assessment until November 1998, the Committee lauds the decision to

begin working toward meeting its legislative charge. As a practical

matter, the ARC is a temporary commission. After December 1999, the

Commission must make a determination on whether or not Amtrak can meet

the financial goals outlined in the ARAA. If the ARC determines these

goals cannot be met, they must then submit a restructuring plan, and

Amtrak must submit a liquidation plan.

The Committee's recommended funding level, $450,000, will allow the

ARC to decisively move forward in performing its tasks and

responsibilities. These funds are available for 2 years, through

September 30, 2000. The Committee is aware that the members of the ARC

have been selected based on their technical qualifications, professional

standing, and demonstrated expertise in areas relevant to the needs of

the Council. Therefore, there should be no need for outside consultant

services, and the Committee has included a provision precluding the use

of appropriated funds for such services.

Route closure and realignment recommendations. --Under current

authority, the ARC can recommend improvements or changes in law that it

believes to be necessary or appropriate, including recommending that the

Amtrak Board of Directors close down or consolidate unprofitable routes.

In addition, the sunset trigger in the ARAA directs the ARC to notify

the President and the appropriate congressional committees if Amtrak's

business performance prevents the railroad from meeting its financial

goals, or if the ARC determines that continued Federal operating

subsidies will be required after December 2, 2002. In order to help

Amtrak work toward meeting its financial goals and to decrease reliance

on Federal subsidies, the ARC shall identify Amtrak routes which are

candidates for closure or realignment, and report to the Congress

annually, as required under the ARAA, on these recommendations.

The process for determining candidate routes for closure or

realignment shall be based on Amtrak's own performance rankings, which

incorporate information on each route's fully allocated costs and

ridership on core intercity passenger service. A May 1998 General

Accounting Office report entitled ``Financial Performance of Amtrak's

Routes'' (GAO/RCED 98 151) examined the operating ratios for all of

Amtrak's 40 intercity routes during fiscal year 1997, and ranked the

routes by performance. The only profitable route on Amtrak's system is

the New York to Washington, DC Metroliner. All other Amtrak routes lose

money on a per passenger basis, from a low of $11 lost per passenger

trip to a high of $284 lost per passenger. The average systemwide per

passenger loss is $47. Though the Committee recognizes that the issue of

connectivity is important to any passenger rail system, it is imperative

that these losses be stemmed by judicious reductions and

rationalizations. The Committee has determined that making

recommendations for route closures or realignments is a task that is

complementary to the Amtrak Reform Council's mission, and is well within

the scope of the ARC's statutory responsibilities.

General Provisions

Political and Presidential appointees .--The Committee has included

a provision in the bill (sec. 305), which is similar to general

provisions that have been included in previous appropriations acts,

which limits the number of political and Presidential appointees within

the Department of Transportation. The Committee is recommending that the

ceiling for fiscal year 1999 be 91 personnel.

Advisory committees .--The Committee has retained a general

provision (sec. 327) which would limit the amount of funds that could be

used for the expenses of advisory committees utilized by the Department

of Transportation. The limitation specified is $1,000,000.

Rebates, refunds, and incentive payments .--The Department receives

funds from various Government programs at different time intervals (that

is, weekly, monthly, quarterly). For example, under the General Services

Administration's Travel Management Center [TMC] Program, rebate checks

received from the travel contractor are distributed monthly to each

element of the Department in proportion to net domestic airline sales

arranged by the contractor. Past expenditures have to be analyzed to

determine the proper sources to refund which can be a time-consuming

process. The staff time and cost associated with the precise accounting

for each such refund is prohibitive. To alleviate the need to

specifically identify the source for each repayment the Committee has

included language (sec. 333) that allows a fair and sensible allocation

of the rebates and miscellaneous and other funds.

Many repayments are received late in the fourth quarter of the fiscal

year or in the first quarter of the new fiscal year and thus are not

effectively available to the agency for new obligations. For example,

rebate checks for September travel are received from the travel

management contractor in October. To maintain good financial management

incentives and avoid injudicious commitments, this provision would

provide specific authority to use rebated funds for program purposes

beyond the fiscal year of the appropriation charged for the initial

payment.

Other

User fees .--The Committee has included bill language, included in

previous appropriations bills, which permits the Office of the Secretary

to continue to credit to this account $1,000,000 in user fees.

Reductions in fiscal year 1998 appropriations .--In fiscal year

1998, reductions were made to a number of accounts due to limitations or

reductions imposed in various areas, such as the Transportation

Administration Services Center and the Presidential line-item veto. In

the Senate Committee report, each account head shows the amount

appropriated in Public Law 105 66 before the various reductions were

made. The table below depicts the amount of funds appropriated for each

of the accounts, and the reductions required.

CHANGES IN FISCAL YEAR 1998 DEPARTMENT OF TRANSPORTATION APPROPRIATIONS

Account Public Law 105 66 President's line-item veto Public Law 105 119 Net appropriation

Appropriations GP 320 TASC Appropriations transfer from DOS

Office of the Secretary: $61,000,000 -$343,000 $60,657,000

---------------- ------------- ---------------------------------- ----------- ---------------

Subtotal -363,000

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

U.S. Coast Guard: Operating expenses (includes $300,000,000 for defense-related activities) 2,715,400,000 -529,000 $63,000 2,714,934,000

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

Federal Aviation Administration: Operations 5,301,934,000 -939,000 1,554,000 5,302,549,000

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

Federal Highway Administration: (552,266,000) ( -610,000) (551,656,000)

---------------- ------------- ---------------------------------- ----------- ---------------

Subtotal -657,000

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

National Highway Traffic Safety Administration: 74,901,000 -81,000 74,820,000

---------------- ------------- ---------------------------------- ----------- ---------------

Subtotal -178,000

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

Federal Railroad Administration: 20,290,000 -29,000 20,261,000

---------------- ------------- ---------------------------------- ----------- ---------------

Subtotal -49,000 -5,280,000

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

Federal Transit Administration: 45,738,000 -124,000 45,614,000

---------------- ------------- ---------------------------------- ----------- ---------------

Subtotal -124,000 -500,000

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

St. Lawrence Seaway Development Corporation: Operations and maintenance 11,200,000 -7,000 11,193,000

Research and Special Programs Administration: 28,450,000 -48,000 -450,000 27,952,000

---------------- ------------- ---------------------------------- ----------- ---------------

Subtotal -92,000 -450,000

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

Office of the Inspector General: Salaries and expenses 42,000,000 -59,000 41,941,000

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

Bureau of Transportation Statistics\1\ (25,000,000) ( -47,000) (24,953,000)

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

Surface Transportation Board: Salaries and expenses 13,853,000 -3,000 13,850,000

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

Total reductions, Department of Transportation -3,000,000 -6,230,000 1,617,000

\1\BTS reductions in parentheses included under Federal-aid highways.

U.S. COAST GUARD

SUMMARY OF FISCAL YEAR 1999 PROGRAM

The U.S. Coast Guard, as it is known today, was established on

January 28, 1915, through the merger of the Revenue Cutter Service and

the Lifesaving Service. In 1939, the U.S. Lighthouse Service was

transferred to the Coast Guard, followed by the Bureau of Marine

Inspection and Navigation in 1942. The Coast Guard has as its primary

responsibilities the enforcement of all applicable Federal laws on the

high seas and waters subject to the jurisdiction of the United States;

promotion of safety of life and property at sea; assistance to

navigation; protection of the marine environment; and