and the recreational fellows might be to try to 
change who gets put on the fishery panels, because they are the 
ones who really have the big power, as far as I can see.
    Senator Kennedy. Yes, and I think that is an excellent 
suggestion. I am thinking I would like to at least talk about 
helping you in your quest to make your department more 
efficient, and to prioritize your responsibilities, and 
respectfully suggest that you consider just turning over the 
management of red snapper to the Gulf States.

                             STEEL TARIFFS

    But before I run out of time, because I do want to respect 
my 5 minutes, are you going to impose tariffs on steel coming 
into the United States? And if you are, have you thought about 
the impact on our ports? I am sure you have.
    Secretary Ross. Sure. The report itself which is conducted 
under the authority of the Trade Expansion Act of 1962, as 
amended Section 232 investigation is, at this moment, a work in 
progress. So it will be completed very, very shortly.
    But the remedies that could be recommended--and if we do 
recommend remedies, will include a fairly wide range of 
alternatives. And then the question will be, what does the 
President do with whatever recommendation we make, because this 
is just a recommendation. This is not a final action.
    There are basically three kinds of actions that could be 
recommended, if one concluded that remedies were needed. The 
first would be, as you suggest, imposing tariffs at some sort 
of a level above and beyond the countervailing duty and 
antidumping ones that we already have. The second would be 
imposing quotas. Then the third would be a kind of hybrid, a 
so-called tariff-rate quota, where you would set the quotas 
based on the actual experience in recent years, and then 
provide that, in the event that there were imports of those 
particular products from those particular countries in excess 
of the quotas, then there would be an additional tariff 
imposed.
    That last one would be not very impactful on inflation, 
because it would essentially say we are protecting something 
like the original status quo and only imposing additional 
tariff burden in the event that the quotas are exceeded. Well, 
presumably, they are not going to go over the quota by 50 
percent over 100 percent, so the overall impact on inflation, 
were that to be the route, should be relatively modest.
    So we are very mindful of the need both to protect the 
domestic steel producers from inappropriate behavior on the 
part of foreign dumpers but also to protect this steel 
consumers, the steel fabricators, the auto companies, everybody 
else who uses steel.
    So in the event we come with a recommendation, it will be, 
one that reflects the balance of the needs of these various 
segments.
    But there is, I believe, a genuine national security issue 
that must be considered in this case because steel is used in 
over 10,000 different products that the military needs, and 
there is no steel mill in the country that can operate just on 
government business. There are very few steel mills that are 
able to produce the certain kinds of alloyed steels that are 
very important for armor plate and other very specialized 
applications, including the great big bomb that was used so 
successfully in Afghanistan.
    That bomb comes from the same plant that normally makes 
oilfield tubular goods. So while the bomb itself is not a huge 
item, it certainly proved its usefulness in Afghanistan.
    So it is a complicated issue. I am sure it is one to which 
the President will give very serious and very thoughtful 
consideration about all the implications of it, and we 
certainly will try to in the report we put out.
    Senator Kennedy. Thank you, Mr. Secretary. You are a smart 
guy, and I am glad you are with us. And thank you for your 
willingness to serve.
    Secretary Ross. Thank you, Senator Kennedy.
    Senator Shelby. The Senator from Maryland, Senator Van 
Hollen.
    Senator Van Hollen. Thank you.

                          ECONOMIC DEVELOPMENT

    I want to pick up on some of the questions asked by Senator 
Capito regarding the Economic Development Administration. She 
talked about West Virginia. I can tell you that this has been 
put to very good use with economic development in western 
Maryland, a very rural part of our State, the Eastern Shore, 
Baltimore City, in the rural areas building out broadband, 
trying to spur more manufacturing in those areas.
    And I would point out that, back in February, Ivanka Trump 
visited the Raymond V. Haysbert Sr. Center for Entrepreneurship 
in Baltimore City, organized by the Baltimore Urban League--I 
have been to this center--where she talked about the important 
work that was being done at that center to encourage more 
economic activity, in this case in the African-American 
community in Baltimore City.
    I think it is important to point out that that center was 
funded within the last few years by a $300,000 EDA grant. So I 
hope the administration will go back and consult with Ivanka 
Trump, who I believe recognized the merits of that important 
investment when she made that visit to the Baltimore center.
    There is also another cut, and I do want to get to your 
point about the fact that there is duplication in some of these 
programs. It would be one thing if the administration had come 
to Congress and said here is our plan for actually better 
organizing these activities and pooling those resources. But 
what it looks like in this budget, as Senator Capito said, is 
just cutting everywhere without any real plan of consolidation.
    She mentioned cuts to HUD. Another cut that was made to 
your own budget is the Minority Business Development Agency, 
which eliminated that program. Now maybe you are arguing that 
there is duplication with the Economic Development 
Administration. You also eliminate that program.
    I just do want to point out that, with respect to the 
Minority Business Development Agency, I just got a call from 
some people in Maryland just the other day, and I want to quote 
from the letter I received from an organization that is putting 
this to good use in the minority community.
    And I do want to point out that, on your website, the 
Department of Commerce website, you make the point that, if 
MBEs were to obtain entrepreneurial parity with other 
businesses, you would see 13 million more jobs created. In 
other words, you have about 29 percent of all firms in the 
United States are MBEs, but only 11 have paid employees, very 
small. So if we can grow these businesses, it benefits 
everybody, and that is the purpose of these grants.
    And I am just quoting from the Baltimore center, which 
says, ``Our officers awarded a new grant that focuses on an 
area the current administration has deemed a priority, advanced 
manufacturing. Our office has focused on the development of 
minority manufacturers and firms associated with advanced 
manufacturing. If MBDA is eliminated, this new innovative 
program will die.''
    I mean, that is their source of funding. It will go away.
    So I really ask you to go back and revisit this. You cited 
the GAO report, but as I say, as you look through this budget, 
there is no evidence--if you can point me to evidence where you 
actually consolidated these programs in a thoughtful way, I 
would be interested in knowing.
    Secretary Ross. Thank you for that question, Senator Van 
Hollen.
    The administration's approach to economic development, in 
general, is to try to boost the entire economy with regulatory 
reform, with energy unleashing, with trade reform, and with the 
tax cuts that have been proposed for businesses and people. Our 
feeling is that, if we can get the whole thing running better 
and have there be a better and stronger economy, all parties, 
whether minority or not, will benefit from that.
    So that is the overriding objective of the economic side of 
the budget. The infrastructure program, which was announced 
yesterday in some fair detail, is also one that will hopefully 
help many, many segments of the population, including the 
minority populations as well.
    So there are programs that are trying, at the macro level, 
to deal with the problems that result in the dislocations at 
the micro level, such as you addressed.
    Senator Van Hollen. Mr. Secretary, with all due respect, I 
think we all want to grow the economy. I think we all would 
like to grow it in a way with more shared prosperity. But my 
view is that cutting these programs actually undermines the 
goal you are talking about.
    Your original response to Senator Capito was that you were 
doing this because of duplication. I just ask you to point to 
any evidence where this administration has actually taken the 
time to go through and coordinate this rather than just using 
it as an excuse for a cut. But if you want to respond in 
writing, that would be helpful.
    Secretary Ross. Well, as I said to Senator Capito's 
question, I am proud of the investments that the EDA has made 
during its 52 years. I think they have been an effective 
program. But there is a limited amount of funding to go around, 
and one has to make unpleasant and difficult choices.
    This was one of the more unpleasant and difficult ones. But 
nonetheless, we have to make decisions, because there is a 
limited pie.
    Senator Van Hollen. That is true, Mr. Secretary. I would 
point out that the budget includes a very large tax cut that 
goes to mostly wealthy people, and I am not talking about the 
one coming down the line. I am talking about the repeal of the 
Affordable Care Act where people who make $1 million will get 
an average $50,000 tax cut.
    So you are looking at a budget where that is a tradeoff, a 
decision, that you have made. It is not one that I would make. 
But I am not sure what that says about the priority at the 
national level and the goal that you mentioned, which we all 
share, which is to grow the economy.
    Secretary Ross. Well, as you point out, Senator, it is a 
judgment call, and that was the judgment that we made.
    Senator Van Hollen. Thank you, Mr. Secretary.
    Senator Shelby. Thank you. The Senator from Arkansas.
    Senator Boozman. Thank you, Mr. Chair and ranking member, 
for holding this hearing.
    We appreciate you, Mr. Secretary, for coming over and 
appreciate your willingness to serve.
    I also apologize for running in and out. There is just lots 
going on today. That is just the situation that we have.

                          ECONOMIC DEVELOPMENT

    I do not want to belabor the point and do not really have a 
question regarding it, Mr. Secretary, but like so many others 
on the subcommittee, the Senator from Maryland, I would also 
have the same concerns, the Senator from West Virginia, so many 
on this subcommittee, about the Economic Development 
Administration.
    It has been a big help in Arkansas. I understand your 
point, and hopefully we can work together and get things worked 
out. But it really has played an important part in creating 
jobs. And that is really what it is all about, is jobs, jobs, 
jobs.

                               FIRST NET

    The question that I have, real quickly, has to do with 
broadband, which is so, so very important. I was really pleased 
to see the announcement of the agreement between FirstNet and 
AT&T regarding building out the wireless broadband network for 
first responders.
    I would like for you to talk a little bit about that, and 
maybe talk about some of the lessons and best practices that 
were learned throughout that process that can be translated 
toward more widespread broadband deployment in rural and 
underserved areas, maybe some of the specific barriers that we 
had, the hurdles that were overcome, and if you have any ideas 
as to how we can maybe take the knowledge that we learned from 
that, again, to try to get broadband in our rural areas, which 
is a real challenge.
    Secretary Ross. Well, it is a real challenge, so let me 
first address the FirstNet.
    I think the FirstNet deal with AT&T is a very good example 
of the kind of public-private partnership that hopefully will 
become more prevalent as we go forward, because what we were 
able to do was to leverage about $6 billion worth of spectrum 
that was going unused, contribute that into this venture with 
AT&T, and they will be putting out some $40 billion of actual 
real, hard cash. So that is a pretty good ratio of government 
contribution in-kind to private sector contribution in money 
and also in intellectual resources.
    So we are very proud of that. We believe that that activity 
will be a great help to America's first responders. We also 
think that in addition to protecting communities, it will 
directly create some 10,000 jobs, many in the most rural areas.
    So we are very proud of that. And as I said, we hope that 
it will be a model for other kinds of uses.
    And thanks to the successful spectrum auctions, FirstNet is 
now fully funded with the $7 billion that Congress authorized 
and is on a sound path to achieve its goal of deploying the 
nationwide public safety broadband network.
    As to the general question of broadband availability and 
adoption in the United States, NTIA is providing technical 
assistance through BroadbandUSA to help State and local 
governments, industry, and nonprofits.
    Currently, BroadbandUSA has provided support to more than 
720 communities through its regional events, workshops, 
educational webinars, with 140 communities and 36 States 
receiving direct, individualized assistance on both 
infrastructure and digital inclusion issues.
    The biggest hurdles facing communities with limited 
broadband access are planning and funding. In response, 
BroadbandUSA is beginning to develop publicly available online 
tools focused on broadband planning, cost-modeling, and mapping 
tools that enable communities to accelerate their broadband 
planning and shift limited public-private resources to 
implementation.
    Broadband USA is working hand-in-hand with hundreds of 
State, local, industry, and nonprofit broadband leaders to 
develop the connectivity assessment tool, an online planning 
tool designed to support communities as they convene, assess, 
and promote local broadband priorities. NTIA began beta testing 
this tool just in May of this year.
    Additionally, NTIA co-chairs the broadband interagency 
working group with the Rural Utility Service within the 
Department of Agriculture. This group continues to identify 
further actions agencies can take to remove barriers to 
broadband development and digital inclusion.
    The Department of Commerce remains committed to enabling 
Americans across the country to have access to affordable 
broadband.
    Senator Boozman. Thank you, Mr. Secretary.
    This is infrastructure week, and we cannot just think in 
terms of the 3Rs, the roads, railways, and runways. We have to 
think in terms of broadband.
    That is something the President has certainly expressed a 
lot of interest in. Congress is very supportive in a very 
bipartisan way.
    But I appreciate your knowledge and, again, hopefully you 
will be weighing in big time as we go forward to make sure that 
broadband is a big part of any infrastructure package.
    Thank you, Mr. Chairman.
    Senator Shelby. Thank you, Senator.
    I have one last question, Mr. Secretary.

                  NATIONAL WEATHER SERVICE OPERATIONS

    This subcommittee on appropriations here has consistently 
provided strong funding for National Weather Service operations 
and has provided basically more funding than requested each 
year by the executive branch to accommodate full staffing 
capacity. We think that is very important.
    We further directed NOAA in the 2017 omnibus to accelerate 
the staffing of the National Water Center to achieve full 
operating capability. However, despite this, I was dismayed by 
the recent GAO report that details the growing amount of job 
vacancies-- in other words, unfilled positions--at the National 
Weather Service and the government's inability to reduce this 
backlog at this time.
    My question to you, a couple of them, what responsibility 
does the Department of Commerce, and you as the Secretary, have 
in reducing this? In other words, to fill the void there. And 
what do you plan to do about it? And what hiring freezes, if 
any, is the department planning to implement currently as part 
of the 2018 budget request?
    We think that is important. We know that probably in a 
government agency, there are a lot of people that are 
overstaffed. But these are understaffed positions, very 
important ones, too.
    Mr. Secretary.
    Secretary Ross. Yes, Mr. Chairman.
    One of the problems that NOAA has been--their human 
relations element and their hiring procedures. As of April 
2017, NOAA estimated a backlog of 1,100 vacancies at NOAA.
    Although the Department's Enterprise Services, which I will 
discuss separately, has not started providing hiring support as 
part of Enterprise Services, although they will later on this 
summer, the Enterprise Services did arrange for Accenture, who 
is our contractor, to provide contracted service to support 400 
vacancies directly to NOAA to help get the hiring backlog down.
    With the Accenture hiring assistance from January through 
April, 271 NOAA vacancies have been posted, 151 selections have 
been made, and an additional 57 vacancies are in the process of 
being posted.
    The department began providing service to NOAA through its 
Enterprise Services effort earlier this year, and we have 
already begun to see some improvement in the backlog of human 
relations work that it built up, as you know, over many, many 
years.
    The Enterprise Services is something you will be hearing 
more about from us as time goes, but it basically involves 
centralizing the human relations functions, which particularly 
at NOAA, but also to some degree at other departments, were not 
functioning at optimal levels. We think and we hope that there 
will also be some cost savings as a result.
    But the main idea of it is to centralize, professionalize, 
and improve the hiring function. They have had positions that 
have been vacant for far too long simply because of the way 
that they were processing them. So that is under--the 
modification and remedy that is very much under way as we sit 
here.
    Senator Shelby. Mr. Secretary, would you work with us on 
the subcommittee to see that we fully staff the National Water 
Center, which is so important, I think, to allow the safety and 
could be a money-saving investment?
    Secretary Ross. We will be delighted to work with you, Mr. 
Chairman.
    Senator Shelby. Thank you.
    Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Secretary. I just have one 
more question.

                            COMMERCIAL TRADE

    When we met in my office yesterday, we talked about the 
importance of trade. I very much appreciate that this budget 
proposal includes an increase for trade enforcement, including 
for antidumping and countervailing duty cases. I think that 
American businesses, when they have a level playing field, can 
compete with any other business in the world, and I think those 
efforts to address dumping cases are very important.
    But I think that there is also another side to the coin of 
trade, and that is, how do we help our American companies get 
into foreign markets so that they can compete?
    In New Hampshire, 99 percent of our employers are small 
businesses, and small businesses often face a greater challenge 
getting into foreign markets. About 95 percent of the world's 
customers are outside the U.S., but only about 1 percent of our 
small- and medium-sized businesses are exporting their goods 
and services abroad.
    I was disappointed, as we discussed yesterday, to see that 
the budget request reduces funding for the Commercial Service. 
It proposes closing 35 Foreign Commercial Service posts and 10 
U.S. Export Assistance Centers. We have one of those Export 
Assistance Centers in New Hampshire, which is very important to 
the northern New England States.
    And I wonder how this budget envisions helping those small 
businesses to increase exports and get into those international 
markets, if we are rolling back on the export assistance that 
we provide.
    Secretary Ross. Well, several things. As you probably know, 
I am an ex officio board member at the Export-Import Bank, and 
I have been encouraging them to do much better outreach to 
small businesses, because a small business wanting to export, 
finds it often very difficult to deal with the foreign exchange 
issues, the letter of credit issues, and numerous other 
financial transaction topics. And I feel that while they have 
been doing some good work in that regard, I think there is 
quite a bit more that they could do. The same with OPIC, the 
Overseas Private Investment Corporation--they, too, could have 
much more of an outreach to smaller businesses, and to help 
them.
    Beyond that, we are not eliminating the Foreign Commercial 
Services, by any stretch of the imagination. The lists and the 
posts are still under review. There have been no final 
decisions made yet.
    The whole issue is simply affordability. It is not a 
question of lack of desirability, but there are a few of them 
that probably have not been up to par, so those will be easy. 
There may well be some that we would infinitely prefer not to 
have a close, but we have to get within the budget.
    So, again, tough budgets make tough decisions, and we are 
trying to do our best to do the least damage with the decisions 
that we are forced to make.
    Senator Shaheen. I appreciate that. I hope you will take 
into consideration small States like New Hampshire where the 
volume may not be as great as some of the other Export 
Assistance Centers, but where, because they do not have other 
resources, these centers are absolutely critical to businesses.
    And let me just say how pleased I am to hear you talk about 
the importance of EXIM Bank and OPIC.
    We have had, for far too long, a debate in this Congress 
that has held up the critical operations of EXIM Bank. I am 
pleased to hear that you think that we need to move on, making 
sure that they can provide assistance to businesses, because I 
have heard a lot of frustration in New Hampshire from companies 
that want to use EXIM. And because of where we are in terms of 
appointments to the board, they are not able to get the deals 
done that they would like to do.
    Let me just close with a final request. I know, again, when 
you and I were in my office, we talked about sugar 
negotiations. You talked about the importance of getting those 
done, and I agree that is a critical effort.
    I hope, as you work to finalize the agreement, that you 
will take into consideration not only the interest of the sugar 
producers, but also the interests of consumers and businesses 
that are going to be affected. According to 2012 Census data, 
in New Hampshire, we have about 1,500 jobs that could be 
threatened by this agreement. And we also know that consumers 
are going to pay an estimated $1 billion more per year in 
higher food prices.
    So I do hope, as you are finalizing these negotiations, 
that you will also consider consumers and businesses.
    Secretary Ross. Thank you for that question.
    We are, indeed. We have met with numerous consuming 
industry groups, with soft drink people, the food manufacturing 
people, and the confectioners. We have met with them all.
    We understand their points of view. But there is an 
unfortunate truism. Whenever you are solving a dumping problem, 
and that is basically what the sugar trade negotiation was, it 
does mean that there will be some small increase in cost, 
because nobody has a God-given right to buy dumped material 
that is coming into the country and appropriately. So there 
will be some small increase. But I do not think it is a very 
gigantic one. And many of the consuming industries were, 
frankly, much more worried that there would be an interdiction 
of their supply then whether it was a penny more are not. So we 
had to balance not only their needs, in general, but their 
needs for continuity of supply against the issue of price.
    Senator Shaheen. Thank you. I appreciate that. I think the 
dumping situation, as you point out, is a critical, one-time 
sort of issue. I hope that, as we go forward, you will look at 
the whole sugar program and see that there might be an 
opportunity for reform of that program that will make more 
sense to the balancing of interests of both consumers, 
businesses, and sugar producers. Thank you.
    Secretary Ross. The overall sugar program, as you know, is 
not in the domain of Commerce.
    Senator Shaheen. I understand.
    Secretary Ross. That belongs to the Department of 
Agriculture. Sonny Perdue was very active with me in providing 
technical help and advice as we went forward with the sugar 
negotiations. And I am sure he has learned even more about 
sugar as a result of this discussion. So I think you will find 
that it has a very well informed view on this one the sugar 
program comes back up.
    Senator Shaheen. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Senator Shelby. Mr. Secretary, the Senator from New 
Hampshire mentioned the Export-Import Bank. A lot of us have 
fundamental differences on that. The majority of the 
Republicans in the Senate voted not to reauthorize the Export-
Import Bank. I fought for years and have had hearings on the 
Banking Committee concerning where it should be reformed or 
simply abolished.
    I believe when you have one or two companies, big companies 
in America that can have their own bank, using it, is not for 
mostly small businesses and medium-sized businesses. Something 
is wrong there. I do not know if we will ever do it.
    Everybody, including this President, Republicans, talked 
about reforming if not abolishing the Export-Import Bank. 
Everybody here that I know about calls it corporate welfare, a 
subsidy. I hope, it is not this hearing today, that we can, if 
not abolish it, reform it and make it--it is not a perfect 
institution, by a longshot.
    I just wanted to set my views on that.

                     ADDITIONAL COMMITTEE QUESTIONS

    Thank you for appearing with us today. If there are no 
further questions, Senators, some of them were at other 
hearings today, may submit additional questions for the 
subcommittee's official hearing record, which is important, and 
we request the Department of Commerce's responses within 30 
days to these additional questions.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
                Questions Submitted to Hon. Wilbur Ross
            Questions Submitted by Senator Richard C. Shelby
                           weather satellites
    Question. The Department oversees two flagship weather satellite 
programs that are critical for forecasting hurricanes and severe 
weather outbreaks.
    While the Department's budget keeps the current flagship weather 
satellites on track for their respective launch dates, the budget 
request includes a significant cut--over 45 percent from the 2017 
enacted level--for follow-on polar satellites.
    The timely launch of Polar Follow-on satellites is required to 
ensure continuity of weather data that is critical to maintaining and 
improving weather forecasting.
    Mr. Secretary, how does the Department's 2018 request address the 
need for our Nation to continue obtaining polar satellite data beyond 
the current generation of polar orbiting satellites?
    Answer. The Department's fiscal year 2018 request prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
NOAA is working to improve its constellation strategy for polar weather 
satellite continuity while seeking cost efficiencies, managing system 
technical risks, and leveraging partnerships. The funding level 
identified in the Department's fiscal year 2018 request will allow NOAA 
to continue to develop the instruments for the Polar Follow On (PFO) 
missions in a manner that maintains the cost efficient synergies with 
JPSS-2, while conducting the overall re-plan of the PFO program.
    Question. Given the Department's proposed cut to the Polar Follow-
on program, and the length of time it takes for large government 
procurements, when can we expect a new program of record that outlines 
a budget profile, expected launch dates, and associated risks?
    Answer. The JPSS Program of Record (POR) is the original Joint 
Polar Satellite System (JPSS) program (encompassing SNPP, JPSS-1 and 
JPSS-2), which has an established budget profile and schedule that will 
not be affected by the PFO re-plan. NOAA is currently working on the 
new budget profile for the PFO program and anticipates that it would be 
made available to Congress with the release of the fiscal year 2019 
President's budget. The PFO re-plan will reflect the new expected 
outyear costs for the PFO/JPSS-3 and JPSS-4 missions for fiscal year 
2019 and beyond, based on the fiscal year 2018 President's budget 
request.
                 census: controlling 2020 census costs
    Question. This subcommittee has been consistently concerned with 
the ballooning costs of the Decennial Census, and has directed the 
Census Bureau to prioritize its spending towards activities that have 
the greatest potential to reduce overall cost.
    The Committee's goal for the past several years has been to attain 
an overall cost for conducting the 2020 Census at or below the cost of 
the 2010 Census.
    GAO recently added the 2020 Census to its list of high risk 
programs, and is clearly skeptical of 2020 Census cost estimates and 
the number of mostly untested approaches for carrying out the Census.
    How does the 2018 budget request keep the Department on track to 
ensure the total cost of the 2020 Census is at or below the cost of the 
2010 Census?
    Answer. As I indicated in prior testimony, the Department is 
currently reviewing the life cycle estimate for the 2020 Census. As 
part of this review, the Department is reassessing the fiscal year 2018 
estimate, in concert with the other fiscal years, to ensure it reflects 
what is needed to keep the program on track and continue innovation and 
change in core areas, which are also higher risk areas. Once the review 
is complete, I will report back to the Committee when I have a number 
that accurately estimates both the likely cost of the 2020 Census and a 
worst-case scenario and what that means for the Census Bureau's funding 
needs for the rest of the decade, including any potential changes to 
fiscal year 2018.
    Question. Are there changes to planned activities for the upcoming 
year that will affect current cost projections?
    Answer. In addition to the Department's review of the life cycle 
estimate mentioned above, the fiscal year 2018 budget prioritizes the 
2020 Census and the CEDCAP systems, which support the 2020 Census. The 
Department is committed to conducting a high quality Census that 
implements cost-saving innovations. fiscal year 2018 also prioritizes 
funding for the final major field test of core operations and systems, 
while continuing to build and secure the infrastructure--both field 
offices and IT--needed for the 2020 Census. Additionally, the fiscal 
year 2018 budget request includes funding for several ongoing 2020 
Census operations including geographic programs necessary to ensure the 
accuracy of the 2020 Census maps and address list, the redistricting 
data program, and the Local Update of Census Addresses.
                      census: counting operations
    Question. Mr. Secretary, when you and I met ahead of your 
confirmation, you shared with me--and with other senators--your 
concerns about the Census Bureau's operation.
    In particular, you expressed some apprehension that the Bureau 
might plan to statistically sample the U.S. population as part of the 
2020 Census instead of actually counting every individual where they 
live.
    The Supreme Court, in 1999, clearly identified the method of 
counting for the decennial as counting every individual, wherever they 
live in the country, without supplementing the count with sampling.
    Now that you are serving at the Commerce Department and have a 
better understanding of the Census Bureau's plans, do you believe that 
the Bureau intends to use statistical sampling methods to supplement 
the count of the 2020 Census?
    Answer. The Census Bureau has no plans to use statistical sampling 
methods to supplement the count of the 2020 Census.
                            noaa operations
    Question. Mr. Secretary, I was pleased to see that the 2018 budget 
request for NOAA includes $75 million for new vessel construction, 
which follows the subcommittee's direction and tempo for revitalizing 
the agency's aging fleet.
    Last fall, the subcommittee approved NOAA's updated Fleet 
Recapitalization Plan, which established a foundation for new vessel 
construction over the next 10 years.
    In addition to ships, NOAA also operates 9 aircraft--including the 
Hurricane Hunters--and several unmanned aerial vehicles that are 
critical for weather forecasting and research missions.
    In contrast to NOAA's marine operations, the Subcommittee has not 
received an Aircraft Recapitalization Plan that outlines the agency's 
current and future aviation needs.
    When can we expect to receive such a plan?
    Answer. We are currently working on the plan, and will submit it to 
Congress once it is complete.
                    department-wide shared services
    Question. Last year, the subcommittee approved the administration's 
request to transition to a ``Shared Services'' model to handle 
Department-wide operations, such as accounting and hiring across the 
Department's agencies.
    The Shared Services model should increase transparency and improve 
accounting for operations that are currently clouded by numerous 
funding transfers made by each agency to the Department's Working 
Capital Fund.
    Despite the advantages of a Shared Services model, its 
implementation has been slow and agencies within the Department have 
seen little benefit so far.
    Mr. Secretary, what is your impression of the Shared Services 
model, and what efficiencies would you like this transition to 
accomplish?
    Answer. The shared services model is widely accepted across the 
private and public sector as a way to decrease costs and increase 
customer service. More than 75 percent of Fortune 500 companies and 
countless national, State, and local governments across the globe use 
some sort of shared services delivery model to improve their 
performance, drive efficiencies, and cut costs.\1\ Additionally, a 
recent Partnership for Public Service survey of government 
professionals across multiple agencies showed that more than 90 percent 
saw cost reductions from the practice and 70 percent witnessed sharper 
service.\2\
---------------------------------------------------------------------------
    \1\ Building a Shared Services Marketplace (http://
ourpublicservice.org/publications/viewcontentdetails.php?id=470).
    \2\ Acquisition Shared Services: Progress, Lessons and 
Opportunities (https://ourpublicservice.org/publications/
download.php?id=755).
---------------------------------------------------------------------------
    Enterprise Services was launched in 2014 with the objectives of 
improving the quality of the mission-enabling services (i.e., human 
resources, information technology, financial management, and 
acquisition) that Commerce's Bureaus receive, enhancing the employees' 
overall experience, giving time back to employees so they may focus 
more on mission-related work, reducing ongoing operating costs, and 
avoiding future capital outlays for mission-enabling systems.
    Through the implementation of Enterprise Services, DOC will realize 
both direct cost savings and increased cost avoidance. Direct cost 
savings will be realized by the elimination of duplication of efforts, 
and increased cost avoidance will be realized due to economies of 
scale, scope, and geography. Enterprise Services intends to provide 
high quality, high-value service delivery to the DOC Bureaus. 
Enterprise Services was designed using a customer-centric model, with 
high quality as a core tenet in service delivery.
    Since its inception, Enterprise Services has begun to deliver HR 
and ACQ services (e.g., PAR Processing) via its HR vendor, Accenture 
Federal Services (AFS); migrated human capital providers to a unified 
human capital management platform; and expanded the Department's 
strategic sourcing program, resulting in cost avoidance of $36 million. 
In the coming months, Enterprise Services will provide continuous 
rollout of HR Services, assume responsibility for the provision of ACQ 
services across much of the department, and evaluate opportunities for 
increased scope and service delivery. Based on ES' financial analysis, 
the Department expects a 34 percent operating cost savings in fiscal 
year 2022 with the continuous rollout of new services.
    Question. Do you share the subcommittee's desire to bring greater 
transparency to accounting and spending of the Department's Working 
Capital Fund?
    Answer. Yes. The Shared Services model should continue to increase 
transparency and improve accounting for operations. The Working Capital 
Fund follows a governance policy where key changes and issues are 
presented to the Department's CFO Council and Departmental Management 
Council. The Chief Financial Officer/Assistant Secretary for 
Administration hosts monthly meetings with the Councils and 
communicates key Working Capital Fund requests, changes and issues with 
the representatives of each Departmental Bureau. We agree that 
transparency is an important factor in managing the Working Capital 
Fund and Shared Services Organization.
                  aquaculture & seafood trade deficit
    Question. During your confirmation hearing you expressed a desire 
to take advantage of our Nation's vast coastlines and resources to 
become self-sufficient in fishing and potentially a net exporter of 
seafood.
    Currently, the U.S. imports 90 percent of consumed seafood, and a 
vast amount comes from countries routinely engaged in unfair trade 
practices.
    I believe America is poised to be the leader in seafood production 
through greater access to wild fisheries and support for domestic 
aquaculture.
    Mr. Secretary, the Department's budget eliminates funding for 
aquaculture grants to overcome basic science barriers to increased 
domestic production; how does this request align with the Department's 
goal to lower the seafood trade deficit?
    Answer. The President's fiscal year 2018 budget prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
To meet these goals, NOAA made some difficult decisions to consolidate 
or eliminate programs, including extramural aquaculture research funded 
by Sea Grant. The Department of Commerce's fiscal year 2018 funding 
request for the National Marine Fisheries Service includes $6.3 million 
for Aquaculture, which will be used to continue work to advance the 
domestic marine aquaculture industry, create jobs, provide sustainable 
seafood, and reduce the U.S. seafood trade deficit.
    Question. Will the Department work to ensure our Nation has access 
to all available resources to lower our seafood trade deficit?
    Answer. The Department of Commerce will continue to explore the 
best opportunities to lower the U.S. seafood trade deficit and included 
funding in the President's fiscal year 2018 budget to address this 
goal.
                             cybersecurity
    Question. The recent ``Wanna Cry'' virus was a challenge for many 
foreign government agencies.
    I have heard that there are variants of the ``Wanna Cry'' virus 
that will now infect devices, which means IP-connected devices, or 
``endpoints,'' that are separate from desktops and laptops.
    I am concerned that the Department has a great deal of this 
equipment on its networks, especially those agencies--such as NOAA or 
the Census Bureau--that rely on connected equipment to conduct their 
operations.
    Did you find instances of ``Wanna Cry'' on Department of Commerce 
computers?
    Answer. No instances of Wanna Cry (or any variant) were found on 
Department of Commerce computers, nor were there any incident reports 
submitted for investigation of Wanna Cry related behavior.
    Question. If no, then, what do you think was key to the prevention 
of the attack from compromising Department computers?
    Answer. Commerce's robust vulnerability scanning and patch 
management processes serve as a critical line of defense against 
nefarious attacks and exploits. These processes are based on 
requirements conveyed in formal enterprise policies and supplemented by 
sub-organization level customizations. Based on Commerce's adherence to 
the Department Information Technology Security Program Policy (ITSPP) 
and Commerce Information Technology Requirements (CITRs), all 
identified vulnerabilities are patched within a defined timeframe, 
based on system impact rating. Since Wanna Cry leveraged a number of 
vulnerabilities that were addressed in Microsoft Security Bulletin 
MS17-010 in Mar-2017, a significant majority of Commerce assets were 
already patched and not vulnerable to the Wanna Cry attack when it 
surfaced in May-2017. The Department's investments in cybersecurity 
policy, cybersecurity compliance, Enterprise Cybersecurity Monitoring 
and Operations (ECMO), and the Enterprise Security Operations Center 
(ESOC) were the keys in the prevention of the attack from compromising 
Department computers. While these investments are sufficient for the 
current threats facing the Department, cybersecurity threats are 
constantly evolving and additional appropriated funding for these 
programs would significantly bolster the Department's cybersecurity 
defenses against future threats.
    Question. Do you have a way of inventorying all this connected 
equipment and to profile it to see whether it has been compromised?
    Answer. Commerce maintains an Enterprise Cybersecurity Monitoring 
and Operations program that addresses asset and patch management to 
efficiently identify applicable vulnerabilities on systems, per Office 
of Management and Budget (OMB) memoranda M-10-15 and M-11-29. Commerce 
also maintains an Enterprise Security Operations Center (ESOC) to 
provide timely detection and rapid response to security incidents, per 
OMB M-16-04. These capabilities allow Commerce not only identify 
present vulnerabilities, but also to detect behavior that would 
indicate attack and/or compromise.
    Question. If no, then, isn't detecting and profiling connected 
devices one of the key Continuous Diagnostics and Mitigation 
requirements? Will DOC meet those requirements?
    Answer. Commerce has already implemented these capabilities, but 
intends to leverage the services provided by Continuous Diagnostics and 
Mitigation (CDM) to enhance the protection, detection, and response 
capabilities of the Department.
                                 ______
                                 
             Questions Submitted by Senator Jeanne Shaheen
    Question 1. The four broad innovation areas that the Census Bureau 
believes will drive significant cost savings in 2020--(1) the Internet, 
(2) new approaches to building the address list, (3) re-engineered data 
collection methods, and (4) administrative records--have not been used 
in prior decennials and will require significant testing to ensure they 
will function as planned. However, the Bureau cancelled a field test 
that was scheduled for 2017, and has de-scoped the 2018 End-to-End test 
among other actions moving from 3 test sites to only one. What steps is 
the Department of Commerce taking to ensure these innovations will work 
under operational conditions come Census Day?
    Answer. For the 2018 End-to-End Census Test, the final major field 
test before the 2020 Census, the Census Bureau has made decisions that 
will prioritize the readiness and testing of its integrated system-of-
systems in the field in a Census-like environment. The lessons learned 
from how these systems interact with each other, with the operations 
being tested, and, where relevant, with the field staff and residents 
in the test sites, will be invaluable to finalizing the operational 
plan and putting the finishing refinements on the systems and 
operations in advance of the 2020 Census.
    The 2018 End-to-End Census Test began in August 2017 with the 
address canvassing operation. The plan for the address canvassing 
portion of the 2018 End-to-End Census Test includes three sites: 
Bluefield-Beckley-Oak Hill, West Virginia; Providence County, Rhode 
Island; and Pierce-County Washington. Collectively these three diverse 
sites already is helping the Census Bureau gain invaluable experience 
in conducting the challenging process of building the address list in 
2019 across a wide area of physical geography, housing structures, and 
residence types.
    Following the conclusion of address canvassing operations in early 
October 2017, the Census Bureau plans to proceed with the remaining 
operations in scope for the 2018 End-to-End Census Test in Providence 
County, Rhode Island. Peak operations will commence in March 2018.
    Providence County is an ideal microcosm of the 2020 Census 
experience, as its demographics mirror those of the Nation. As such, 
the Census Bureau remains confident that the 2018 End-to-End Census 
Test is sufficiently robust to test all of the systems and operations 
that must be assessed.
    Question 2a. GAO testified in May 2017 that the 2020 Census life-
cycle cost estimate is unreliable and that costs are already increasing 
above the original estimate. What steps is the Department of Commerce 
taking to address GAO's recommendations and develop a more reliable 
cost estimate? What steps will Commerce take to control costs going 
forward?
    Answer. In its 2016 audit, GAO recognized that the Census Bureau 
has taken significant steps to improve its cost estimation approach. 
GAO also found a number of recommendations for further improvements, 
which the Census Bureau agreed to in a comprehensive formal action plan 
and have since implemented. These included ensuring that the cost 
estimates are comprehensive, well documented, accurate, and credible; 
establishing clear guidance and traceable procedures for changing 
assumptions; and improving control over how risk and uncertainty are 
accurately incorporated into the lifecycle cost estimate.
    As I indicated in prior testimony, the Department is currently 
reviewing the life cycle estimate for the 2020 Census. This review is a 
necessary part of developing a credible estimate and improving on past 
practices, as well as it moves the Census Bureau forward in addressing 
GAO's recommendations. Once the Department's review of the life cycle 
estimate is complete, I will report back to the Committee when I have a 
number that accurately estimates both the likely cost of the 2020 
Census and a worst-case scenario and what that means for the Census 
Bureau's funding needs for the rest of the decade.
    Question 2b. What steps will Commerce take to control costs going 
forward?
    Answer. As the final years of the decade approach, monitoring and 
mitigating risks at the Census Bureau is among the most important 
things being done to ensure the Census Bureau can execute its plan for 
a fair and accurate 2020 Census.
    In recognition of the complexity, scale and importance of 
conducting a fair and accurate count of the Nation each decade, GAO 
added the 2020 Census to its high risk list. The GAO included Census 
2000 and the 2010 Census on its list as well.
    Actions underway to address risks in the program include:
  --Karen Dunn Kelley has been confirmed as the Under Secretary for 
        Economic Affairs. The Department appreciates Congress' support 
        in her confirmation.
  --Department and OMB officials are carefully reviewing the program 
        and implementing an oversight plan designed to recognize and 
        manage risks.
  --Census Bureau leaders have governance structures in place that 
        include the weekly 2020 Executive Steering Committee and the 
        2020 Systems and Alignment meetings, which facilitates Census 
        Bureau leadership engaging in regular risk mitigation.
  --The Census Bureau and the Department are analyzing the root causes 
        of the issues encountered, developing action plans to address 
        these and measuring progress.
  --The Census Bureau is actively working to address and close 
        recommendations from GAO and the Department's Office of 
        Inspector General.
  --The Census Bureau monitors risks internally and welcomes 
        stakeholders into the process. Specifically, the Census Bureau:
    --Holds quarterly Program Management Reviews that are open to the 
            public.
    --Has documented largest decisions in the 2020 Census Decision 
            Memorandum Series.
    --Lists all decisions that have been made so far, along with the 
            timeline for making those that remain in the 2020 Census 
            Operational Plan, last updated in October 2016.
    --Shares the 2020 Census Integrated Master Schedule with GAO on a 
            monthly basis.
    Another related and equally important component to success is 
collaboration with the Congress and at GAO to continually review and 
assess our designs, plans, systems, and operations to identify areas of 
improvement.
    Question 3a. GAO added the 2020 Census to its high-risk list 
because key innovations areas, IT systems, and cost estimation efforts 
are all facing challenges. Do you see additional risks going forward 
and if so, what steps are being taken to mitigate them? Is more 
attention needed to the Census Bureau's overall enterprise risk 
management efforts?
    Answer. As the final years of the decade approach, constantly 
monitoring and rigorously mitigating risks at the Census Bureau is 
among the most important things being done to ensure the Census Bureau 
can execute its plan for a fair and accurate 2020 Census.
    In recognition of the complexity, scale and importance of 
conducting a fair and accurate count of the Nation each decade, GAO 
added the 2020 Census to its high risk list. The GAO included Census 
2000 and the 2010 Census on its list as well.
    Plans to address risks in the program includes:
  --Karen Dunn Kelley has been confirmed as the Under Secretary for 
        Economic Affairs. The Department appreciates Congress' support 
        in her confirmation.
  --Department and OMB officials are carefully reviewing the program 
        and implementing an oversight plan designed to recognize and 
        manage risks.
  --Census Bureau leaders have governance structures in place that 
        include the weekly 2020 Executive Steering Committee and the 
        2020 Systems and Alignment meetings, which facilitates Census 
        Bureau leadership engaging in regular risk mitigation.
  --The Census Bureau and the Department are analyzing the root causes 
        of the issues encountered, developing action plans to address 
        these and measuring progress.
  --The Census Bureau is actively working to address and close 
        recommendations from GAO and the Department's Office of 
        Inspector General.
  --The Census Bureau monitors risks internally and welcomes 
        stakeholders into the process. Specifically, the Census Bureau:
    --Holds quarterly Program Management Reviews that are open to the 
            public.
    --Has documented largest decisions in the 2020 Census Decision 
            Memorandum Series.
    --Lists all decisions that have been made so far, along with the 
            timeline for making those that remain in the 2020 Census 
            Operational Plan, last updated in October 2016.
    --Shares the 2020 Census Integrated Master Schedule with GAO on a 
            monthly basis.
    Another related and equally important component to success is 
collaboration with the Congress and at GAO to continually review and 
assess our designs, plans, systems, and operations to identify areas of 
improvement.
    Question 3b. Is more attention needed to the Census Bureau's 
overall enterprise risk management efforts?
    Answer. The Department and the Census Bureau have a formal and 
rigorous risk management process in place at the program and project 
levels, which takes into account budget, schedule, technical, and 
external factors that may impact the Census Bureau and the 2020 Census. 
The Census Bureau Enterprise Risk Management (ERM) framework is a 
tiered framework with risks managed at the project, program, and 
enterprise levels. Formalized risk review boards are in place and 
functioning at all levels of the organization to ensure that risks are 
managed at the appropriate level. Risks are proposed and accepted by 
the risk review board, documented in the risk register, owners are 
assigned, mitigation plans are developed and executed. These plans 
outline strategies for reducing the likelihood of delays, design 
changes, and major budget shortfalls. Where risk exposure is high, 
contingency plans are developed so we can recover quickly should a risk 
be realized or implement an alternative approach. Risk status and 
mitigation plan progress is monitored on a regular basis. This process 
ensures robust management attention to, and mitigation of, program 
risks.
    Review of risks is also integral to developing a credible cost 
estimate. As I indicated in prior testimony, the Department is 
currently reviewing the life cycle estimate for the 2020 Census. This 
review takes into account risks that are associated with the 2020 
Census in order to estimate the worst case scenario and an appropriate 
level of contingency needed to recover quickly from a realized risk.
    Question 4. The Census Bureau will soon be without a permanent 
Director and Deputy Director at a time when the End-to-End test is 
about to begin, costs are increasing, and key budgetary and operational 
decisions need to get made. What steps is Commerce taking to ensure 
there is adequate and sustained leadership, oversight, and 
accountability at the Bureau to address its many management challenges 
and keep the agency on-track?
    Answer. Karen Dunn Kelly has been confirmed as the Undersecretary 
for Economic Affairs. The Census Bureau Director reports to her. 
Regarding the Census Bureau Director, I appreciate John Thompson's 
service to the Nation as Census Bureau Director. A search is underway 
for a replacement, and for a permanent replacement for the Census 
Bureau's Deputy Director. Until permanent successors are appointed or 
confirmed, I have announced the interim leadership of the U.S. Census 
Bureau under the Vacancies Reform Act. Ron Jarmin will perform the non-
exclusive functions and duties of the Director, and Enrique Lamas will 
perform the non-exclusive functions and duties of the Deputy Director 
of the Census.
    Ron Jarmin currently serves as the Associate Director for Economic 
Programs at the U.S. Census Bureau, leading the team for the 2017 
Economic Census, which provides the foundation for other key measures 
of economic performance including the Nation's Gross Domestic Product. 
Starting his Census Bureau tenure in 1992, Mr. Jarmin has also 
performed the roles of Assistant Director for Research and Methodology, 
Chief Economist, and Chief of the Center for Economic Studies.
    Enrique Lamas currently serves as the Associate Director for 
Demographic Programs, overseeing the Demographic Programs Directorate 
which provides accurate information on the size, distribution, and 
characteristics of the Nation's population. Beginning his career in 
1980 in the Census' Population Division, Mr. Lamas previously served as 
Chief of the Population Division, Assistant Division Chief in the 
Demographic Surveys Division, Chief of the Poverty and Wealth 
Statistics Branch, and Chief of the Labor Force and Transfer Programs 
Statistics Branch.
    Additionally, the 2020 Census program has stable and permanent 
leadership in place, with Lisa Blumerman serving as Associate Director 
for Decennial Census Programs, and Deborah Stempowski serving as Chief 
of the Decennial Census Management Division.
    Question 5. In 2013 the Census Bureau completed an enterprise-wide 
competency assessment and identified several mission-critical gaps in 
such technical areas as IT, program and project management, and 
budgeting. At the same time, a large number of Bureau employees may 
become eligible for retirement in the years ahead. From the perspective 
of your business background, what steps should the Bureau be taking to 
ensure effective succession planning throughout the agency, 
particularly in its mission critical occupations, and that it has the 
capacity to carry out its mission in the years ahead?
    Answer. In order to ensure effective succession and workforce 
planning throughout the Bureau, the Census Bureau is doing a number of 
activities:
  --After the 2013 enterprise-wide competency assessment, in June 2015, 
        the Census Bureau established a permanent Office within the 
        Human Resources Division that is dedicated to workforce 
        analysis and succession planning. The purpose of this office is 
        to build strategic workforce planning capabilities across the 
        organization to ensure that the workforce is aligned to the 
        strategic intent of the Bureau.
  --The Census Bureau is examining the changing work at the Bureau and 
        identifying the right skills and competency mixes needed for 
        the future.
  --The Census Bureau is examining several mission critical occupations 
        in the Human Resources Division and the Information Technology 
        and Economic Directorates to assess the changing work 
        requirements and are determining which competencies and skills 
        are needed in the immediate and longer-term perspectives and 
        which are at risk of leaving through attrition.
  --Within our leadership workforce, the Census Bureau identified and 
        created a Census-based leadership competency model that 
        identifies the most important competencies needed to be a 
        successful leader at the Bureau. In addition, to plan for 
        immediate succession risk, the Census Bureau identified 16 at-
        risk, executive-level leadership positions and created 
        strategic transition plans that identified the top priorities, 
        initiatives, and decision points required to enable a smooth 
        transition with a successor should that executive retire.
    Question 6. As GAO has reported, the ongoing IT development 
schedule for the 2018 End-to-End Census Test (a key operational test) 
appears aggressive. What assurance do you have that the IT systems will 
be developed, tested, and secure in time for the 2018 test and 2020 
operations?
    Answer. The Census Bureau learned many lessons in systems 
development and readiness from the 2010 Census. Foremost among these 
was to develop and field test proof of concept systems, which the 
Bureau did for the 2020 Census from 2012 through 2015.
    Building off the lessons learned from these tests, the Census 
Bureau is now far along in the process to develop and integrate 
approximately 50 different IT systems to handle the many preparatory, 
support, collection, processing, and tabulation operations for a 
Census. These include the systems used to update and maintain our 
Master Address File and digital map to ensure Census results are 
assigned to the correct jurisdictions; enable people to respond via the 
Internet; identify the households that have not responded to the 
Census, and define and manage the in-person visits assigned to each 
interviewer on a daily basis; capture, process, and tabulate the data 
we receive from people whether they respond online, over the telephone, 
by mailing back a paper questionnaire, or through an in-person 
interview via an enumerator's mobile device. Many of these systems--
like background checks, payroll, and questionnaire design--are legacy 
systems already in place, while some others are being developed and 
tested for the first time, and have been top priorities in recent 
fiscal years. The Census Bureau is able to focus resources on the newly 
developed systems to ensure they are developed, tested, integrated, and 
secured ahead of the 2020 Census.
    The Census Bureau is well on its way to systems readiness for the 
2018 End-to-End Census Test. The successful deployment of the public-
facing self-response systems this spring in the 2017 Census Test was an 
important milestone in the Census Bureau's systems readiness. In this 
test, the Census Bureau successfully implemented Internet Self-Response 
and Real-Time Non-ID Processing in a cloud environment, the Operational 
Control System, and Census Questionnaire Assistance with live agents at 
two call centers assisting respondents in multiple languages. The 
Bureau learned lessons in the test that will serve to improve the 
Internet Self-Response system, Forms Printing operation, and the 
processes by which they capture data submitted on paper forms. The 
Census Bureau is making these and other refinements now based on the 
lessons we learned in that test, so all of the systems are refined 
ahead of the 2018 End-to-End Census Test.
    As we approach the 2018 End-to-End Census Test, the Census Bureau 
is rigorously tracking the status of the systems each with its own 
well-defined scope, requirements, schedule, and costs, and run by an 
experienced project manager who reports regularly on progress and any 
risk to timely delivery. The Census Bureau also is implementing 
enhanced security architecture and technology based on the Department 
of Homeland Security Continuous Diagnostic and Mitigation program to 
protect the confidentiality, integrity, and availability of the 2020 
Census data, processes, and systems. This includes securing internal 
Census Bureau systems, securing field data collection on mobile devices 
and on the mobile network, securing the self-response mode for paper 
with physical and technical security at processing sites and systems, 
and securing self-response modes for public-facing Internet data 
collection (using Cloud-based security and performance) and Census 
Questionnaire Assistance.
    The Census Bureau also have a robust governance process with three 
governing bodies that work together to ensure that all contracts meet 
business requirements on time. Additionally, during this past year they 
have brought in expert help from a team of private sector IT experts to 
aid with the integration of the systems. Having fully integrated 
systems ahead of the 2018 End-to-End Census Test is key to 2020 Census 
systems readiness.
    Now with the in-field address canvassing operation for the 2018 
End-to-End Census Test having started in August 2017, these rigorous 
processes are paying off as all of the systems for this portion of the 
test are ready and undergoing final integration testing before going 
live. The Census Bureau will continue these processes as it prepares to 
ready the systems needed for the remaining peak operations of the 2018 
End-to-End Census Test by spring of 2018.
    Question 7a. GAO recently reported on the significant information 
security challenges that the Bureau faces in the 2020 Census. With the 
change to a more Internet-focused response to the 2020 Census, what do 
you see as the biggest risks and challenges to securing the personally 
identifiable information of American households? In addition, how 
confident are you in the Census Bureau's ability to handle potential 
computer security or data breach incidents?
    Answer. The Census Bureau takes the cyber-security posture of the 
2020 Census very seriously and is taking steps to address these 
concerns. The Census Bureau is not going about this on its own. It is 
working closely with DHS to review technology architecture, perform 
penetration testing to ensure the website is safe and secure, and 
utilize its set of Federal cyber-security services effectively in the 
cloud.
    The main cybersecurity areas the Census Bureau is focusing on are 
cybersecurity threats associated with (1) data breaches, (2) 
compromising user devices, (3) disrupting the Internet Self Response 
website, which are within the Census Bureau's direct control 
(Perimeter/Internal). The Bureau is also focusing on threats including 
(4) compromising external network access and (5) impersonating the U.S. 
Census Bureau which are outside of the Census Bureau's direct control.
    Question 7b. In addition, how confident are you in the Census 
Bureau's ability to handle potential computer security or data breach 
incidents?
    Answer. Cyber threats may be external, on the perimeter, and/or 
internal to the Census Bureau's systems. The Census does not have 
direct control of mitigations for threats external to the Census 
Bureau's systems. The Bureau can detect some of these threats but will 
rely on and partner with industry and other Federal agencies which are 
tasked with and have authority to take actions to resolve external 
threats. Examples of external threats include impersonating the Census, 
inserting invalid responses, compromising external network access and 
compromising user devices (public).
    For the threats in the perimeter and/or internal to the Census 
Bureau's systems, such as data breaches, compromising user devices 
(Census) and disrupting the Internet Self Response website, the Census 
has the ability to take direct actions to prevent and resolve these 
threats. The Census Bureau has intentionally designed systems with many 
layers and levels of isolation to apply the right balance of security 
and performance at each isolated area without sacrificing the overall 
security of capability.
    This approach will create a ``funnel effect'' where the Census 
Bureau will be able use very high levels of security early on in 
publicly facing systems like Internet Self Response, which will allow 
the Census Bureau to remove bad actors early on in the process without 
affecting the respondents' ability to move through the system and fill 
out their surveys. It will give us the best opportunity to prevent, 
detect, respond and recover from possible cyber threats.
    The Census Bureau is engaging with other Federal agencies, most 
prominently Department of Homeland Security to provide assistance in 
reviewing the design and security architecture for the 2020 Census. In 
addition, the Census Bureau works closely with the Department of 
Commerce Office of Security for assistance in threat analysis and 
related counter-terrorism assistance and also with the National 
Institute of Standards and Technology (NIST) to investigate IT 
solutions, such as cloud-computing architectures. The Census also works 
with the Information Technology Laboratory at NIST in a number of 
security initiatives. The Census Bureau has developed and implemented a 
Risk Management Framework in close collaboration with Dr. Ron Ross of 
NIST and has also worked with NIST on the Derived Credential 
initiative, which will allow Census to use Homeland Security 
Presidential Directive 12 required authentication for our general field 
force.
    The Census Bureau continues to reach out to other Federal agencies, 
including the FBI and NSA to see what can be gained from their 
experience and knowledge of the threat environment.
    Question 8a. What will the complete lifecycle cost be for the 2020 
Census? What portion of that cost is related to IT?
    Answer. As I indicated in prior testimony, the Department is 
currently reviewing the life cycle estimate for the 2020 Census. I will 
report back to the Committee when I have a number that accurately 
estimates both the likely cost of the 2020 Census and a worst-case 
scenario and what that means for the Census Bureau's funding needs for 
the rest of the decade.
    Question 8b. What portion of that cost is related to IT?
    Answer. Once the Department's review of the life cycle estimate is 
complete, I will be able to provide information on the IT costs 
included in that estimate.
    In regards to fiscal year 2018, the budget request prioritizes the 
2020 Census and the CEDCAP systems, which support the 2020 Census. The 
Department is committed to conducting a high quality Census that 
implements cost-saving innovations. The fiscal year 2018 budget request 
also prioritizes funding for the final major field test of core 
operations and systems, while continuing to build and secure the 
infrastructure--both field offices and IT--needed for the 2020 Census. 
Additionally, the fiscal year 2018 budget request includes funding for 
several ongoing 2020 Census operations including geographic programs 
necessary to ensure the accuracy of the 2020 Census maps and address 
list, the redistricting data program, and the Local Update of Census 
Addresses.
    Question 9. GAO has reported that the Bureau has not yet determined 
all of the systems that will be used in 2020 operations. When is the 
Census Bureau going to finalize decisions for key operations (e.g., 
coverage measurement) and IT systems (e.g., Internet self-response) to 
be used in the 2020 Census?
    Answer. The Census Bureau has clearly laid out the decisions for 
each operation comprising the 2020 Census in the 2020 Census 
Operational Plan. These include decisions that are related to IT 
systems and those that are not. The Operational Plan has shown all 
decisions that we had already made at the time of the most recent 
update in October 2016, identified the questions that still remained to 
be answered, and set a schedule for answering those questions and 
making those decisions.
    To date, the Census Bureau has remained on schedule for making all 
of its decisions, and as of July 2017 has made 276 out of 350 
decisions. The remaining decisions require input from the 2018 End-to-
End Census Test or pertain to late operations such as archiving, data 
products, and evaluations. All but three of the outstanding decisions 
are scheduled to be made by the end of 2018. The Census Bureau will 
continue to be open with its decisionmaking process and timeline, and 
will release an updated 2020 Census Operational Plan in the fall of 
2017.
    In determining the systems that will be used for the 2020 Census, 
the Census Bureau has already defined the systems needed for every 
defined 2020 Census Operation. If the 2020 Census requires additional 
operations, then additional systems may be defined. The Census Bureau 
is far along in the process to develop and integrate this system of 
systems to handle the many preparatory, support, collection, 
processing, and tabulation operations for a Census. While some of these 
systems are being developed for the first time, a great number are 
legacy systems--like background checks, payroll, and questionnaire 
design--that are already in place and will require little configuration 
to ready and make interoperable with one another. The Census Bureau is 
able to focus resources on the newly developed systems to ensure they 
are developed, tested, integrated, and secured ahead of the 2020 
Census.
    Question 10a. The Pacific Coastal Salmon Recovery Fund (PCSRF) 
supports activities related to the recovery of listed stocks of Pacific 
salmon, an iconic symbol of economic and ecological health for 
Washington State and the entire Pacific Northwest. Washington State has 
more listed species, more river miles, and more of its population 
impacted by species decline than any other State. Throughout 
Washington, cities, counties, Tribes, and the State work cooperatively 
to create recovery plans and implement projects related to salmon 
recovery. Federal funds have been matched by millions in State and 
local dollars to implement these projects and the States of Washington, 
Oregon, Idaho, California, Nevada, and Alaska each contribute 
substantial resources to protect salmon and count on a robust Federal 
partnership. PCSRF has a proven success record, restoring more than 1 
million acres of fish habitat and opening more than 9,100 miles of 
streams for fish passage.
    Secretary Ross, Senator Murray tells me that your Department has 
declared six fisheries disasters in Washington State. Are you aware of 
these? Did you consider the impacts of eliminating PCSRF on these 
ongoing disasters? Further, did you analyze the economic and health 
impacts of eliminating funding for PCSRF or take steps to ensure these 
actions would not impact Tribal treaty obligations?
    Answer. Yes. In January 2017, then-Secretary of Commerce Pritzker 
declared fishery resource disasters for nine salmon and crab fisheries.
    Question 10b. Did you consider the impacts of eliminating PCSRF on 
these ongoing disasters?
    Answer. The President's fiscal year 2018 budget prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
To meet these goals, NOAA made some difficult decisions to eliminate 
programs, including the Pacific Coastal Salmon Recovery Fund. NOAA 
recognizes the significant ecological, economic, and cultural 
importance of Pacific salmon and requests sustained funding across 
other programs (such as NMFS' Pacific Salmon and Salmon Management 
lines) to continue to support conservation and recovery and fulfill our 
statutory mandates for these species.
    Question 10c. Further, did you analyze the economic and health 
impacts of eliminating funding for PCSRF or take steps to ensure these 
actions would not impact Tribal treaty obligations?
    Answer. The unique relationship between the Federal and Tribal 
governments is based on the U. S. Constitution, congressional 
legislation, treaties, executive orders, and judicial decisions that 
recognize reserved rights of Native Americans to protect their property 
and their way of life. Tribes are co-managers of the fishery resource 
in partnership with the States and Federal Government. As noted above, 
while the fiscal year 2018 President's budget made difficult decisions 
to eliminate some programs, NOAA will continue its Federal commitment 
to advancing Pacific salmon and steelhead conservation and recovery, 
and Tribal treaty fishing rights through sustained Pacific salmon 
related programs in the President's fiscal year 2018 budget.
                                 ______
                                 
             Questions Submitted by Senator Lisa Murkowski
    Question 1a. Mr. Ross, it was a pleasure to sit down with you in my 
office earlier this year and give you what I like to call, the ``fish 
talk.'' I have had a pleasure working with you and your staff on issues 
that have come up since.
    I applaud your statements supporting the United States becoming a 
``net exporter'' of seafood and your desire to ``close the seafood 
trade deficit.'' However, I implore you to consider the realities of 
seafood trade and how our domestic companies need the U.S. to negotiate 
better deals to reduce tariffs that other countries apply to the U.S., 
like how tariff rates for U.S. exports are higher than tariff rates for 
other countries, or how Russia imports massive amounts of seafood into 
our country like King Crab, yet Russia maintains its import ban on 
American seafood.
    The Department of Commerce's International Trade Administration 
needs to focus on these trade barriers and work with the USTR to make 
positive change happen. Can you assure me that you will work within 
your Department and with USTR to fix things like the Russian seafood 
import ban and tariff issues?
    Answer. ITA works with many sectors within the processed food and 
beverage industry on trade barriers, including standards, tariffs, 
labeling, inspection and documentation requirements, ingredient 
labeling, and others. Although the Department of Agriculture's Foreign 
Agriculture Service has worked specifically on Russia's seafood import 
ban, our Industry and Analysis unit, along with our Commercial Service 
offices in Anchorage, AK and Moscow, are also available to join with 
FAS and other agencies to work directly with you and Alaska's crab 
industry to address Russia's import ban and can work to address other 
export barriers throughout the world. Through the Trade Promotion 
Coordinating Committee we will ensure this issue is raised with both 
USTR and the Foreign Agricultural Service.
    Question 1b. The proposed budget includes significant cuts to the 
International Trade Administration?
    Answer. The administration's 2018 budget prioritizes rebuilding the 
military and making critical investments in the Nation's security. It 
also identifies the savings and efficiencies needed to keep the Nation 
on a responsible fiscal path. Many difficult decisions and tradeoffs 
were necessary to reach the funding level provided in this budget. The 
President's budget aims to change the role and size of the Federal 
Government by prioritizing programs that serve the most critical 
functions and consolidating or eliminating duplicative or less critical 
programs. The administration's approach is to boost the entire economy 
through regulatory reform, unleashing energy resources, trade reform 
and tax cuts for businesses and individuals. The President's budget 
needed to make difficult choices among competing funding priorities, to 
expand resources to ensure job growth and the enforcement of laws 
promoting fair trade. The budget for ITA strengthens trade law 
enforcement functions to ensure American businesses get fair 
opportunities in the global marketplace. Funding increases will help 
ITA build capacity to self-initiate antidumping duty (AD) and 
countervailing duty (CVD) investigations, as well as strengthen all AD 
and CVD investigations. While lower-priority activities are reduced, 
the Department will nevertheless continue to work to ensure the 
execution of a robust program of programs and activities that grow U.S. 
exports.
    Question 1c. The United States has some of the world's most 
sustainable and productive wild fisheries, but this alone will not 
close our trade deficit. The proposed NOAA budget proposes to defund 
several aquaculture and seafood marketing programs. Could you please 
explain how the Nation will achieve this goal without these programs?
    Answer. The President's fiscal year 2018 Budget prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
To meet these goals, NOAA made some difficult decisions to consolidate 
or eliminate programs, including extramural aquaculture research funded 
by Sea Grant. The Department of Commerce's fiscal year 2018 funding 
request for the National Marine Fisheries Service includes $6.3 million 
for Aquaculture, which will be used to continue work to advance the 
domestic marine aquaculture industry, create jobs, provide sustainable 
seafood, and reduce the U.S. seafood trade deficit.
    Question 2. Mr. Secretary, are you aware that your colleagues, 
Secretary Kelly of DHS and Secretary Acosta of Labor, are maintaining a 
huge barrier to U.S. seafood production by not allowing more H-2B 
workers to be hired? If swift action is not taken, the seafood industry 
may not get to the necessary staffing levels and major economic damage 
will be done to the processing companies and the thousands of 
independent fishermen that represent thousands of small businesses 
across all of Alaska and the Pacific Northwest. These economic effects 
ripple throughout our communities. Can I count on you to encourage your 
colleagues in this administration to act quickly for the sake of our 
seafood industry?
    Answer. The Department of Commerce will continue to explore the 
best opportunities to lower the U.S. seafood trade deficit and included 
funding in the President's fiscal year 2018 budget to address this 
goal. The Department of Commerce's fiscal year 2018 funding request for 
the National Marine Fisheries Service includes $6.3 million for 
Aquaculture, which will be used to continue work to advance the 
domestic marine aquaculture industry, create jobs, provide sustainable 
seafood, and reduce the U.S. seafood trade deficit.
    Question 3a. Only 4.7 percent of the U.S. Arctic has been charted 
to modern standards, an increase from the 1 percent reported in 2015. 
Shipping has increased 59 percent in the last 8 years and the trend is 
expected to continue as sea ice diminishes. I am concerned we are not 
moving quickly enough to mitigate the risks associate with this 
increased activity in the remote region. Furthermore, I am worried that 
NOAA's desire to conduct hydrographic surveys its own assets is 
preventing the work from being completed as quickly, and at a reduced 
expense, as it could with contracted assets. I thank NOAA for 
contracting for some surveys, unfortunately often times the contracts 
are awarded late in the season, further decreasing the amount of survey 
work that can be completed each year.
    Will you prioritize underserved areas in the Arctic for survey to 
ensure the maritime industry has safe access to U.S. waters?
    Answer. Yes, NOAA will prioritize underserved areas in the Arctic 
in the same manner as all underserved U.S. waters. In fiscal year 2017 
NOAA plans to use both in-house and contract surveys for several areas 
in Alaska, two of which are in the Arctic, including the approaches to 
the Yukon River and Port Clarence. In addition, NOAA will survey Alaska 
waters covering West of Prince of Wales Island, north coast of Kodiak 
Island, and Yakutat Bay, Lisianski Strait, Tracy Arm, Cold Bay, as well 
as Pavlof Islands and surrounding area. In fiscal year 2018, NOAA plans 
to use both in-house and contract assets for its hydrographic survey 
requirements in Alaska, although specific locations have not been 
finalized.
    Question 3b. Will you look into NOAA's contracting processes to 
ensure they are being awarded early enough each year to maximize the 
ice free season for hydrographic surveys?
    Answer. NOAA will continue to ensure that it awards task orders 
with sufficient time to complete project areas during the survey 
season. NOAA is reviewing internal procedures to support earlier award 
of survey task orders. The goal of these procedure changes would be to 
award a greater percentage of task orders in the first half of the 
fiscal year, assuming timely availability of appropriations.
    Question 3c. In the past, adjacent survey areas have been awarded 
to multiple survey companies decreasing the efficiency of the funds 
allotted--each contractor must establish a logistics base from which 
stage assets and operate.
    When adjacent areas are identified and scheduled for survey can 
contracts be awarded to a single provider to ensure an efficient use of 
tax payer dollars?
    Answer. NOAA always strives acquire hydrographic survey data in a 
cost effective way. A surveyor's mobilization and other survey costs, 
along with past performance and ability to meet specific survey 
requirements, are the main considerations when determining which 
contract will be used to conduct a survey in a given area.
    Question 4a. Mr. Secretary, I am concerned with the steady decline 
in NOAA's fleet--at least three of NOAA's ships have been in service 
for more than 40 years; 8 ships are due to retire in the next 10 years. 
This loss of capability will have far reaching impacts on NOAA's 
ability to conduct fisheries management activities in the Pacific 
Ocean, Bering Sea, and Arctic Ocean.
    What is your fleet management plan?
    Answer. In October, 2016 NOAA released the NOAA Fleet Plan: 
Building NOAA's 21st Century Fleet. This plan includes a strategy of 
designing and constructing up to eight new ships to maintain 
capabilities for fisheries management requirements, as well as 
hydrographic and oceanographic at-sea requirements. The plan also 
outlines fleet management best practices to maximize utilization of the 
existing NOAA fleet and mitigate the anticipated loss of NOAA vessels 
over the next decade.
    Question 4b. Will NOAA be able to meet its fisheries stock 
assessments and marine mammal management activities without 
interruption under this plan?
    Answer. NOAA Fisheries will need to develop contingency plans, 
including considering other options such as charters, in the case of 
service interruption on NOAA vessels. It is likely that the loss of a 
vessel used by NOAA Fisheries for stock assessments and marine mammal 
surveys may cause fishery independent surveys to be eliminated or 
become less frequent. NOAA Fisheries will continue to perform stock 
assessments to meet fishery management needs, but a decrease in data 
collection capabilities could introduce greater uncertainty into those 
assessments.
    Eight of NOAA's ships will exceed their design service life by 
2028. Of those, four are used by NOAA Fisheries for stock assessments 
and marine mammal surveys. The NOAA Fleet Plan's long-term strategies 
and fleet management best practices can mitigate the impending loss of 
these capabilities. The NOAA Fleet Plan has a timeline for the 
sequencing of new ship construction, providing a holistic approach, 
near- and long-term, to address these challenges. Apart from the 
acquisition of new ships, NOAA's ability to meet its fish stock 
assessment and marine mammal management mandates will depend 
significantly upon continued, reliable operation of its existing ships. 
The 2018 Budget requests $12.9 million, an increase of $1.2 million, to 
increase capital repairs to NOAA's fleet under the Progressive 
Lifecycle Maintenance Program.
    Question 4c. Are any of these activities able to be conducted 
through public-private partnership or contracts?
    Answer. If the fishery research capacity of the NOAA Fleet is 
reduced, whether by early retirement or late replacement of a vessel, 
NOAA Fisheries could compensate with increased days on charter vessels, 
which can be chartered from the fishing industry, private scientific 
research vessels, or academic partners. However, this would not be 
without impact to the scientific programs involved.
    NOAA Fisheries has a long history of chartering with industry 
partners and available options vary by region. Contracted industry and 
academic vessels perform an important proportion of NOAA Fisheries' at-
sea research efforts. That being said, the NOAA ships that NOAA 
Fisheries typically uses provide capabilities that are not available on 
industry vessels or in the academic fleet. For example, fishing 
industry vessels are not built with laboratory space or accommodations 
for large numbers of scientists. Academic vessels have the laboratory 
space and room for large numbers of researchers, but they lack fishing 
capability, acoustic quieting and other fishery specific capabilities.
    Question 5. Mr. Secretary, it is the stated goal of this 
administration to grow American industries and the American workforce. 
In today's markets STEM careers are one of the largest growing sectors, 
and support countless other industries from mineral development to 
manufacturing. However, in the proposed commerce budget the majority of 
STEM education programs have been defunded, from Sea Grant to NASA. 
Could you please explain how the Department of Commerce plans to train 
more American scientists without the American training programs?
    Answer. The Department of Commerce employs thousands of creative 
and vibrant scientists and engineers, including many leading experts 
from a diversity of academic disciplines. Within available resources, 
the Department will continue to look to bolster its STEM workforce to 
meet the core government functions prioritized in the President's 
fiscal year 2018 Budget, including research to support accurate and 
timely weather forecasts, sustainable management of our Nation's 
fisheries resources, safe and efficient maritime navigation, and the 
continued provision of measurements and standards needed to accelerate 
U.S. innovation and competitiveness. In addition, pursuant to Executive 
Order 13801, on Expanding Apprenticeships in America, the Department of 
Commerce is involved in efforts to reform federally funded education 
and workforce development programs to ensure these programs are 
tailored ``to prepare workers to fill existing and newly created jobs 
and to prepare workers for the jobs of the future.''
    Specifically at NIST, young researchers participate in measurement 
science and engineering, standards and technology research . Our 
education-related programs provide NIST with opportunities to cooperate 
with the vast talent pool of students and postdocs in the U.S., to 
support our mission objectives and own workforce pipeline development 
in addition to that of the U.S. We have a successful record with 
several key NIST-wide programs, with our staff serving as mentors and 
advisers to students and young science, technology, engineering and 
mathematics (STEM) professionals.
    Question 6. Mr. Secretary, as you know, for the Northwest United 
States tsunamis are devastating natural disasters that have the 
potential to endanger American lives and destroy millions of dollars of 
American infrastructure. Through the NOAA buoy array system and 
community resonance programs we currently have the ability to save 
lives and property. Could you please explain how we will be able to 
continue to protect our coastal communities, especially rural ones, 
without these programs?
    Answer. The Department's fiscal year 2018 request prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
The proposed reductions to the Tsunami DART systems and the Tsunami 
Hazard Mitigation Program grants represent budget trade-offs within 
NOAA to help meet the administration's overall priorities. Trade-off 
considerations factor both the likelihood and consequence of events, 
e.g. Tsunami have a much lower likelihood of occurrence as compared to 
tornadoes or hurricanes. Without DART data, tsunami amplitude forecasts 
will be derived from seismic analysis which will have an impact on 
tsunami forecast accuracy and warning false alarm rates; however 
Tsunami watches, warnings, and advisories will continue.
    The proposed budget ends National Tsunami Hazard Mitigation Program 
(NTHMP) grants to States. However, NOAA will maintain $8.5 million in 
other tsunami program components to continue watches, warnings and 
advisories from a single national center. In addition, National Weather 
Service (NWS) and NTHMP would continue the TsunamiReady program at a 
reduced level. TsunamiReady is a voluntary community recognition 
program that promotes tsunami hazard preparedness as an active 
collaboration among Federal, State, and local emergency management 
agencies, community leaders, and the public.
    Despite cuts to the Regional Coastal Resilience Grants, NOAA also 
will continue to support community resilience efforts through technical 
assistance activities of the National Coastal Zone Management Program. 
The technical assistance activities include providing observational 
data, decision support tools, and training to State and local decision-
makers. In addition, NOAA's Navigation, Observations and Positioning 
products and services (e.g. water level gauges, current observations, 
shoreline LIDAR surveys, hydrography, and elevation modeling) all 
contribute to protecting coastal communities from hazards such as 
tsunamis. After disasters strike, NOAA's Coastal Science and Assessment 
and Coastal Zone Management and Services programs provide scientific 
support and technical assistance to help communities recover.
    Question 7. As an Arctic nation, we are on the front line of the 
effects of climate change. In Alaska alone, we are already experiencing 
the economic and environmental affects within our communities from 
shore erosion degrading our marine ports to permafrost melting causing 
major infrastructure issues. The American arctic has become a strategic 
location for the northwest marine passage, but we will need to protect 
the investment in the region. In order to provide active mitigation 
efforts to our industry and constituents we need scientific research. 
Could you please help me understand why the office of NOAA climate 
research has been defunded?
    Answer. The Department's fiscal year 2018 request prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
To meet these goals, some difficult decisions needed to be made. The 
administration prioritized programs that provide a good return for the 
taxpayer, as well as those that serve the most critical functions, 
while consolidating or eliminating programs. NOAA will preserve many of 
its climate and weather research functions within the Climate 
Competitive Research and Regional Climate Data and Information budgets, 
funded at $38.4M and $31.9M respectively in the fiscal year 2018 PB. 
Functions include observations and modeling at NOAA laboratories, which 
advance NOAA's forecasting capabilities. NOAA will continue to support 
the Regional Integrated Sciences and Assessments program which helps 
expand and build the Nation's capacity to prepare for and adapt to 
climate variability and change and the NOAA-led National Integrated 
Drought Information Service.
    Question 8a. Mr. Secretary, I have heard recent concerns over the 
Census Bureau's planning for the 2020 census and how it could affect 
Alaska Native, American Indian, and rural populations. I am told that 
the Census is cancelling some of what they call ``dress rehearsal 
sites''. Dress rehearsals are a way for the Census to fine-tune the 
various operations planned for the upcoming decennial census and to 
help achieve an accurate and cost-effective count. We have learned that 
they are canceling two of three 2018 dress rehearsal sites--Pierce 
County, Washington, and Bluefield-Beckley-Oak Hill area of West 
Virginia. That leaves Providence County, Rhode Island. We also know 
that the two 2017 census test sites that included Native American areas 
were canceled. The methods and findings used during these tests and 
rehearsals will be used in Alaska villages and rural communities, and 
in reservations, around the county. This leads me to believe that we 
will be heading into the 2020 census using untested or nearly untested 
methods in these communities. The census is crucial in making sure we 
have correct counts.
    Mr. Ross, can you address the consequences of heading into the 2020 
Census with methods and operations that are untested or not fully 
tested?
    Answer. For the 2018 End-to-End Census Test, the final major field 
test before the 2020 Census, the Census Bureau has made decisions that 
will prioritize the readiness and testing of its integrated system-of-
systems in the field in a Census-like environment. The lessons learned 
from how these systems interact with each other, with the operations 
being tested, and, where relevant, with the field staff and residents 
in the test sites, will be invaluable to finalizing the operational 
plan and putting the finishing refinements on the systems and 
operations in advance of the 2020 Census.
    The 2018 End-to-End Census Test began in August 2017 with the 
address canvassing operation. The plan for the address canvassing 
portion of the 2018 End-to-End Census Test includes three sites: 
Bluefield-Beckley-Oak Hill, West Virginia; Providence County, Rhode 
Island; and Pierce-County Washington. Collectively these three diverse 
sites will help the Census Bureau gain invaluable experience in 
conducting the challenging process of building the address list in 2019 
across a wide area of physical geography, housing structures, and 
residence types.
    Following the conclusion of address canvassing operations in early 
October 2017, the Census Bureau plans to proceed with the remaining 
operations in scope for the 2018 End-to-End Census Test in Providence 
County, Rhode Island. Peak operations will commence in March 2018.
    Providence County is an ideal microcosm of the 2020 Census 
experience, as its demographics mirror those of the Nation. As such, 
the Census Bureau remains confident that the 2018 End-to-End Census 
Test is sufficiently robust to test the systems that support the 24 key 
operations that will must assessed in a field test prior to the 2020 
Census. The systems supporting 11 operations that are not included in 
the 2018 End-to-End Census Test will be thoroughly tested in fiscal 
year 2018 and fiscal year 2019 prior to their deployment.
    Question 8b. And can you elaborate at all on the Census Bureau's 
plan for conducting accurate counts in Indian country and rural 
America?
    Answer. The Department of Commerce leadership is fully committed to 
a fair, accurate, and complete 2020 Census, and this is the number one 
goal of the Census Bureau. The modernization effort allows the Census 
Bureau to prioritize its resources to the parts of the country with 
higher degrees of nonresponding households to ensure they are counted.
    The Census Bureau recognizes that not everyone has the same level 
of Internet connectivity and access to technology, and has designed 
alternatives that will provide ample response options for everyone. One 
of these options will be sending a paper form to up to 20 percent of 
housing units with the first mailing, in areas where ACS data show 
there is less connectivity. All households that do not self-respond 
initially will receive a paper form.
    The 2020 Census nationwide partnership program is also vital to 
counting everyone, as they will have trusted community partners 
encouraging their community members on our behalf to respond to the 
2020 Census.
    To design a 2020 Census that will capture a complete, accurate 
count of American Indians and Alaska Natives (AIANs), the Census Bureau 
has gathered input from federally recognized Tribes. As part of an 
ongoing, government-to-government relationship with Tribal nations, the 
Census Bureau held 13 Tribal consultations with federally recognized 
Tribes and Alaska Native Claims Settlement Act (ANCSA) regional 
corporations from October 2015 to November 2016.
    The topics covered by the consultations, which will assist the 
Census Bureau in 2020 Census operations relating to Tribal nations, 
included the accurate collection of population statistics on the Tribal 
nations, best practices for mapping Tribal geography, optimizing 
procedures for enumerating on Tribal lands, refinements to 
communications strategies about the 2020 Census to Tribal nations, 
recruitment of Tribal members for 2020 Census field positions, and 
strengthening the partnership program between the Census Bureau and the 
Tribal nations to promote the 2020 Census.
    Question 9. Mr. Secretary, the Minority Business Development Agency 
is crucial for many small businesses across the country, including in 
my State of Alaska. In fact, the outcomes speak for themselves. There 
have been hundreds of jobs created or retained, and over $67 million of 
contracts awarded with help from this program in Alaska alone. In fact, 
for every $1 in Federal funds that go into MBDA and its business 
development work every year, well over $100 in economic benefit 
(contracts, financing) results on the ground. There are over 8 million 
minority owned businesses in this country, and this agency has been one 
that has been proposed to be defunded under the budget proposal. What 
then is the Department of Commerce's plan to support and continue to 
help these businesses grow and thrive?
    Answer. The administration's focus is to boost the economy through 
tax reform, regulatory reductions, unleashing our energy resources, and 
the removal of unfair trade practices. Our hope is that that will make 
a better environment for all businesses including minority businesses.
    MBDA is a relatively small entity and a grant-making entity. MBDA 
has been proposed for elimination due to the duplicative activity 
between MBDA and the Small Business Administration in their district 
offices and in their small business development centers. However, the 
President's proposal to eliminate the agency should not be viewed as an 
abandonment of the agency's core mission. Rather, it is an 
acknowledgment that the agency has succeeded in creating an environment 
that is more supportive of minority businesses today than it had been 
before the agency was founded way back in 1969. The administration 
hopes that the overall lift to the economy will drive growth for 
minority businesses and other small businesses.
    There also are similar efforts at the State and local level, as 
well as private sector efforts to encourage minority business 
development. The expectation is that those efforts will go unabated by 
the elimination of MBDA.
                                 ______
                                 
            Questions Submitted by Senator Susan M. Collins
                         seafood exports--ceta
    Question. The Maine seafood industry exports a significant amount 
of products to European consumers. In fact, the Maine lobster industry 
alone generates an economic impact of more than $1.5 billion annually, 
and it depends on the mature European market for approximately 15 to 20 
percent of the annual global lobster trade. Concerns have been raised 
that the recently ratified Comprehensive Economic and Trade Agreement 
(CETA) between Canada and the European Union will interrupt the 
decades-old flow of lobster across the northern and eastern Maine 
borders, as European duties and tariffs on Canadian frozen, processed, 
and live lobster are phased out and eliminated. Moreover, a large 
portion of Maine lobster is processed in Canada, and CETA imposes a 
quota on the amount of U.S. lobster that can be exported for processing 
in Canada and still qualify for preferential treatment under the 
agreement. Does the Department have plans and marketing strategies to 
help to promote the sale of American seafood abroad, specifically in 
Europe?
    Answer. ITA works with many sectors within the processed food and 
beverage industry on trade barriers, including standards, tariffs, 
labeling, inspection and documentation requirements, ingredient 
labeling, and others. Although the Department does not have a specific 
marketing strategy for promoting American seafood exports as that is 
done by the Department of Agriculture's Foreign Agriculture Service, 
our Industry and Analysis unit, long with our Commercial Service 
offices in Portland, ME and throughout the EU, are available to work 
with your office and the Maine lobster industry to maintain and grow 
its market share in the EU, and can also work to address other export 
barriers throughout the world.
                         seafood trade deficit
    Question. I continue to hear from Maine's fishing and aquaculture 
industries about the current seafood trade deficit, with the United 
States importing 90 percent of the seafood consumed each year. To 
reduce this seafood deficit, investment is needed in programs that 
support our domestic fisheries and our aquaculture industry. Building 
these businesses, including through increased efficiencies, can expand 
our ability to meet American seafood demand with domestic products. 
Given the concerns with the seafood trade deficit and the desire to 
promote domestic businesses, what opportunities will the Department 
pursue to support our domestic fisheries and the men and women whose 
livelihood depends on them?
    Answer. The goal of fisheries management is to achieve fisheries 
that are environmentally and economically stable. In partnership with 
the regional fishery management councils, interstate fishery 
commissions, and our stakeholders, and driven by the Magnuson-Stevens 
Act, NMFS has effectively ended overfishing and is rebuilding our 
domestic fish stocks. By preventing overfishing and rebuilding fish 
stocks, we are strengthening the value of fisheries to the economy and 
communities that depend on them, and also ensuring a sustainable supply 
of seafood for the Nation in the future.
    American's seafood industry is world-renowned and our fisheries set 
a global standard for sustainability. However, as you point out, the 
majority of the seafood we consume is imported. Improved fishery 
management may result in modest increases in harvest, but these 
increases alone are not sufficient to reduce the seafood trade deficit. 
The potential exists to expand domestic seafood production through 
marine aquaculture. The U.S. has substantial untapped potential for 
sustainable marine aquaculture, and Maine is a model for how to 
integrate wild and farmed seafood to support coastal communities and 
working waterfronts.
    In fiscal year 2018, NOAA is investing $6.3 million in marine 
aquaculture development in a number of ways. First, we are working with 
States and Federal agencies to streamline permitting processes. Second, 
we are supporting regional pilot projects, conducted in partnership 
with industry and fisheries commissions, to jump start production. 
Third, we are investing in research and development (both internal and 
external) to develop science-based tools for coastal managers and to 
support industry development. Fourth, we are working with partners to 
improve public awareness about aquaculture.
    In part due to NOAA's efforts, marine aquaculture is growing, but 
only at a modest rate. We are taking steps to accelerate this growth, 
including soliciting input and working with regional and national 
aquaculture associations such as the Maine Aquaculture Association and 
East Coast Shellfish Growers Association.
                             noaa programs
    Question. In Maine, NOAA plays an important role in helping coastal 
communities and economies thrive. NOAA's core responsibilities include 
a diverse array of functions, including accurate and real-time weather 
data, research and support for fisheries stocks, and management 
strategies for coastal resources. The Coastal Zone Management program 
and the National Sea Grant College Program, for example, are improving 
coastal resiliency and providing important technical assistance and 
education. I remain very concerned that the Department's budget request 
for fiscal year 2018 proposes to eliminate these important partnership 
programs. Moreover, the commercial fishing industry is a significant 
economic driver for Maine and our Nation. Preservation of our Nation's 
working waterfronts is essential to protecting jobs and a way of life 
that is unique to coastal States. NOAA programs are helping to advance 
our understanding and stewardship of our oceans, commercial fisheries, 
as well as marine life. These efforts support economic vitality for our 
fishermen and the long-term sustainability of fisheries. Will the 
Department continue to prioritize programs that support our Nation's 
coastal economies and fishermen?
    Answer. The President's budget includes funding to continue 
numerous projects, programs and activities within the Department of 
Commerce that support coastal economies and the fishing industry. 
Examples include navigation services, support for regional observing 
systems, applied research on marine and coastal ecosystems, rebuilding 
fish stocks, advancing fisheries science and management and aquaculture 
development, emergency preparedness for hazards, coastal and marine 
restoration and protection, and technical assistance to resource 
managers. We recognize that these programs, and many more within the 
Department, are vital to the prosperity of coastal communities and the 
Nation at-large, and we appreciate your strong support for them.
                                  edat
    Question. The forest products industry has a long and proud 
heritage in Maine and remains a significant economic driver. For 2016, 
the total economic impact of the forest products industry is estimated 
at $8.5 billion and 33,538 total jobs. Rapid market changes, however, 
have led to the recent closure of six pulp and paper mills, two biomass 
electric facilities, and related declines in forest manufacturing and 
harvesting. In response to this economic crisis, in March 2016, Senator 
King and I requested that the Department coordinate and mobilize 
Federal partners to participate in an Economic Development Assessment 
Team (EDAT), which was deployed to Maine. In January 2017, the EDAT 
released recommendations for Maine's forest economy. The Economic 
Development Administration also announced critical Federal seed 
funding, including $1 million to support the development of a long-term 
vision and strategic plan for private business, policy makers, and 
government officials to drive growth in the forest economy in rural 
communities across Maine. This strategic plan is under development by a 
broad coalition of industry and other stakeholders. Efforts include a 
global market analysis of opportunities for Maine's forest sector and a 
statewide wood supply analysis to attract new markets, which will also 
inform a marketing plan to attract investment in Maine. What role can 
the Department play to help support industry-led partnerships aimed at 
fostering local economic opportunities? For States that have gone 
through an EDAT program, will the Department remain engaged as industry 
and stakeholder partners develop and carryout strategic planning 
efforts?
    Answer. One of the key recommendations of the Economic Development 
Assessment Team (EDAT) for the future of Maine's forest-based economy 
was to invest in long-term community infrastructure.
    Rebuilding America's infrastructure is a critical pillar of the 
President's agenda to promote job creation and grow the U.S. economy, 
and public-private partnerships will play a key role in this agenda. 
The President's plan will unleash private sector capital and expertise 
to rebuild our cities and States. The fiscal year 2018 Budget Request 
dedicates $200 billion for infrastructure that can be leveraged through 
public-private partnerships into a $1 trillion investment into our 
crumbling infrastructure systems.
                                 ______
                                 
               Question Submitted by Senator John Boozman
    Question. Mr. Secretary, I share your desire to strengthen the U.S. 
economy and boost domestic manufacturing. For these reasons, I eagerly 
await the findings of the Department's Section 232 investigation into 
the effects of imported steel on U.S. national security.
    While I would welcome the opportunity to work with you on ways to 
grow the domestic electrical steel industry, I am concerned that, in 
the short-term, tariffs on imported electrical steel may have 
unintended effects, reducing the competitiveness of equipment and 
products currently built in the U.S. and hurting manufacturing 
companies already providing good jobs to Americans.
    How will you ensure that potential Section 232 action on steel 
doesn't adversely affect the competitiveness of manufacturers that rely 
on specialty steels that have limited domestic availability?
    Answer. This investigation will examine the effect of steel imports 
on U.S. national security. The Department of Commerce heard testimony 
from 37 witnesses and received over 200 comments during our public 
comment period from a wide range of respondents on issues each consider 
relevant to the Section 232 steel investigation. We are conducting the 
investigation thoroughly, taking into consideration all available 
government and industry data, including information concerning the 
potential impact any actions might have on manufacturers who rely on 
specialty steels not produced in the United States. Testimony and 
comments are posted on the Bureau of Industry and Security (BIS) 
website at: https://www.bis.doc.gov/index.php/232steel.
                                 ______
                                 
           Question Submitted by Senator Shelley Moore Capito
    Question. NOAA continues to expand its supercomputing resources to 
meet the agency's rapidly growing high performance computing demands. 
The supercomputing demands are being driven by the need to process the 
growing data collected from various sources, such as, the GOES-16 
satellite (which is collecting 40 times as much data as the old 
satellite). One of NOAA's key supercomputing resources is the NOAA 
Environmental Security Computing Center (ESCC), located in Fairmont, 
West Virginia.
    In that regard, what is the funding needed to expand the electrical 
capacity of NOAA's ESCC and to complete ``AREA B'' at the ESCC to 
support this growth and are these funds included in the current budget 
request?''
    Answer. The NOAA Environmental Security Computer Center (NESCC) is 
currently a 5-Megawatt (MW) site which is sufficient for all of the 
systems that NOAA currently operates in the NESCC. No funding is 
included in the fiscal year 2018 President's budget to support the 
expansion of electrical capacity of NOAA's ESCC because the 5 MW power 
capacity is sufficient for all of the systems that NOAA currently 
operates in the NESCC.
                                 ______
                                 
             Questions Submitted by Senator James Lankford
    Question 1. Mr. Secretary, on May 31st, you met with Vietnamese 
Prime Minister Nguyen Xuan Phuc to discuss the economic relationship 
between the United States and Vietnam. The related press release noted 
in part: ``President Trump is prioritizing engagement with Vietnam, an 
important trading partner of the United States.'' The U.S. Commission 
on International Religious Freedom's 2017 report recommended that 
Vietnam be designated as a country of particular concern, which is a 
country that engages in or tolerates particularly severe religious 
freedom violations that are systematic, ongoing, and egregious.
    As part of the Trade Promotion Authority, I included an amendment 
that required religious freedom to be part of trade negotiations. Have 
you discussed the religious freedom and human rights violations in 
Vietnam as part of your discussions with the Prime Minister? If so, 
please provide a summary of those discussion as well as responses from 
the United States to address these violations.
    Answer. The U.S. Government is not in trade agreement negotiations 
with the Government of Vietnam. That said, progress on human rights in 
Vietnam, including protecting religious freedom and human rights, is of 
the utmost importance to this administration.
    In the Joint Statement issued following the Prime Minister's visit, 
President Trump and Prime Minister Phuc recognized the importance of 
protecting and promoting human rights, including religious freedom. The 
Joint Statement reflected discussions that took place on this issue 
during the Vietnamese Prime Minister's visit to the United States.
    Leading up to this visit, my Deputy Assistant Secretary for Asia, 
Diane Farrell, traveled to Vietnam in May 2017 and communicated the 
importance of promoting human rights, through freedom of expression, in 
her bilateral meetings. Her trip was one of several visits to Vietnam 
by U.S. Government officials across various U.S. Government agencies in 
which this issue was raised.
    We have also pressed Vietnam on human rights through formal 
dialogues. On May 23, 2017, the U.S. Government led by the Department 
of State held the 21st round of the United States-Vietnam Human Rights 
Dialogue, which covered a wide range of human rights issues, including 
the importance of making progress on labor law reforms and our concerns 
about restrictions on freedom of expression and religious freedom.
    Question 2a. The U.S. Government, through the National 
Telecommunications and Information Administration (NTIA) at the 
Department of Commerce, previously held a ``stewardship'' role over the 
domain name system by virtue of a contractual relationship with the 
Internet Corporation for Assigned Names and Numbers (ICANN). ICANN was 
authorized to manage the technical underpinnings of the DNS through its 
contract with the Commerce Department, which is called the Assigned 
Numbers Authority (IANA) functions contract.
    On March 14, 2014, NTIA announced its intention to transition its 
stewardship role and procedural authority over key domain name 
functions to the global Internet multistakeholder community. On October 
1, 2016, the contract between the U.S. Commerce Department and ICANN 
expired, and as a result, the U.S. relinquished its oversight of the 
Internet domain name system.
    Currently, the ICANN community consists of three Supporting 
Organizations (SOs) and four Advisory Committees (ACs) that develop 
policies for approval by the ICANN Board. Together, these bodies 
comprise the DNS policymaking community. The ICANN SOs and ACs include 
the Governmental Advisory Committee (GAC), which provides advice on 
public policy issues and includes 110 governments and 35 observers from 
intergovernmental groups.
    The President's fiscal year 2018 budget notes that ``the bureau 
also continues to represent U.S. interests at multistakeholder forums 
on Internet governance and digital commerce.'' Since the expiration of 
the contract, what role has the NTIA played role as a GAC member?
    Answer. Since the expiration of the IANA functions contract, NTIA 
has continued to participate actively in ICANN through the GAC. To best 
advance and defend U.S. policy interests, NTIA has convened U.S. 
Government agencies monthly to prepare and develop positions pertaining 
to a range of issues including those associated with domain name system 
(DNS) abuse, ICANN accountability, new generic top level domains 
(gTLDs), and access to domain name registration data for use by law 
enforcement.
    More specifically, NTIA has worked with colleagues at the 
Department of Justice, Federal Bureau of Investigation, and Federal 
Trade Commission via the GAC in pressing ICANN to provide information 
on their DNS abuse prevention and mitigation efforts with the intent of 
holding ICANN to its existing commitments and introducing transparency 
around them. Further, as data protection and privacy rules expand in 
Europe, NTIA is actively engaging with ICANN and Europe, through the 
GAC and other channels, to ensure that U.S. law enforcement continues 
to have access to important domain name registration information that 
provides an important tool in law enforcement efforts.
    Moving forward, NTIA will continue to vigilantly defend and 
advocate U.S. policy positions and interests, including ensuring that 
the GAC remains advisory and that ICANN's jurisdiction remains in the 
State of California.
    In order to most effectively represent U.S. interests, however, 
NTIA needs political leadership. Swift confirmation of an Assistant 
Secretary for Communications and Information will best ensure U.S. 
Internet governance and digital economy interests are effectively 
advanced in this and other fora.
    Question 2b. Has the ICANN Board has rejected consensus GAC advice 
or acted specifically counter to the vote from the NTIA 
representatives?
    Answer. No. The ICANN Board has not rejected consensus GAC advice 
since the IANA transition nor does it have the ability to minimize the 
voice of NTIA within the GAC. As part of the IANA stewardship 
transition GAC consensus advice was enshrined in the ICANN bylaws by 
specifically defining GAC consensus as the lack of a formal objection. 
This preserves the right of the United States to block GAC consensus 
advice, if needed.
    U.S interests are most effectively advanced when the United States 
stands with allies in the GAC. Swift confirmation of an Assistant 
Secretary for Communications and Information is critical to NTIA's 
ability to fully engage with other nations and drive consensus for U.S. 
positions.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
                                 canada
    Question. The President has agreed to take action on Canadian 
softwood lumber, a long-standing point of contention between our 
countries because of the way Canadian provincial governments sell 
logging rights. This is a complex trade issue that could have real 
financial impacts on the forestland owners and our loggers. Every 
northeastern State ships logs to Quebec, and many Vermonters and many 
other Americans also import large amounts of Canadian lumber for 
furniture-making. Similarly, the President has had tough words for the 
Canadian dairy industry concerning its prices for ultra-filtered milk, 
which has been undercutting the price of U.S. exports to Canada, one of 
our most important markets for dairy. These trade issues are extremely 
complex. Leaving aside retaliation, our own policies run the risk of 
hurting us.
    What assurances can you provide to Americans who benefit from 
current export and import policies that as the administration pursues 
improvements to these polices you will not destroy their own 
livelihood?
    Answer. We fully appreciate the urgency and gravity of the 
situation facing your constituents. The administration is fully 
committed to resolving barriers to U.S. dairy exports and unfair 
Canadian softwood lumber imports to ensure our trading partners meet 
their international trade obligations. Canada's recent domestic policy 
change for dairy is particularly troubling. To address this issue, the 
administration will continue to press our concerns with Canada on this 
policy change and its potential effects on sales of U.S. dairy 
products. Commerce is examining Canada's policy change considering 
Canada's international trade obligations. The United States has also 
raised our concerns with Canada at the World Trade Organization 
Committee on Agriculture, including at the Committee's March 27-28 
meeting.
    As you indicate, the softwood lumber issue is very complicated but 
we are working toward an effective, enforceable, and sustainable long 
term solution to softwood lumber trade with Canada. We are ready to 
resolve the issue either under our trade remedy laws or through an 
enforceable agreement with the Canadian Government that will ensure 
fair and stable conditions. Commerce is committed to vigorously 
utilizing the U.S. dumping and countervailing duty laws to offset 
unfair trade practices that put American jobs at risk. Concurrently, I 
am actively involved in resolving the lumber issues to provide a level 
playing field for all American softwood lumber producers. We continue 
to work closely with a range of domestic stakeholders while engaging 
with the Government of Canada to ensure fair and stable conditions for 
trade in softwood lumber that reflects current market realities and 
helps maintain U.S. jobs.
    The effective administration of our trade remedy laws is one of my 
highest priorities and, to the extent imports are affected by dumping 
or subsidization, we will follow our legal obligations to take remedial 
border measures and collect duties as appropriate.
                                 trade
    Question. Vermont's largest trading partner is Canada. In fact, in 
2015 Vermont exported more than $2.2 billion in goods to Quebec alone. 
Nationwide, the top five purchasers of American goods are China, 
Canada, Mexico, Germany, and Japan. The President has picked trade 
fights with four of those five nations. He claims he does so to protect 
American workers, yet his budget slashes workforce training programs. 
Of course we should oppose unfair trade practices as part of a 
comprehensive plan to improve U.S. competitiveness and create good, 
stable jobs here. But from what I see, there is no real plan.
    What is this administration's plan--and please speak in specifics--
for improving U.S. competitiveness in the global market, and when will 
Congress and the American people see that plan?
    Answer. The administration is taking a rigorous analytic approach 
to improve the global U.S. competitiveness. We believe it is important 
to have programs targeted specifically at America's manufacturing base 
and emerging, strategic industry sectors poised for growth. We are 
still undertaking in-depth analysis, which means some of our plans are 
currently still in development:
    1.  Updating and renegotiation our current trade agreements, 
specifically the North American Free Trade Agreement (NAFTA). We 
believe that these agreements need to be updated to address issues that 
are putting U.S. companies at a disadvantage. Our negotiation 
objectives for NAFTA will serve as a model for how we pursue trade 
agreement updates with other partners. The NAFTA negotiating objectives 
aim to apply the highest standards covering the broadest possible range 
of goods and services to ensure truly free and fair trade that supports 
higher-paying jobs and economic growth in the United States. Our 
efforts to improve our current trade agreements will also draw heavily 
on analysis under development on trade deficits, as well as a separate 
analysis on trade agreements violations and abuses.
    2.  Using our trade laws to protect American firms. In addition to 
increasing the amount of anti-dumping/countervaling duty cases through 
self-initiation, we are exploring other avenues such as Section 232 of 
the Trade Expansion Act of 1962 and Section 201 of the Trade Act of 
1974.
    3.  Making sure U.S. exporters have the information they need. It 
is important that our companies know that the U.S. Government can help 
them resolve unfair trading practices that are impacting their 
businesses overseas and how they can leverage new and updated trade 
agreements.
                     national weather service (nws)
    Question. Improving the ability of the National Weather Service 
(NWS) to predict and forecast water and climate events will help save 
lives and protect property by allowing emergency managers to better 
prepare and respond to extreme weather incidents. The chronic 
underfunding of these services has resulted in reduced staffing across 
the country, and hampers storm surveys to examine damage after severe 
weather or floods, limits training opportunities for staff, and reduces 
the ability to recruit voluntary weather observation support. 
Sufficient resources would enhance NWS staff ability to do their jobs 
in 24 hour forecasting and build an infrastructure that will sustain 
increasingly severe weather patterns.
    The budget proposal cuts the National Weather Service by $62 
million, or 6 percent. These reductions would only compound the chronic 
underfunding of resources available to the NWS. As the severity of 
weather trends increase, how do you expect NWS to create a weather and 
water ready nation with the resources your budget would provide?
    Answer. The Department's fiscal year 2018 request prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
The fiscal year 2018 President's budget request allows NWS to continue 
readiness, maintain 24x7 operations, and provide limited decision 
support services. With the request, NOAA will prioritize core functions 
that provide the observational infrastructure, capabilities, and staff 
to produce timely and accurate weather forecasts and warnings.
                  economic development administration
    Question. The administration proposes to eliminate the Economic 
Development Administration (EDA) and the Manufacturing Extension 
Partnership (MEP), calling them ``duplicative, ineffective or less 
critical.'' To me this proposal is misguided at best and dangerous at 
worst. It threatens efforts to revitalize communities that are 
struggling with job losses and rural communities that are losing 
population to urban centers. The EDA and MEP have supported projects to 
modernize American economies that are increasingly based on technology 
jobs, to spur on networks of entrepreneurs and to assist value added 
manufacturing. These are successes the administration should work to 
replicate and support, not eliminate.
    Under which category does the administration label the MEP: 
duplicative, ineffective or less critical? If duplicative, duplicative 
of what? If ineffective, what substantiates that label? And if less 
critical, what manufacturing programs does the administration find more 
critical, and what resources is it dedicated to those programs?
    Answer. The budget must be about priorities. Even though MEP has 
certainly performed a good function, we chose to increase spending for 
defense and military to protect our national security and believe any 
further funding for MEP centers should come from non-Federal sources. 
We are in a challenging budget period and difficult budget decisions 
had to be made.
    Question. Given that the President has talked about ``bringing 
back'' manufacturing, what steps is the administration taking to help 
existing manufacturing businesses grow or to incubate new businesses?
    Answer. The administration's approach to economic development is to 
boost the entire economy through regulatory reform, unleashing energy 
resources, trade reform and tax cuts for businesses and individuals. 
The administration is committed to bringing jobs back and to building 
jobs in existing U.S. businesses. The Department of Commerce believes 
that some MEP Centers will transition to non-Federal revenue sources, 
which was originally intended when the program was established.
    Question. The EDA plays a key role in stimulating private 
infrastructure investment, and its elimination is at odds with the 
President's stated goal of significant economic development. How does 
the administration square these contrasting points and actions, and 
what alternative sources of capital would the administration direct 
rural communities towards as a replacement for this type of financial 
support for infrastructure projects?
    Answer. The administration's 2018 budget prioritizes rebuilding the 
military and making critical investments in the Nation's security. It 
also identifies the savings and efficiencies needed to keep the Nation 
on a responsible fiscal path.
    Rebuilding America's infrastructure is a critical pillar of the 
President's agenda to promote job creation and grow the U.S. economy. 
Regulatory reforms will spur growth and investment by, for example, 
dramatically reducing permitting time for infrastructure projects from 
10 years to 2 years and to get a ``yes'' or ``no'' quickly by 
streamlining regulations. The President's plan will unleash private 
sector capital and expertise to rebuild our cities and States. The 
fiscal year 2018 Budget Request dedicates $200 billion for 
infrastructure that can be leveraged through public-private 
partnerships into a $1 trillion investment into our crumbling 
infrastructure systems. Investing in rural infrastructure is a key part 
of the President's plan.
                                 ______
                                 
            Questions Submitted by Senator Dianne Feinstein
                           atmospheric rivers
    Question 1a. On the West Coast, major weather events in the form of 
Atmospheric Rivers can cause major flooding, as we saw this past winter 
in California. They can take down structures with their hurricane-like 
winds. They can also save counties and municipalities from periods of 
prolonged drought when managed correctly.
    What is NOAA doing to address the West Coast's forecasting needs 
regarding Atmospheric River events, and how will these efforts be 
impacted by the Department's fiscal year 2018 budget?
    Answer. Atmospheric river events account for up to half of the 
winter precipitation along the west coast of the United States. NOAA 
invests in research (e.g., NOAA Hydrometeorological Testbed, U.S. 
Weather Research Program, and CalWater) to better understand 
atmospheric rivers and their importance to both weather and climate 
using satellite, radar, aircraft and other observations, as well as 
major numerical weather model improvements. The NWS Western Region 
continues to work closely with NOAA's Office of Oceanic and Atmospheric 
Research (OAR) and academia, such as the Scripps Research Institute, to 
transfer improved atmospheric river observation tools and model 
analysis into the daily operations of the western Weather Forecast 
Offices (WFOs). This multi-year research to operations effort will 
continue, although potentially at a slower rate.
    Further, NOAA invests in accelerating the advancement of modeling 
research into operations for improved warnings and forecasts through 
efforts that include development of the Next Generation Global 
Prediction System and other model coupling, data assimilation, and 
collaborative research efforts. NOAA also invests in research in 
support of the development of new features in, and services provided 
by, the National Water Model including the development of nested hyper-
resolution modeling and enhanced hydro-meteorological forcing.
    NOAA's newest geostationary satellite, GOES-S, will be launched in 
fiscal year 2018 and will be positioned over the western Pacific Ocean 
as the operational GOES-West satellite in late fiscal year 2018 or 
early fiscal year 2019. It will provide revolutionary observing 
capabilities that will assist in the monitoring and forecasting of 
atmospheric rivers.
    The President's fiscal year 2018 budget requests resource 
reductions for global modeling and National Water Model research, 
development and transition efforts in order to prioritize sustaining 
NWS operational service delivery. The reduction is expected to slow the 
improvements in both the operational global atmospheric model as well 
as the National Water Model.
    Question 1b. What is NOAA doing to ensure that Western weather 
forecasting is on par with Eastern efforts?
    Answer. To ensure that western weather forecasting is on par with 
eastern efforts, NOAA is maintaining and enhancing regional in-situ 
observation and monitoring capabilities in the west as well as for the 
tropical and mid-latitude Pacific Ocean (which significantly impacts 
predictability for western weather forecasting). NOAA continues to 
invest in improved satellite reconnaissance through new instrumentation 
and improved analyses of data. NOAA's newest geostationary satellite, 
GOES-S, will be launched in fiscal year 2018 and will be positioned 
over the western Pacific Ocean as the operational GOES-West satellite 
in late fiscal year 2018 or early fiscal year 2019. It will provide the 
same revolutionary observing capabilities as GOES-16 (GOES-East) that 
assist in the monitoring and forecasting of weather. NOAA is investing 
in research to accelerate the advancement of modeling research into 
operations for improved warnings and forecasts through efforts that 
include development of the Next Generation Global Prediction System and 
other model coupling, data assimilation, and collaborative research 
efforts. NOAA is investing in research in support of the development of 
new features in, and services provided by, the National Water Model, a 
hydrologic model that simulates observed and forecast streamflow over 
the entire continental United States.
    Question 1c. Has NOAA looked at permanently stationing aerial 
assets on the West Coast in order to better monitor and study 
Atmospheric Rivers?
    Answer. Through NOAA Hydrometeorological Testbed, CalWater 2014, 
Calwater 2015, El Nino Rapid Response (ENRR) and other targeted field 
campaigns, NOAA has deployed aerial assets to better monitor and study 
atmospheric rivers and there now exists a wealth of observations 
spanning multiple years. NOAA and external partners are analyzing the 
multiyear data sets to determine the value of permanently stationing 
aerial assets on the west coast. Until these analyses are completed, it 
remains premature to make a determination on the added value of 
permanently stationing aerial assets on the West Coast to better 
monitor atmospheric rivers.
                       climate prediction center
    Question 2. Better forecasts of precipitation a few weeks out (sub-
seasonal forecasts) to a year out (seasonal forecasts) are critical to 
managing water more effectively in California. The Climate Prediction 
Center at NOAA produces sub-seasonal to seasonal (S2S) forecast for the 
Nation, including California.
    There is increasingly intense competition for water in California 
among cities, farms, and fisheries, and California water managers need 
NOAA to place a higher priority on improving tools needed to help 
manage water more effectively in the face of this competition. This 
entails improving S2S forecasts, which means increasing the Climate 
Prediction Center's resources, not eliminating it.
    Specifically, how will NOAA improve forecasting while merging the 
critical services of the Climate Prediction Centers with the Weather 
Prediction Center?
    Answer. Under the fiscal year 2018 President's Budget,NOAA will 
create efficiencies by creating a single weather prediction center for 
all temporal scales. The integrated Weather Prediction Center will span 
the continuum of prediction services from the present through existing 
sub-seasonal and seasonal domains. While this will result in a more 
continuous suite of products, future advancements in 'week-two through 
seasonal' products and services will be affected.
                          harmful algal blooms
    Question 3a. Harmful algal blooms in both marine and freshwater 
threaten drinking water sources, cause human and wildlife illness and 
death, and can cause major fishery closures with severe economic 
impacts. Harmful algal blooms are a growing issue nationwide, 
particularly in California.
    How does NOAA plan to increase inter-agency coordination and 
research needs to improve prediction and abatement of harmful algal 
blooms?
    Answer. The primary, government-wide mechanism, through which NOAA 
is increasing inter-agency coordination, research, and planning is the 
Interagency Working Group for HABHRCA (IWG). NOAA co-chairs the IWG 
with the EPA. Since re-instituting the IWG-HABHRCA in 2014, NOAA has 
worked through the IWG to identify research priorities and gaps in 
Federal activities and capabilities, and has produced two interagency 
reports as directed by Congress.
    NOAA routinely partners with Federal agencies to identify and 
address research needs related to HAB prediction, including when new 
needs emerge. Examples of these collaborations include:
    1.  Early warning of freshwater HABs: The Cyanobacteria Assessment 
Network involves research collaboration between NOAA, EPA, NASA, and 
USGS to detect HABs in freshwater lakes and reservoirs greater than 1km 
x 1km in size. This satellite-based detection will enhance our ability 
to remotely monitor and predict freshwater blooms. The first national 
snapshot of freshwater HABs is anticipated by early 2018.
    2.  Forecasting HABs in Lake Erie: NOAA's Lake Erie HAB forecast 
relies on stream flow data from the USGS, weather, toxin sampling, and 
lake circulation models from NOAA, satellite data from NASA, monitoring 
and communication by EPA, with additional input from local partners.
    3.  Responding to HABs in Lake Okeechobee: NOAA supported EPA and 
local partners in the response to the July 2016 large cyanobacterial 
blooms in St. Lucie and Martin Counties. NOAA routinely provides 
imagery and can predict bloom trajectory as requested.
    With respect to abatement, NOAA's Coastal Science and Assessment 
program funds development of promising technologies for preventing, 
controlling, or mitigating HABs and their impacts. In 2017, a NOAA-
sponsored forecast (Pacific Northwest HAB Bulletin) helped Washington 
State to determine whether to open razor clam harvests, and to take the 
unprecedented step of increasing bag limits before toxin levels rose. 
In the Gulf of Mexico, NOAA funded development and deployment of an 
automated underwater microscope that alerts managers to rising levels 
of toxic algae. State agencies use these alerts to ensure the safety of 
seafood and recreation, and to investigate marine wildlife die-offs. 
Most NOAA efforts are partnerships that leverage funding and support 
from multiple Federal, State, academic, and other entities.
    Question 3b. Communication to the public on these issues are also 
increasingly important. How does NOAA plan to improve public 
communication about this issue?
    Answer. NOAA and its interagency partners are increasing the 
effectiveness and availability of public advisories and establishing 
more consistent communications for users. For example, NOAA issues a 
seasonal HAB forecast for Lake Erie each July that is similar to NOAA's 
seasonal hurricane and tornado forecasts. This year's forecast briefing 
in Ohio was attended by over a dozen media outlets with an additional 
250 people participating in the accompanying webinar. The forecast was 
reported in the New York Times, Washington Post, and all major regional 
papers. During bloom season, NOAA sends twice-weekly HAB bulletins with 
3- to 5-day forecasts of bloom location, concentration, and trajectory 
to more than 2,000 U.S. and 200 Canadian subscribers, including 
recreational and charter boaters, beachgoers, and water treatment 
managers.
    When responding to a bloom, NOAA works with locally designated lead 
agencies to facilitate information flow between wildlife, veterinary, 
medical, and public health officials, and to disseminate information to 
the public via websites, press releases, and media events. NOAA's 
Phytoplankton Monitoring Network (PMN) engages hundreds of volunteers 
who monitor for phytoplankton and HABs in cooperation with trained 
scientists. NOAA's PNM website provides information on volunteering and 
training, a mobile app for species identification, access to monitoring 
data, and general information and news on HABs.
    NOAA partners with communities to better understand socioeconomic 
and health-related impacts of HABs and hypoxia, and share that 
information with user groups. In 2018 NOAA anticipates supporting 
additional research on socioeconomic impacts of HAB forecasts and the 
cost-effectiveness of various mitigation approaches, which will help 
NOAA communicate with the public more effectively.
    Question 3c. What efforts is NOAA undertaking to help determine 
sources for the harmful algal blooms and help other agencies develop 
best management practices to reduce these sources in both urban and 
rural areas?
    Answer. NOAA's role in these activities varies by region. In Lake 
Erie, blooms are caused by excess phosphorus runoff from agricultural 
operations entering the lake from rivers. While NOAA does not regulate 
or manage the nutrients causing the problem, the HAB models funded and 
produced by NOAA are used to set regional nutrient reduction goals in 
the Great Lakes Water Quality Agreement. This agreement aims to achieve 
a 40 percent reduction in total phosphorus entering the western and 
central basins of Lake Erie. NOAA also contributes to nutrient 
monitoring to help States and counties determine if they are meeting 
their phosphorus reduction goals.
    Along the West Coast, NOAA has invested heavily in research on 
bloom onset. HAB researchers in California were among the first to 
detect and understand the magnitude of the massive 2015/2016 West Coast 
bloom because they had deployed a high-tech armada of sensors as part 
of an ongoing NOAA-funded research project at the University of 
California, Santa Cruz. The university and its partners studied the 
role of upwelling and coastal land use patterns on the development of 
HAB hotspots along the California coast. The award was part of NOAA's 
Ecology and Oceanography of Harmful Algal Blooms (ECOHAB) research 
program.
                          ocean acidification
    Question 4. A recently released 3-year study by Oregon State 
University identified persistent, highly acidified stretches of water 
throughout the California Current System along the West Coast. In 
certain areas, pH levels were the lowest of any recorded in oceanic 
surface waters throughout the world. As atmospheric carbon dioxide 
continues to rise rapidly, these areas impacted by record levels of 
ocean acidification will continue to become even more acidified.
    How is NOAA addressing this increasingly serious issue, and what 
additional funds are being devoted to studying and addressing ocean 
acidification?
    Answer. Assessing the vulnerability of U.S. coastal ecosystems to 
the effects of ocean acidification is a primary goal for NOAA. NOAA 
works to determine how ocean chemistry is changing in response to 
acidification, evaluate the sensitivities of marine resources to these 
changes, and provide tools and information to impacted human 
communities. Ocean acidification is not the only change occurring in 
our Nation's ocean, and NOAA is also engaging in work that addresses 
the complexities of multiple aspects of ocean change.
    Scientists expect ocean species and ecosystems to change with ocean 
acidification. NOAA funds research and monitoring to better understand 
the impacts of ocean acidification on species and ecosystems. This work 
includes how ocean chemistry changes will affect wild fisheries, which 
support industries and cultural practices intricately woven into the 
fabric of coastal communities and economies. NOAA funds laboratory 
research on commercially important species and fisheries forecasts. 
This research helps inform management of important fisheries such as 
the Alaska king and snow crab fishery. NOAA funding also supports 
educational opportunities to bring current research on ocean 
acidification and its potential impacts to fisherman throughout the 
U.S., from Alaska to the Gulf of Mexico.
    Addressing ocean acidification requires collaboration of many 
stakeholders. NOAA is working with the aquaculture industry to help 
them monitor ocean chemistry conditions in their facilities and growing 
areas and to cultivate strains that are resilient under acidified 
conditions. Ocean acidification-related research and monitoring with 
the aquaculture industry helps managers make business decisions, while 
scientists learn from the data. NOAA also works closely with coastal 
State governments, many of which are now engaged in developing their 
responses to ocean acidification. NOAA also supports community-based 
efforts related to ocean acidification at a regional level through its 
founding (in concert with the Regional Associations of the Integrated 
Ocean Observing System) and investment in the country's six regional 
coastal acidification networks.
    NOAA is a leader on ocean acidification nationally and 
internationally and is a trusted source of scientific information on 
the subject. NOAA helped launch and co-chairs the Global Ocean 
Acidification Observing Network and is the primary investor in and lead 
developer of the Ocean Acidification Information Exchange, a soon-to-be 
launched web-based collaboration site required by the Federal Ocean 
Acidification Research and Monitoring Act of 2009.
    The fiscal year 2018 President's budget includes $10 million for 
NOAA's ocean acidification efforts.
             drift gillnets and deep set buoy fishing gear
    Question 5a. Secretary Ross, I was disappointed to hear that on 
June 9th, NOAA Fisheries announced its intention to withdraw a proposed 
rule that would place hard caps on the bycatch of protected species in 
the drift gillnet swordfish fishery. Hundreds of protected species, 
including critically endangered sperm whales, various pinnipeds, and 
the vulnerable leatherback sea turtle, are caught and killed annually 
due to current fishing practices that solely deploy miles long drift 
gillnets.
    In response to this bycatch issue, in March 2014, the Pacific 
Fishery Management Council stated it would move toward a goal of 
developing a comprehensive plan to ``transition the current drift 
gillnet fishery to a fishery utilizing a suite of more environmentally 
and economically sustainable gear types.'' Along with Senators Wyden 
and Boxer, I sent a letter applauding those efforts.
    However, in June of 2015, the Council focused instead on hard caps 
for the use of drift gillnets. In a September 2015 letter, Senators 
Boxer, Wyden and I, once again, expressed our concerns to the Council 
and NOAA about the continued use of drift gillnets by the fishery, even 
with hard caps, and the need to move toward alternative, more 
sustainable gear, like deep-set buoys. As we noted, deep set buoy gear 
has been commercially deployed in the Atlantic swordfish fishery, 
tested in the Pacific, and proven to be successful at both limiting 
harm to other species and producing a high quality catch.
    The resulting proposed rule was developed with significant public 
input and support from environmental groups as well as industry, and 
approved by the Pacific fishery management council. The Council then 
submitted the proposed rule to NOAA fisheries for approval and 
implementation. Per the Magnuson Stevens Act, the Secretary shall 
``approve, disapprove, or partially approve a plan or amendment'' by 
written notice to the Council. The written notice of disapproval or 
partial approval shall specify: the applicable law with which the plan 
or amendment is inconsistent; the nature of such inconsistencies; and 
recommendations concerning the actions that could be taken by the 
Council to conform such plan or amendment to the requirements of 
applicable law. Further, ``if the Secretary does not notify a Council 
within 30 days of the end of the comment period of the approval, 
disapproval, or partial approval of a plan or amendment, then such plan 
or amendment shall take effect as if approved.''
    NOAA fisheries recently withdrew the hard cap rule citing that it 
was ``unnecessary.'' As withdrawal is not a procedural option in the 
Magnuson Stevens Act, do you consider this withdrawal to be a notice of 
disapproval?
    Answer. The Pacific Fishery Management Council recommended revising 
the regulations implementing the existing Fishery Management Plan for 
Highly Migratory Species; the recommendation did not constitute a new 
plan or plan amendment. The Magnuson-Stevens Act provides that the 
Secretary undertake proposed and final rulemaking, and solicit public 
comment, before implementing such recommendations from fishery 
management councils. After issuing a proposed rule and requesting 
comment, the Secretary decided to withdraw the proposal in light of new 
information regarding economic hardships to American fishermen 
documented in the public comments received. The public comment caused 
NMFS to further analyze the costs and benefits of the proposal to the 
environment and the affected fishing industry in the context of the 
existing environmental protections afforded protected species under the 
Endangered Species Act and the Marine Mammal Protection Act. On June 9, 
2017, the Regional Administrator for the West Coast Region provided a 
letter to the Pacific Fishery Management Council explaining the 
rationale for withdrawal of the proposal, and suggesting alternative 
paths that the Pacific Fishery Management Council might consider for 
improving management of the drift gillnet fishery. While NMFS did not 
characterize this decision as a ``notice of disapproval,'' the decision 
reflects a disapproval of the proposal, as informed by the appropriate 
public process and subsequent analyses.
    Question 5b. Did you or your designee provide written notice to the 
Council concerning this rule withdrawal, and if so, did the written 
notice provide details, per the Magnuson Stevens act, regarding the 
applicable law with which the plan or amendment is inconsistent; the 
nature of such inconsistencies; and recommendations concerning the 
actions that could be taken by the Council to conform such plan or 
amendment to the requirements of applicable law?
    Answer. Yes, NMFS provided written notice to the Pacific Fishery 
Management Council in the form of a letter delivered on June 9 2017. 
The letter explained the rationale, pursuant to the Magnuson-Stevens 
Act National Standard 7 (i.e., conservation and management measures 
shall, where practicable, minimize costs and avoid unnecessary 
duplication) for concluding that implementing protected species hard 
caps for the drift gillnet fishery is not warranted at this time. The 
letter further noted that the purpose of the Council's recommended hard 
caps was to conserve non-target species and further reduce bycatch in 
the fishery below levels currently permitted by applicable law, while 
maintaining or enhancing an economically viable U.S. West Coast-based 
swordfish fishery. NMFS advised that to meet this purpose, the Council 
could revise its proposed regulations so that any management action 
would not result in significant economic effects such as those that are 
expected during a fishery closure (e.g., through reduced time/area 
closures). As explained above, the Pacific Fishery Management Council's 
recommendation was not in the form of a new fishery management plan, or 
amendment to a plan.
    Question 5c. Per the Magnuson Stevens Act, without written notice, 
this proposed amendment would take effect as if it were approved. Can 
you explain why this should not be the case in this instance?
    Answer. NMFS based its decision in part on comments received from 
the public on the proposal. Both Federal statute and standing executive 
orders compel executive agencies such as NMFS to consult the public on 
the costs and benefits of certain types of decisions. In this case, 
NMFS learned though public comment on the proposal that analysis 
supporting the proposed rule had not adequately considered short-term 
economic effects to American fishermen.
    Question 5d. Use of deep set buoy gear has shown that it is not 
only profitable, but it also results in bycatch levels significantly 
below those of drift gillnets. Deep set buoys have also been tested 
with successful results in the Pacific fishery and are already being 
considered in the Experimental Fishing Permit Process. Why hasn't this 
gear type been authorized for full use in the swordfish fishery?
    Answer. The Pacific Fishery Management Council is developing 
alternatives to authorize deep set buoy gear as a legal gear type. 
These alternatives include gear definition, geographic area, 
permitting, gear tending requirements, and species retention. The 
Pacific Fishery Management Council is scheduled to make a final 
recommendation to authorize the gear to NMFS as early as June 2018. In 
the meantime, NMFS has issued and is considering issuing additional 
Exempted Fishing Permits to use the gear to collect additional data to 
inform the Pacific Fishery Management Council's decisionmaking process. 
Once the Pacific Fishery Management Council makes its final 
recommendation, NMFS would then propose regulations to authorize the 
fishery.
                                 ______
                                 
          Questions Submitted by Senator Christopher A. Coons
         national oceanic and atmospheric administration (noaa)
    Question 1. The Atlantic hurricane season just started, and the 
question during hurricane season is not if there will be a hurricane, 
it's when and where hurricanes will hit. Forecasters at NOAA say that 
we could see an above average number of hurricanes this year. Yet the 
administration's budget request makes cuts to programs that help us 
predict hurricanes, such as the National Weather Service, satellite 
programs, and ocean observation. The budget request also makes dramatic 
cuts to the foundational research that supports the Weather Service's 
predictions. Finally, the budget request eliminates Coastal Management 
Grants and other programs that help prepare our coasts for hurricanes 
by building resiliency.
    What are you doing to ensure that these proposed cuts will not have 
an adverse effect on our ability to prepare for and respond to natural 
disasters?
    Answer. The Department's fiscal year 2018 request prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
NOAA is prioritizing functions that provide the observational 
infrastructure, capabilities, and staff to produce timely and accurate 
weather forecasts and warnings for the protection of life and property 
as well as make communities resilient to weather extremes. NOAA is also 
continuing to operate critical facilities, such as the National 
Hurricane Center, at the same funding levels and provide the same 
excellent service for analyzing and predicting the development and 
movement of tropical cyclones. The addition of new sensing sources, 
such as the GOES-16 weather satellite, will provide even more clarity 
for observing the vast tropical oceans. NOAA is supporting community 
resilience efforts through technical assistance activities of the 
National Coastal Zone Management Program. The technical assistance 
activities include providing observations data, decision support tools 
and training to State and local decision-makers to help them improve 
the resilience of their coastal communities and economies.
    Question 2. In addition to the budget cuts, there is currently no 
director of NOAA. In the event of a hurricane or other natural 
disaster, there is serious concern that NOAA's hard-working civil 
servants, who are critical to protecting human lives, will not know 
what tools they will have or even who is in charge.
    How can you assure the American people that this lack of leadership 
will not impede NOAA from providing critical information at a time when 
a difference of minutes can save lives?
    Answer. NOAA has and will continue to provide the American public 
with the science, products, and services needed to protect life and 
property, the Nation's natural resources, and the economy. This 
includes the dissemination of timely and accurate forecasts and 
warnings for natural disasters, including hurricanes. In fact, this 
year NOAA's National Hurricane Center has launched a variety of new and 
improved products and services. NOAA also coordinates closely with 
other Federal agencies (such as FEMA) and States to help provide real-
time weather information to the public.
    Question 3. The administration's budget calls for the elimination 
of the National Estuarine Research Reserve System (NERRS), a savings of 
$23 million. Congress created this program in 1972 because of the 
national interest in the coasts, both economically and environmentally.
    The research reserves are critical coastal areas for protecting 
communities against storms and floods, especially along the eastern 
seaboard and Gulf of Mexico. $625 million in property damages were 
avoided during Hurricane Sandy due to coastal wetlands, including ten 
reserves, protecting property and over 1,300 miles of roads.
    Research reserves also provide protection and management of 
estuaries that keep commercial and recreational fishermen successful 
around the country. The NERRS contributes billions of dollars to the 
shellfish and seafood industries in States with a reserve and tens of 
billions of dollars to ocean-dependent industries along our coasts.
    The NERRS is matched by State funds annually, leveraging an average 
of $22 million in additional funds each year. If NERRS funding is 
eliminated, we will lose the great local return on investment and use 
of public land that happens when NOAA invests in reserves.
    Please provide an explanation of how the benefits of NERRS 
spending--including contributions to coastal industries, protecting the 
safety of coastal communities, and avoiding significant property damage 
or emergency spending--were accounted for in the decision to eliminate 
NERRS funding.
    Answer. The President's fiscal year 2018 Budget prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
To meet these goals, some difficult decisions needed to be made, 
including the decision to terminate Federal funds for this program.
    Question 4a. NOAA Navigation Services Offices provide critical 
information to commercial vessels and other boat owners. For example, 
ships coming into and out of the Port of Wilmington and other ports 
around the country rely on the Office of Coast Survey to provide up-to-
date charts and survey information. These ships also rely on the 
Physical Oceanographic Real-Time System (PORTS) for tide and current 
information. The budget for PORTS, like much of Navigation Services, 
has not increased in years.
    With ships becoming larger, more ships transiting the Delaware 
River and other waterways throughout the country, and more demands on 
PORTS from commercial and military vessels, how do you expect to keep 
up with the needs of users?
    Answer. NOAA will continue to support PORTS in existing locations 
within the resources requested in the President's budget. When the 
program reaches the limits of its capacity to support new systems, NOAA 
will continue to maintain services in areas that PORTS already serves 
while exploring alternative cost share models with future partner 
entities that wish to initiate operations in new locations.
    Question 4b. Given these increased pressures, do you expect a 
future budget increase for Navigation Services?
    Answer. The fiscal year 2018 President's budget does not request a 
budget increase for NOAA navigation services. Future budget requests 
will balance all mission requirements, administration priorities, and 
fiscal policy across the Federal Government.
                   u.s. patent and trademark office.
    Question 5. When we met, we discussed the importance of a strong 
patent system to a dynamic and growing economy. I note that the budget 
for the U.S. Patent and Trademark Office (USPTO) states that the 
biggest problem facing the patent system is abusive litigation. While 
abusive litigation should not be tolerated, I think there are other, 
greater problems.
    Would you agree that the design of USPTO's post-issuance review 
proceedings, which lead to a devaluation of patent rights that has hurt 
small businesses, is also a major challenge that needs to be addressed?
    Answer. While I cannot agree that USPTO's post-issuance review 
proceedings have hurt small businesses, I do agree that a challenge 
exists for USPTO to listen carefully to its stakeholders for input and 
continue to work to further refine those proceedings to ensure fairness 
and effectiveness for all parties while meeting all congressional 
mandates. USPTO's post-issuance proceedings were established by 
Congress to serve as less costly and more efficient alternatives to 
litigation on issues of patentability. As a general matter, I believe 
they have worked well, consistent with Congressional intent. USPTO has 
continually sought input from its stakeholders and made changes through 
rules to improve the proceedings when appropriate and will continue to 
do so.
    Question 6a. Recently, there has been an effort at the Department 
of Commerce to set up new ``backbone'' shared services for human 
resources, information technology, acquisitions, and procurement for 
all of Commerce's bureaus, referred to as ``Enterprise Services.'' I 
understand how this consolidation effort might lead to better services 
and lower costs for many of the bureaus within the Department of 
Commerce, especially the smaller ones, and I commend efforts to find 
cost savings. That said, I have yet to see a business case being made 
for the USPTO's participation because it is primarily a fee-funded 
agency that has unique needs compared to the rest of Commerce and has 
recently spent significant resources in upgrading many of its systems. 
In fact, during the March 2017 meeting of the Patent Public Advisory 
Committee (``PPAC''), a representative for the USPTO stated that the 
USPTO was being asked to contribute as much as $13 million during 
fiscal year 2017 to Enterprise Services and also represented that the 
USPTO did not anticipate being able to opt in to any of these newly-
created services. I note that this same concern and a request for a 
cost-benefit analysis was expressed by members of the House Judiciary 
Committee in a letter sent in July 2016 and signed by Chairman Bob 
Goodlatte, Darrell Issa, Chairman of the Subcommittee on Intellectual 
Property as well as Representatives Mimi Walters, Zoe Lofgren, and 
Suzan DelBene.
    Can you explain the rationale for having the USPTO contribute to 
the ongoing setup costs of enterprise services given that the USPTO has 
represented that they do not currently plan on using these services?
    Answer. The USPTO's leadership has supported the Enterprise 
Services initiative and currently uses a number of its services 
(outlined at the end of this paragraph). USPTO leadership has voted to 
fund and support shared services during official Departmental 
Management Council votes, supported enterprise services through past 
payments into the initiative, and reiterated its support through 
written confirmation of its continued participation. The USPTO, akin to 
all Bureaus, faces administrative costs which are necessary for the 
USPTO to achieve its mission. However, with appropriate investments, 
the USPTO will be empowered to minimize its operating costs for 
administrative functions by over $47 million annually (34 percent 
reduction) in fiscal year 2022. To realize decreased operating costs, 
the USPTO must pay for its proportionate share of the investment. 
Additionally, USPTO already uses outside providers for a significant 
portion of its back office functions, including HR. This can be seen in 
the USPTO's current active procurement request for an outside vendor to 
support their HR needs.
    As for the provision of services, the USPTO is currently using 
several of ES' services. ES manages the Department's human resources 
management system, and is in the process of transitioning Learning 
Management System (LMS) Support from NTIS to continue providing support 
after the current expiration in November, 2017. The USPTO is a user of 
both those systems. Further, the USPTO is one of the largest users of 
the Department's strategic sourcing program, which ES manages, having 
avoided an estimated $9.3M in costs in fiscal year 2016 alone by 
leveraging the buying power of the entire Department.
    Question 6b. Does Commerce have any analysis demonstrating whether 
and to what extent the USPTO is projected to have a net savings of 
money under Enterprise Services? If the answer is yes, please provide a 
copy of that analysis.
    Answer. Prior to the launch of the Enterprise Services initiative, 
a comprehensive current state assessment was conducted to evaluate a 
case for implementing a shared services model at the Department of 
Commerce. As part of this assessment, focus groups, customer 
satisfaction surveys, and stakeholder interviews were conducted across 
all Bureaus. The current state assessment revealed significant 
challenges across the Department in three main areas: mission focus, 
performance management, and customer experience.
    The current state assessment revealed the qualitative benefits each 
Bureau at the DOC could realize through implementing a shared services 
model. Additionally, a detailed financial analysis was conducted to 
examine the financial impact to transitioning the Bureaus to ES. The 
analysis contained data from all Bureaus, and demonstrated a compelling 
case for the Department to move to a multi-function, enterprise-wide 
shared services model by revealing both significant operational cost 
savings and increased indirect cost avoidance. Although inputs from all 
Bureaus were incorporated into the qualitative and quantitative aspects 
of the business case, individual cases, for each Bureau, were not 
crafted at the time.
    ES continues to refine its analysis as ES learns new information 
and developments occur. ES conducted a financial analysis of the 7-year 
plan for the USPTO portion of the Enterprise Services Project. Based on 
ES' financial analysis, with the USPTO's participation, the Department 
expects a 34 percent operating cost savings in fiscal year 2022. By 
contributing the necessary investment costs to participate in ES, the 
USPTO could see more than $47 million in annual operating cost savings 
by fiscal year 2022, enabling the USPTO to pass these savings on to 
their customers through reduced fees charged for Patent and Trade Mark 
services. As such, it is in the best interest of the USPTO's customers 
and stakeholders for the USPTO to participate in ES. The following 
graph and table show the expected ROI analysis specific to the USPTO.




--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year
               Category *                      2016            2017            2018            2019            2020            2021            2022
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Operating Costs.................    $146,679,000    $145,394,000    $144,122,000    $142,860,000    $141,609,000    $140,370,000    $139,200,000
Future Operating Costs..................     146,679,000     144,608,000     125,687,000      99,230,000      95,876,000      92,889,000      91,600,000
Investment Costs........................         816,000       7,640,000      12,112,000       5,038,000       3,833,000       1,750,000         950,000
Operating Cost Variance.................               0        -786,000     -18,435,000     -43,630,000     -45,733,000     -47,481,000     -47,503,000
Operating + Investment Cost Variance....         816,000       6,854,000      -6,323,000     -38,592,000     -41,900,000     -45,731,000     -46,650,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Costs are adjusted for inflation and discounted to NPV.


    There are several specific instances where ES provides a compelling 
financial benefit to the USPTO. For example, the USPTO has shared its 
current costs for PAR processing and talent acquisition services, at a 
unit cost of $102 and $3,952, respectively. This is higher than the 
actual prices charged by ES. For PAR processing, ES charges $78.22/PAR 
for its current customers (NOAA and six of the smaller Commerce 
bureaus). All bureaus are charged the same unit cost, so the USPTO 
would realize 23 percent savings per PAR by transitioning to ES. The HR 
services provider has also contractually committed to bringing this 
cost down over the next 3 years, increasing the savings to the USPTO. 
At the USPTO's fiscal year 2016 PAR count of 71,000, the USPTO would 
save a minimum of $1.7M annually by participating in ES PAR Processing 
services.
    Although ES has not fully finalized pricing for Talent Acquisition, 
ES is close to finalizing a price range with the HR services provider. 
This range would offer the USPTO savings over its current Talent 
Acquisition costs. Additionally, ES anticipates that the USPTO will 
realize the savings (on average, 15 percent estimated operational cost 
savings) for each of the mission-enabling services provided.
    Question 6c. During the PPAC meeting, the USPTO representative 
stated that the USPTO was paying a ``pro rata'' share of standing up 
Commerce's shared services. How is this ``pro rata'' rate determined 
(i.e., is it based on overall budget, relative size of the bureau, or 
some other factor?), and what are the contributions-to-date of the 
other bureaus, and from what source? How much is the Department of 
Commerce itself contributing?
    Answer. Enterprise Services is ultimately managed by the Enterprise 
Services Governance Board (ESGB). The Governance Board for ES provides 
active oversight and governance of ES and makes key project-wide 
decisions. It is comprised of a senior leadership team, consisting of 
the lead operational managers of each Bureau, including the USPTO. The 
current USPTO member is the Acting Deputy Director of the USPTO. All ES 
scope and service decisions are made by the ESGB.
    One of the areas in which the ESGB managed Enterprise Services was 
with the chargeback methodology for the Bureaus. The ESGB determined 
that all Bureaus would pay a proportionate share of the initial stand 
up of Enterprise Services, after which time--once service delivery 
begins--each Bureau pays only for those services it receives. In 
evaluating these different methodologies and determining this approach, 
it was determined that investment costs should be proportionately 
supported by Bureaus through an FTE proration, while specific 
transactions would be billed their specific costs as negotiated through 
competitive vendor arrangements.
    This was agreed-upon as the best method to allocate investment 
costs that span the plethora of future ES services. Specifically, the 
ESGB agreed to utilize an FTE-based method for the investment costs of 
Enterprise Services. The USPTO employs 12,800 FTE of the Department's 
49,000 FTE, therefore the USPTO amounts to 29.1 percent of the 
Department's ES investment costs. The USPTO's portion of investment 
costs are detailed below.
    However, service costs are charged on a usage basis. HR 
transactions delivered by ES are charged using a per-transaction cost. 
Acquisition services are charged as a small percentage of dollars 
obligated relative to each specific transaction; the percentage charged 
by ES is actually 1.5-5 percent below comparative service providers. 
Nevertheless, all costs associated with ES are directly aligned to 
supporting the administrative functions and ultimately minimizing the 
costs that each Bureau will pay.
    With respect to support, the USPTO, akin to its sister Bureaus, 
agreed in fiscal year 2015 that it would help fund the initial 
investment needed to stand up ES, with the understanding that the USPTO 
would eventually transition to ES. As such, the USPTO contributed $7.6M 
in fiscal year 2016 to help stand-up ES operations and receive 
services. Then, in fiscal year 2017, the USPTO was asked by the 
Department to contribute $12 million to fund its fair share of ES 
investment needs; the USPTO has already paid $4.3M of that $12 million.
    Specifically, as the 3rd quarter Enterprise Services Quarterly 
Report To the Senate Committee on Appropriations, Subcommittee on 
Commerce, Justice, Science (CJS) and Related Agencies shows, Bureaus 
have paid the following into the Working Capital Fund and Direct Bill:

                                                                  WORKING CAPITAL FUND
                                                                    [$ in Thousands]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Fiscal Year  Fiscal Year                                         Fiscal Year
                             BUREAU                                2016 WCF     2017 WCF      First        Second       Third         2017
                                                                    Total        Total     Quarter YTD  Quarter YTD  Quarter YTD    Balance
---------------------------------------------------------------------------------------------------------------------------------------------
Office of the Secretary........................................          162        1,493           65          715        1,239          254
ITA............................................................          816        1,241          211          458          601          640
EDA............................................................          107          195           38           66           92          103
NTIA...........................................................          253          463           97          159          218          245
NTIS...........................................................          100          251           23           50           75          176
CENSUS.........................................................        5,197        8,799        2,619        3,502        4,651        4,148
ESA/BEA........................................................          257          461          103          163          228          233
NOAA...........................................................        6,674       10,599        2,916        4,239        5,629        4,970
NIST...........................................................        1,811        2,860          672        1,169        1,563        1,297
MBDA...........................................................           37           62           12           23           31           31
BIS............................................................          210          407           75          123          170          237
OIG............................................................           93          151           36           55           75           76
PTO............................................................        6,359        9,704        2,554        3,764        5,040        4,664
WCF............................................................        3,000  ...........  ...........  ...........  ...........  ...........
                                                                ----------------------------------------------------------------------------------------
    TOTAL......................................................       25,076       36,686        9,421       14,486       19,612       17,074
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                     DIRECT BILL\1\
                                                                    [$ in Thousands]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Fiscal Year  Fiscal Year                                         Fiscal Year
                             BUREAU                              2016 Direct  2017 Direct     First        Second       Third         2017
                                                                  Bill Total   Bill Total    Quarter      Quarter      Quarter      Balance
---------------------------------------------------------------------------------------------------------------------------------------------
Office of the Secretary........................................           58          368            0           42            0          326
ITA............................................................           80          627            0            0            0          627
EDA............................................................           13           92            0           13            0           79
NTIA...........................................................           29          199            0           29            0          170
NTIS...........................................................           10           36            0            0            0           36
CENSUS.........................................................          391        2,695            0          329            0        2,366
ESA/BEA........................................................           32          137            0            0            0          137
NOAA...........................................................          829        5,797            0            0            0        5,797
NIST...........................................................          205          975            0            0            0          975
MBDA...........................................................            4           28            0            0            0           28
BIS............................................................           25          177            0            0            0          177
OIG............................................................           11           35            0            0            0           35
PTO............................................................          816        2,413            0          816            0        1,597
                                                                ----------------------------------------------------------------------------------------
    TOTAL......................................................        2,503       13,579            0        1,229            0       12,350
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Fiscal Year 2017 Direct Bill totals are subject to change depending on when service delivery begins for each Bureau, and on of final pricing from
  Accenture Federal Services for those services that have not yet begun.

      
                                 ______
                                 
              Questions Submitted by Senator Brian Schatz
                          noaa tsunami program
    Question. The President's fiscal year 2018 budget request decimates 
tsunami preparedness: no funding for the National Tsunami Hazard 
Mitigation Program; elimination of funding for DART buoy moorings; and 
an $11 million cut to the tsunami program itself. The budget further 
acknowledges that ``Warnings will still be issued; however timeliness 
and accuracy will be reduced.'' Please explain the rationale for these 
severe cuts to a program that provides critical support for the 
National Weather Service's core mission: saving lives and protecting 
property.
    Answer. The Department's fiscal year 2018 request prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
NOAA will prioritize NWS functions that provide the observational 
infrastructure, capabilities, and staff to produce timely and accurate 
weather forecasts and warnings. These tsunami reductions reduce the 
scope and operations of observations platforms and the tsunami program, 
while maintaining most core functions. Without DART data, tsunami 
amplitude forecasts will be derived from seismic analysis. This 
termination is anticipated to have a 20 percent or greater impact on 
the accuracy, certainty, and timeliness of NOAA's tsunami watches and 
warnings.
    The proposed budget ends National Tsunami Hazard Mitigation Program 
(NTHMP) grants to States. However, NOAA will maintain $8.5 million in 
other tsunami program components to continue watches, warnings and 
advisories from a single national center. In addition, NWS and NTHMP 
would continue the TsunamiReady program at a reduced level. 
TsunamiReady is a voluntary community recognition program that promotes 
tsunami hazard preparedness as an active collaboration among Federal, 
State, and local emergency management agencies, community leaders, and 
the public.
    NOAA also anticipates working in close coordination with other 
Federal agencies, such as the U.S. Geological Survey, to continue 
monitoring and detection efforts.
                         noaa coastal programs
    Question. The President's budget eliminates funding for the 
National Estuarine Research Reserve System, and Coastal Zone Management 
Act implementation. These programs offer Federal support for States to 
manage their coastal areas better against hazards such as flooding and 
storms. As a fellow coastal resident, why are you cutting coastal 
management funds when they are most needed?
    Answer. The President's fiscal year 2018 Budget prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
To meet these goals, some difficult decisions needed to be made, 
including the decision to terminate these programs.
    The President's fiscal year 2018 Budget recommends reducing funding 
support and other assistance for external grants on a government-wide 
basis.
    NOAA stands ready to provide technical assistance to States on 
coastal management and other issues, as requested.
                       noaa science and research
    Question. The President's budget proposes severe cuts to NOAA's 
science and research budget by eliminating funding for the Sea Grant 
program, cutting $30 million from atmospheric research, and cutting $16 
million from Oceanic Exploration and Research. These cuts jeopardize 
America's worldwide scientific leadership, and threaten the research 
advances that lead to better forecasts. Please explain the rationale 
for cutting support for the research and science that help to drive our 
economy.
    Answer. The administrations 's 2018 Budget prioritizes rebuilding 
the military and making critical investments in the Nation's security. 
It also identifies the savings and efficiencies needed to keep the 
Nation on a responsible fiscal path. To meet these goals, some 
difficult decisions needed to be made. The administration prioritized 
programs that provide a good return for the taxpayer, as well as those 
that serve the most critical functions, while consolidating or 
eliminating programs.
    NOAA will preserve many of its climate and weather research 
functions, including observations and modeling at NOAA laboratories, 
which advance NOAA's forecasting capabilities.
    The Department of Commerce's fiscal year 2018 request of $19.4 
million for Ocean Exploration and Research (OER) is consistent with the 
funding levels requested for the OER program in each of the past 3 
years. With these funds, NOAA and OER will continue to carry out 
missions to evaluate new marine resources, participate in the Extended 
Continental Shelf (ECS) mapping effort, and explore uncharted and 
little-known ocean areas. Reductions in the number of missions and 
mapping efforts will occur, however NOAA will prioritize and focus on 
the activities that provide the most support for the Nation's security, 
economy, and environmental health.
                           nist cybersecurity
    Question. The NIST Cybersecurity Framework is the global standard 
for cybersecurity risk management and is a key focal point of the 
President's recent executive order on Strengthening the Cybersecurity 
of Federal Networks and Critical Infrastructure. The Department of 
Commerce's budget request reduces funding for cybersecurity activities 
at NIST by $5.9M and 24 FTEs. Rather than eliminate, would you support 
reallocating these funds to the implementation of the NIST 
Cybersecurity Framework?
    Answer. Cybersecurity remains a priority for NIST and the 
Department of Commerce. The fiscal year 2018 budget request reflects 
the administration's priority to rebuild the military, make critical 
investments in the Nation's security, and keep the Nation on a 
responsible fiscal path. NIST plans to continue to support the 
Cybersecurity Framework and related activities by reprioritizing it's 
cybersecurity resources within the funding levels requested in the 
budget.
                             census funding
    Question. The President's fiscal year 2018 budget request, while a 
2 percent increase over fiscal year 2017 Omnibus level, is nearly $140 
million less than the fiscal year 2017 request. At the same time, the 
Census Bureau has decided to cancel two of the three end-to-end test 
sites set for fiscal year 2018, one in Washington State and one in West 
Virginia. This comes after the Census Bureau cancelled field test 
operations in Puerto Rico, South Dakota, and Washington State in fiscal 
year 2017. By cancelling testing in a diverse cross section of the 
country, you risk undercounting significant portions of America, 
including rural, Tribal, and minority communities. How will the Census 
Bureau ensure that all Americans are counted accurately without 
adequate testing? If the cancellations are related to the reduced 
fiscal year 2018 budget request, would you support reallocating funds 
to ensure adequate testing for the 2020 Census?
    Answer. The Department of Commerce leadership is fully committed to 
a fair, accurate, and complete 2020 Census, and this is the number one 
goal of the Census Bureau. The modernization effort allows the Census 
Bureau to prioritize its resources to the parts of the country with 
higher degrees of nonresponding households to ensure they are counted. 
The fiscal year 2018 request supports this commitment.
    The 2020 Census has already extensively tested throughout the 
decade, more so than the 2010 Census. The Census Bureau plan for 
modernizing the 2020 Census was to start early in the decade on an 
ambitious research and testing program that would allow them to 
research many potential innovations for the 2020 Census and test their 
impact on Census operations and data quality through a series of major 
field tests. The Census Bureau has conducted these tests throughout the 
decade, with major field tests of various operations in 2014, 2015, 
2016, and 2017, and is about to begin the final major field test, the 
2018 End-to-End Census Test. The Bureau is confident in its ability to 
successfully conduct this test, as it has learned invaluable lessons 
from each test in the robust series of field test throughout the 
decade. As the Census Bureau prepares for the 2018 End-to-End Census 
Test, it continues to refine operations and systems based on these 
tests.
    The aspects of the design that are helping to ensure data accuracy 
in the 2020 Census have been and will continue to be tested. The 2017 
Census Test included and the 2018 End-to-End Census Test and the 2020 
Census will include a re-interview component, which will help to ensure 
quality in the data collected by our field staff. The Census Bureau has 
brought in private sector experts in the area of fraud detection to 
ensure utmost data accuracy amongst all responses and response modes. 
Additionally, the 2020 Census nationwide partnership program, which is 
already underway, is vital to counting everyone, as it will have 
trusted community partners nationwide encouraging their community 
members on our behalf to respond to the 2020 Census.
    For the 2018 End-to-End Census Test, the final major field test 
before the 2020 Census, the Census Bureau has made decisions that will 
prioritize the readiness and testing of its integrated system-of-
systems in the field in a Census-like environment. The lessons learned 
from how these systems interact with each other, with the operations 
being tested, and, where relevant, with the field staff and residents 
in the test sites, will be invaluable to finalizing the operational 
plan and putting the finishing refinements on the systems in advance of 
the 2020 Census.
    The 2018 End-to-End Census Test begins in August 2017 with the 
address canvassing operation. The plan for the address canvassing 
portion of the 2018 End-to-End Census Test includes three sites: 
Bluefield-Beckley-Oak Hill, West Virginia; Providence County, Rhode 
Island; and Pierce-County Washington. Collectively these three diverse 
sites will help the Census Bureau gain invaluable experience in 
conducting the challenging process of building the address list across 
a wide area of physical geography, housing structures, and residence 
types.
    Following the conclusion of address canvassing operations in early 
October 2017, the Census Bureau plans to proceed with the remaining 
operations in scope for the 2018 End-to-End Census Test in Providence 
County, Rhode Island. Peak operations will commence in March 2018. 
Providence County is an ideal microcosm of the 2020 Census experience, 
as its demographics mirror those of the Nation. As such, the Census 
Bureau remains confident that the 2018 End-to-End Census Test is 
sufficiently robust to test the systems that support the 24 key 
operations that will must assessed in a field test prior to the 2020 
Census. The systems supporting 11 operations that are not included in 
the 2018 End-to-End Census Test will be thoroughly tested in fiscal 
year 2018 and fiscal year 2019 prior to their deployment..
                                 ______
                                 
            Questions Submitted by Senator Joe Manchin, III
     collaboration with other federal agencies on the rural economy
    Question 1a. Mr. Secretary, the administration has proposed a major 
re-organization of USDA's Rural Development portfolio, a move that 
would have considerable impact on rural housing and community 
development. Many of the Senators on this Subcommittee recently wrote 
to the President expressing our concern about this re-organization. 
Similarly, within the Department of Commerce, EDA, NIST/MEP, MBDA are 
being eliminated. These programs provide significant support to rural 
development and its industrial base. At the rural levels, many 
communities utilize funds from HUD, DOC, USDA, Treasury, private 
philanthropy to implement projects and programs.
    Is DOC working with the States and affected communities to fill the 
gap when its funding goes away, from vital efforts such as those at 
EDA?
    Answer. There is a plethora of State, local and regional programs 
and initiatives, including foundations and other public-private 
partnerships, with resources to support these types of development 
efforts. Moreover, the President's plan to boost the entire economy 
through regulatory reform, unleashing energy resources, trade reform 
and tax cuts for businesses and individuals will result in a greater 
amount of resources for these entities to invest in such efforts.
    Question 1b. At the Secretarial level, do you work with Secretary 
Carson, Purdue and others to assess the best ways for the 
administration, as a whole, to effectively serve rural and underserved 
areas meet their housing, community development, and infrastructure 
needs?
    Answer. The Department of Commerce works with Secretary Carson, 
Purdue and others through the President's Interagency Task Force on 
Agriculture and Rural Prosperity. The purpose of the task force is to 
identify legislative, regulatory, and policy changes to promote in 
rural America agriculture, economic development, job growth, 
infrastructure improvements, technological innovation, energy security, 
and quality of life, including changes.
                           weather readiness
    Question 2a. In June 2016, West Virginia suffered a historic and 
catastrophic flooding event in the southern part of my State. Our 
emergency manager reported that the warning from the National Weather 
Service came about an hour before the deluge started. We had whole 
towns submerged, shoppers were stranded in malls. There is video on the 
Internet of houses floating off their foundations and being carried 
down creeks. I am concerned that the cuts to the NOAA satellite budgets 
may make us more vulnerable. For many years, the Congress has worked 
with NOAA to re-build the polar-orbiting constellation that supports 
the Nation's weather enterprise.
    Additionally, our Armed Services worldwide absolutely depend on 
NOAA satellites to support their strategic and tactical operations and 
would be tremendously harmed if there was a gap in coverage from the 
geostationary and the JPSS polar-orbiting satellites.
    What is the rationale for reducing the funding for NOAA's polar 
satellites and potentially placing U.S. citizens at home, and our 
military men and women here and abroad to gaps in coverage?
    Answer. The President's fiscal year 2018 budget prioritizes 
programs that support national security, public safety, and economic 
opportunity, while returning the country to a sustainable fiscal path. 
The fiscal year 2018 requested funding level will allow for the 
continued development of the Polar Follow On (PFO) satellite 
instruments in a manner that maintains the cost efficient synergies 
with the JPSS-2 satellite. Concurrently, NOAA is conducting an overall 
re-plan of the PFO program that seeks additional cost efficiencies, 
manages system technical risks, and leverages additional partnerships.
    Question 2b. Please provide a detailed explanation of the increased 
risk of a gap in coverage and the increased costs that the U.S. 
citizens will need to accept with this revised launch plan for the JPSS 
2, 3, & 4 satellites.
    Answer. JPSS-2 development has been given priority in the fiscal 
year 2018 President's Budget, and its launch date will not be affected 
by the budget request. The fiscal year 2018 President's Budget provides 
funding to continue JPSS-3 and -4 instrument development. Any potential 
effects on the risk of a gap or additional life cycle costs will be 
evaluated as part of the re-plan of the PFO program.
    Question 2c. What is the basis for depending on commercial 
interests to provide data when no commercial entity has yet 
demonstrated that they are capable of meeting the government's 
operational weather data requirements?
    Answer. Given that no commercial entity has yet demonstrated the 
capability of meeting NOAA's operational space-based weather data 
requirements, NOAA is not depending on commercial sources of space-
based data to meet operational requirements.
    The NOAA Commercial Space Policy calls for NOAA to undertake 
demonstration projects as appropriate to assess the viability of 
assimilating commercial data into NOAA meteorological models. The 
NESDIS Commercial Space Activities Assessment Process calls for these 
demonstration projects to be completed prior to any decision to 
purchase commercial data for operational use, and includes the 
following data evaluation criteria: Value (Concept legitimacy, 
accuracy, quality, timeliness, reliability, and validity), Cost 
Effectiveness (cost/value balance, availability, sustainability and 
support) and Exploitability (comprehensiveness, security and downstream 
use).
    Over the past 2 years, NOAA has actively engaged with the 
commercial sector to understand how NOAA could benefit from the 
capability of industry to deploy and operate radio occultation (RO) 
instruments on their own satellites. The commercial data NOAA has 
purchased thus far through Round 1 of the Commercial Weather Data Pilot 
(CWDP) demonstrates that the commercial sector can provide RO data, 
although Round 1 has not provided the quality or quantity of data 
necessary to support a decision on procuring commercial data for 
operational use.
    Evolving vendor capabilities indicate that there is value in a 
second CWDP round of RO data purchases and evaluation. Round 2 will 
extend the work of the CWDP Round 1 by levying more stringent 
requirements upon vendors (e.g. data security, timeliness, 
availability) with the aim of assessing the potential for use in 
numerical weather prediction.
    In addition to RO, NOAA will continue to explore the utility of 
other commercial data as the industry develops while also maturing 
NOAA's internal capability to use diverse commercial data sources 
operationally.
    Question 2d. What types of coordination do you and Secretary Mattis 
have in place to ensure that our military men and women's global 
weather satellite data needs are taken into account when the funding 
and planning timeliness for NOAA satellites are being finalized?
    Answer. NOAA does not have direct coordination with the Secretary 
of Defense as the spaced-based weather mission for the Department of 
Defense (DoD) is delegated to the U.S. Air Force (USAF). On January 9, 
2017 the NOAA Administrator and the Secretary of the Air Force signed a 
Memorandum of Agreement (MOA) for Interagency Cooperation on Collection 
of Space-Space Based Environmental Monitoring (SBEM) Data (see BELOW).










In addition, there are two primary ways that NOAA supports the DoD:
    1.  NOAA negotiates with global partners for free and timely access 
to weather data. Through NOAA's international partnerships, the DoD can 
leverage data from international counterpart agency satellite systems. 
Through coordinating groups such as the Coordination Group on 
Meteorological Satellites (CGMS), NOAA and counterpart agencies seek to 
further technical compatibility among systems to enhance usefulness of 
data from the different systems. NOAA meets with USAF counterparts 
prior to and following the CGMS annual conference to ensure we are 
representing DoD's interests.
    2.  Where it is most cost effective to leverage NOAA infrastructure 
and capabilities to support DoD-specific requirements, we enter into 
cost-reimbursable agreements. For example, we have a Memorandum of 
Agreement, updated most recently on February 21, 2017, with the USAF to 
operate their Defense Meteorological Satellite Program (DMSP) weather 
satellites from the NOAA Satellite Operations Facility (NSOF) on a cost 
reimbursable basis. Under other reimbursable agreements, data from NOAA 
satellites such as JPSS can be processed and forwarded to the USAF for 
their use.
                     west virginia aerospace sector
    Question 3a. Over the past decade, my State of West Virginia has 
developed an aerospace center of excellence. The NASA Independent 
Verification and Validation Facility, NOAA Consolidated Backup for its 
operational satellites, West Virginia University supports NASA 
Heliophysics and work on NASA RESTORE-L missions, commercial interests 
in the State such as Orbital ATK, Lockheed Martin and others that 
contribute to the Nation's technological edge. I call this assemblage 
an ``ecosystem of technology'' that supports each other, the region, 
and the Nation.
    I am disappointed that the administration's budget is moving some 
of the RESTORE-L activities from university-based academic laboratories 
in West Virginia to DoD's Defense Advanced Research Projects Agency, 
and the cancellation of five NASA Earth Science missions.
    Do you have any insight into the administration's decisionmaking 
there?
    Answer. The Department of Commerce does not have insight into the 
specifics of the DoD or NASA budget requests and their potential impact 
to the RESTORE-L programs.
    Question 3b. What is the impact to NOAA's wider customer and user 
base with the loss of these missions?
    Answer. NOAA is not planning to reduce funding to the NOAA 
Consolidated Backup in West Virginia, therefore no impact to our 
customer base is anticipated.
             nist manufacturing extension partnership (mep)
    Question 4a. The DOC Budget reduces Federal support for NIST's 
Manufacturing Extension Partnership (MEP) program. West Virginia 
University administers the West Virginia MEP. Over the past 5 years, 
through the WV MEP, West Virginia University has delivered 231 
assistance projects to West Virginia manufacturers, resulting in $32 
million in new sales; $153 million in retained sales; and have helped 
create or retain 1,700 jobs.
    For a rural and geographically challenged State like West Virginia 
with limited opportunities to diversify or augment our economic base, 
loss of this program and EDA assistance programs is extremely difficult 
to accept.
    What was the rationale for reducing the MEP's Federal support?
    Answer. The fiscal year 2018 budget prioritizes rebuilding the 
military, making critical investments in the Nation's security, and 
providing the savings and efficiencies needed to keep the Nation on a 
responsible fiscal path. Many difficult decisions were necessary with a 
limited amount of funding to go around. We believe that some MEP 
Centers will transition to non-Federal revenue sources, which was 
originally intended when the program was established. MEP has community 
support for funding from several partnerships that they have with local 
institutions and from the private sector.
    Question 4b. Did the administration look across the landscape and 
determine how States and communities would survive with the loss of 
these critical funds?
    Answer. The fiscal year 2018 budget prioritizes rebuilding the 
military, making critical investments in the Nation's security, and 
providing the savings and efficiencies needed to keep the Nation on a 
responsible fiscal path. Many difficult decisions were necessary with a 
limited amount of funding to go around. We believe that MEP Centers 
will transition to non-Federal revenue sources, which was originally 
intended when the program was established. MEP has community support 
for funding from several partnerships that they have with local 
institutions and from the private sector.
                preserving america's aerospace advantage
    Question 5. Secretary Ross, the U.S. currently has a competitive 
edge over our international counterparts in the area of developing and 
launching civil space research and operational satellites. I believe it 
is in our interest to maintain this edge. However, looking at the 
details and fine print of the administration's budget request, there 
are places where we are ceding that national edge to foreign 
competitors.
    The Department does an excellent job monitoring the Nation's 
economic progress.
    Does the Department monitor and report on the health of the U.S. 
aerospace sector and the contributions that our universities, private 
space industries, and government activities contribute to the Nation's 
technological and economic advantage?
    Answer. The Bureau of Industry and Security (BIS) is currently 
assessing the health and competitiveness of the U.S. rocket propulsion 
industry in partnership with NASA and the Joint Army Navy NASA Air 
Force (JANNAF) Interagency Propulsion Committee. Survey results will be 
released in the fourth quarter of 2017.
    Between 2012 and 2014, BIS utilized its authority delegated under 
the Defense Production Act of 1950, as amended (50 U.S.C. app. Sec. 
2155) to design, distribute, and collect surveys of commercial 
companies, universities, non-profit organizations, and U.S. Government 
agencies with equities in the U.S. space industrial base. The request 
to assess the space sector was made by the United States Air Force, 
National Aeronautics and Space Administration (NASA), and the National 
Reconnaissance Office (NRO). The assessment, which included surveying 
approximately 3,800 organizations, sought to map the U.S. space 
industrial base supply chain in unprecedented detail and included the 
products and services the respondents provided, their critical 
suppliers, their financial health and investment expenditures, and many 
other topics. In 2014 BIS completed its data collection for the Air 
Force, NASA and NRO and developed three reports based on survey 
responses, independent research, and field interviews: U.S. Export 
Controls and the U.S. Space Industrial Base; Small Businesses and the 
U.S. Space Industrial Base; and Employment Challenges Facing the U.S. 
Space Industrial Base. These reports may be found at https://
www.bis.doc.gov/dib.
    In addition, BIS administers the Transportation and Related 
Equipment Technical Advisory Committee, made up of more than 35 
industry leaders, and specialists and technicians from the Departments 
of Commerce, State, Defense, Energy, and the intelligence community 
with expertise in gas turbine engines, airframes and overall aircraft 
integration, avionics, accelerometers, gyros and inertial navigations. 
This committee also has a working group dedicated to the space and 
satellite sector. The mission of this committee is to advise the 
Department of Commerce with respect to technical specifications and 
policy relating to those matters that are of concern to the Department; 
worldwide availability of products and systems, including the quantity, 
quality, and use of production technology; export licensing procedures 
that affect the level of export controls applicable to any goods, 
software, or technology; revisions of the Commerce Control List, 
including proposed revisions of multilateral controls in which the 
United States participates; the issuance of regulations; and any other 
questions relating to actions designed to carry out the policy set 
forth in Section 3(2)(A) of the Export Administration, as amended.
                             market access
    Question 6. Secretary Ross, you mention in your testimony that the 
United States currently has a $700 billion trade deficit and is the top 
importer in the world. This indicates to me that there is much room for 
improvement and that we, the U.S. Government, needs to work on securing 
greater market access overseas for American businesses.
    Now that the President has indicated his interest in renegotiating 
the North American Free Trade Agreement (NAFTA), we have an opportunity 
to make the necessary improvements to this monumental trade agreement 
to change this balance and increase market access that will benefit our 
businesses--particularly small businesses.
    Although you state in your testimony that the International Trade 
Administration (ITA) will continue to focus on small and medium-sized 
businesses, I remain concerned by the proposed cuts to the 
International Trade Administration's trade promotion related 
activities--the exact programs that help American businesses take 
advantage of overseas markets. This doesn't seem like the right time to 
be cutting these programs.
    In light of the proposed cuts to the International Trade 
Administration, how does the Department of Commerce intend to support 
small business exports to overseas markets, both in NAFTA and non-NAFTA 
countries, so that we can decrease our $700 billion trade deficit?
    Answer. The budget request prioritizes and protects investments in 
core Government functions across Commerce that benefit small 
businesses, including enforcing laws that promote fair and secure 
trade, and realigning our export promotion and market access work. We 
are also addressing administration priorities that seek to reduce trade 
deficits.
    The ITA will strengthen its trade enforcement and compliance 
functions to ensure American businesses get fair opportunities in the 
global marketplace while enhancing the efficiency of export promotion 
and trade analysis activities. The proposed increase for Enforcement & 
Compliance will support staffing and associated costs to expand 
investigations and threat management activities. To complement these 
efforts, the ITA is developing and implementing plans to transform its 
operations to strengthen outcomes, improve efficiency, and meet trade 
and investment priorities. The ITA's transformational actions will be 
rooted in maximizing the delivery of the organization's value to 
clients, providing timely and actionable information and service to 
U.S. business (especially SMEs), eliminating or reducing lower-priority 
functions and activities, strengthening higher priority activities, and 
modernizing information management.
    Effective use of digital technology and building a digital client 
engagement capability will enable the ITA to serve its existing U.S. 
small business customers more efficiently as well as increase the 
number of those assisted. By developing online content, self-help tools 
and content marketing campaigns based on this expertise, we can provide 
more timely and actionable market intelligence that informs businesses 
of all sizes about exporting basics. In addition, public and private-
sector partnerships can be further leveraged to market online content 
and broaden our reach to new clients.
    As a result of these productivity enhancements, we will enable our 
field staff to focus their time and efforts on clients needing higher 
value-added services and expand the number of small business exporters 
we assist.
    Across the Department, pursuant to presidential directives, we are 
taking a close look at our existing trade agreements and considering 
ways to modernize or improve them to ensure a level playing field for 
U.S. businesses. We also continue to work with our clients, 
representing both large and small businesses, to strengthen 
capabilities in export markets where the U.S. already has a significant 
advantage.
                           trade enforcement
    Question 7a. Secretary Ross, first of all, I want to thank you for 
your commitment to increased trade enforcement measures. As we face 
countries that continue to undercut our workers, commit trade fraud, 
and evade duties, we owe it to our businesses to do everything within 
our ability to help level the playing field.
    Unfair trade practices by foreign countries have cost my State of 
West Virginia dearly, with many steel and aluminum companies struggling 
to even maintain operations. That being said, I was particularly 
pleased to hear today that you intend to instruct your Department to 
self-initiate trade cases against bad actors. I am encouraged by these 
efforts and what they will mean for my State moving forward.
    With the increased government-wide focus on trade enforcement 
actions, are you coordinating with other government agencies, such as 
the Department of Homeland Security or Department of Justice, to ensure 
synchronized efforts?
    Answer. Commerce, through the International Trade Administration's 
Enforcement and Compliance (E&C) unit, works very closely with U.S. 
Customs and Border Protection (CBP), Immigration and Customs 
Enforcement (ICE) and the Department of Justice (Justice) to facilitate 
accurate AD/CVD assessment and enforce AD/CVD laws. E&C also serves as 
the main conduit between Commerce and CBP/ICE on fraud and evasion 
matters related to AD/CVD proceedings. To that end, the three agencies 
meet regularly to address open issues and explore avenues of further 
coordination and collaboration.
    E&C makes full use of its statutory authority to provide 
information to CBP and ICE where any of the three agencies uncovers 
information that indicates possible fraud or evasion of the AD/CVD 
laws. When such investigations lead to prosecution, the U.S. Attorney's 
office may also request E&C's assistance in understanding the 
importance of the AD/CVD laws to ensuring a level playing field for 
U.S. companies and/or to serve as an expert witness at trial. As a 
result of this coordination, CBP and ICE also provide information to 
E&C that they have uncovered and believe might be relevant to an 
ongoing AD/CVD proceeding. In such cases, E&C places the information on 
the case record, allowing for parties to the proceeding to review and 
comment on the relevance of the information. As a result of this 
coordination, E&C has been able to identify and address circumvention 
(under E&C's statutes) in several cases, bringing the circumventing 
merchandise under the scope of the relevant AD/CVD order.
    Question 7b. If not, how will you increase coordination moving 
forward so that we can better combat unfair trade practices?
    Answer. Commerce is continually elevating its efforts to counter 
duty evasion, fraud and circumvention by working proactively and 
collaboratively with CBP, ICE and Justice to identify and address 
fraudulent activity. Specifically, Commerce, CBP and ICE share 
extensive information on AD/CVD matters to combat the increasingly 
complex strategies employed by foreign parties attempting to evade 
payment of AD/CVD. Additionally, Commerce works closely with Justice to 
support prosecutions resulting from CBP or ICE investigations. This 
broadened partnership has brought together the diverse set of knowledge 
and skills from the relevant agencies, resulting in fines, felony 
indictments and imprisonment of offending parties. Commerce is also 
working closely with CBP and Justice on the implementation AD/CVD 
enforcement plan required pursuant to the President's March 31, 2017 
Executive Order on ``Establishing Enhanced Collection and Enforcement 
of Antidumping and Countervailing Duties and Violations of Trade and 
Customs Laws.''
                         wireless connectivity
    Question 8. Wireless connectivity continues to be an important 
driver of our digital economy.
    And I strongly support NTIA's [the National Telecommunications and 
Information Administration] efforts to make additional spectrum 
available for commercial wireless broadband in rural areas.
    However, as the physical infrastructure of next generation 
broadband technologies grows smaller and the digital infrastructure 
that supports it grows larger, broadband deployment in rural America 
will continue to face unique and difficult challenges.
    I remain concerned that the digital divide that currently exists in 
West Virginia will continue to grow into the next generation of 
wireless services.
    Will you commit to focusing additional attention--at both NTIA and 
the Commerce Spectrum Management Advisory Committee--towards studying 
and expediting the introduction of new broadband services in rural 
areas?
    Answer. Expanding broadband to unserved and underserved areas of 
the country, including rural areas, remains an NTIA priority. NTIA will 
continue its efforts to ensure that access to sufficient spectrum is 
not a constraint on the growth of broadband services, including in 
rural areas. A key to this is NTIA's Office of Spectrum Management and 
Institute for Telecommunication Sciences sustained efforts to study, 
develop and test tools and methodologies for the expansion of spectrum 
sharing to help efficiently and effectively meet escalating demand for 
access to this critical resource. As part of a multi-faceted 
collaborative approach to addressing diverse spectrum challenges, NTIA 
will continue to rely upon recommendations and other input it receives 
from both government and non-government sources (for example the 
Commerce Spectrum Management Advisory Committee, a Federal Advisory 
Committee consisting of experts from outside the Federal Government to 
offer expertise and perspectives on reforms to enable new technologies 
and services).
    In addition, NTIA is committed to promoting broadband deployment 
and adoption in rural areas through its Broadband Programs. NTIA 
continues to take action through its BroadbandUSA program, which it 
launched in January 2015 to respond to demand from communities seeking 
to improve broadband connectivity. BroadbandUSA assists, educates, and 
convenes government, community, and industry leaders working to advance 
broadband initiatives and policy, offering support to help them 
overcome the unique challenges hindering their investment in broadband 
infrastructure and digital inclusion. BroadbandUSA serves as a trusted 
and neutral strategic advisor, working with public and private sector 
partners to assess local broadband needs and gaps; identify possible 
funding and other resources; and plan network infrastructure projects 
and digital inclusion programs. The centerpiece of BroadbandUSA is its 
technical assistance team, which provides individualized and group 
technical assistance to State, local, nonprofit, and industry leaders 
interested in planning, funding, and implementing broadband 
initiatives. As of July 30, 2017, BroadbandUSA has provided direct, 
individualized technical assistance to 200 customers in 38 States. More 
than 60 percent of these communities are considered rural. Overall, 
through direct technical assistance and workshops, BroadbandUSA has 
supported more than 800 communities.
    BroadbandUSA also ensures that it specifically reaches rural 
communities and providers through webinars and targeted workshops held 
around the country. This year, our monthly Practical Broadband 
Conversations webinar series included webinars on the role of broadband 
in economic development, what programs increase rural broadband 
adoption, and how broadband is transforming agriculture. NTIA is also 
planning to hold technical assistance workshops in Des Moines, Iowa on 
August 21, 2017, and in Charleston, West Virginia on September 19, 
2017.
                        departmental leadership
    Question 9a. Secretary Ross, the movie ``Home Alone'' seems to 
capture your situation right now. As I look across the Department of 
Commerce, the vacancies affect Constitutionally mandated functions of 
government and the very fabric and backbone of the Nation's ability to 
protect its intellectual property. As a Senator from a rural State with 
populations dispersed in geographically isolated areas, I need some 
reassurance from you that you have the management
    What is the timeline for the White House to announce a Deputy 
Secretary and other positions that require Senate-confirmation?
    Answer. The White House has already announced several Department of 
Commerce nominees that are currently making their way through the 
Senate confirmation process as follows:
  --Michael Platt for Assistant Secretary for Legislative and 
        Intergovernmental Affairs has had his hearing and is awaiting a 
        floor vote.
  --Peter Davidson for General Counsel has had his hearing and is in 
        markup.
  --Mira Ricardel for Under Secretary for Industry and Security has had 
        her hearing and is awaiting a floor vote.
  --Richard Ashooh for Assistant Secretary for Export Administration 
        has had his hearing and is awaiting a floor vote.
  --Karen Dunn Kelley for Under Secretary for Economic Affairs has had 
        her hearing and is in markup.
  --Gilbert Kaplan for Under Secretary for International Trade is 
        scheduled for a hearing on Thursday, August 3rd.
  --Elizabeth (Erin) Walsh for Director General of the United States 
        and Foreign Commercial Service and Assistant Secretary for 
        Global Markets has had both of her required committee hearings 
        and is in markup.
  --David Redl for Assistant Secretary for Communications and 
        Information has had his hearing and is in markup.
    In coordination with the Commerce Department's Office of White 
House Liaison and the White House Presidential Personnel Office, I have 
recommended and the President has approved potential nominees for 
nearly all Senate-confirmed positions within the Department.
    With respect to the Deputy Secretary position and the other 
remaining Senate-confirmed positions that have not yet been announced 
by the White House, the timing of the announcement process varies for 
each specific potential nominee. Therefore, there is no specific 
timeline that can be established. The White House will typically make 
public announcements for Senate-confirmed positions after the potential 
nominees have fulfilled all necessary paperwork and cleared all vetting 
requirements.
    Question 9b. What are your plans for bringing permanent leadership 
at NOAA, NIST, NTIA Census, Patent and Trademark Office and additional 
senior staff to assist you?
    Answer. Since being sworn-in, I have worked with the Commerce 
Department's Office of White House Liaison and the White House 
Presidential Personnel Office to identify exceptionally qualified 
candidates to recommend to the President for these Senate-confirmed 
positions and to fill other senior staff positions. The White House has 
already announced the President's nominee for NTIA, and I am confident 
that further announcements will be forthcoming regarding the other 
bureaus for which you have inquired.
    Question 9c. In the interim, what is your strategy for ensuring 
that adequate management and oversight is being given to the Bureaus in 
the Department?
    Answer. Until all Senate-confirmed positions are filled, I have 
great confidence that the staff who are currently filling those roles 
on an interim basis are providing the needed management and oversight 
to ensure the Department is running effectively. At my direction, my 
senior staff has been continually monitoring each bureau to ensure that 
the President's agenda is on-track for the good of the American people.
                                robotics
    Question 10a. Mr. Secretary, in your written testimony you 
acknowledged your responsibility to ensure that our Nation's taxpayer 
dollars are targeted to those programs and projects that will grow our 
economy and create a pro-growth economy. One such area where the 
Federal Government is making great inroads in this regard is in 
advancing robotics and assistive technology. In my view, this is an 
area that is critical to increasing the United States' capability in 
manufacturing, developing a new space servicing and repair industry, 
and extending applications to national defense. In short, I believe 
there are great economic gains to be achieved in accelerating our 
Nation's focus in domestic, space and defense robotics, and creating 
new associated commercial sectors.
    For example, the West Virginia Robotic Technology Center is 
developing technology to support the first robotic satellite servicing 
mission (Restore-L). The end goal of this mission is to prove 
satellites can be robotically serviced and repaired in-space. The 
innovative technology and capability created for this mission will be 
directly handed over to the commercial sector to utilize.
    Do you agree that advanced robotics, such as innovative 
transportation technology, robotic drilling and extraction services 
such as those used in the energy sector, and robotics in space 
applications have a positive impact on the U.S. economy and commercial 
sector?
    Answer. Yes. Many recent studies have shown evidence that advanced 
robotics have the potential to spur productivity gains in many 
applications and across many sectors. For example, a 2017 study by 
McKinsey Global Institute (A Future That Works: Automation, Employment, 
and Productivity, Jan 2017) estimated that advances in automation--
including not only robotics but associated artificial intelligence and 
machine learning technologies--could supplement the human workforce to 
drive global GDP growth between 0.8 and 1.4 percent. NIST has programs 
that will help make this a reality by ensuring that ``collaborative 
robots'' that work closely with people are safe and effective. Beyond 
economic impacts, robotics technologies can increase safety and quality 
of life. NIST has a program to support the development and use of 
emergency response robots, which can help firefighters, bomb 
technicians, and urban search and rescue specialists do their work 
while avoiding extreme hazards. NIST works with first responders and 
robot manufacturers to develop quantitative ways to measure whether 
robots are capable and reliable enough to perform mission tasks.
    Question 10b. Do you agree that robotic technology is playing an 
increasing role in U.S. space and defense applications such as 
satellite refueling and space exploration focused on advancing our 
leadership and national security?
    Answer. Yes. Many recent studies have shown evidence that advanced 
robotics have the potential to spur productivity gains in many 
applications and across many sectors. For example, a 2017 study by 
McKinsey Global Institute (A Future That Works: Automation, Employment, 
and Productivity, Jan 2017) estimated that advances in automation--
including not only robotics but associated artificial intelligence and 
machine learning technologies--could supplement the human workforce to 
drive global GDP growth between 0.8 and 1.4 percent. NIST has programs 
that will help make this a reality by ensuring that ``collaborative 
robots'' that work closely with people are safe and effective. Beyond 
economic impacts, robotics technologies can increase safety and quality 
of life. NIST has a program to support the development and use of 
emergency response robots, which can help firefighters, bomb 
technicians, and urban search and rescue specialists do their work 
while avoiding extreme hazards. NIST works with first responders and 
robot manufacturers to develop quantitative ways to measure whether 
robots are capable and reliable enough to perform mission tasks.
    Question 10c. Do you believe that it is important to maintain the 
schedule and funding for the Restore L mission and maintain the 
Commerce Department's mission statement to create job growth and 
promote economic development?
    Answer. It is the priority of the President to strengthen 
investment in National Security and Defense. As for the specifics of 
your question the Department of Commerce does not have insight into the 
specifics of the DoD or NASA budget requests, and their potential 
impact to the RESTORE-L programs.

                          SUBCOMMITTEE RECESS

    Senator Shelby. This subcommittee now will stand in recess 
until next Tuesday, June 13, at 10 a.m., when we take the 
testimony of the Attorney General of the United States, Jeff 
Sessions.
    This subcommittee is adjourned.
    Secretary Ross. Thank you very much, Mr. Chairman.
    [Whereupon, at 11:36 a.m., Thursday, June 8, the 
subcommittee was recessed, to reconvene at 10 a.m., Tuesday, 
June 13.]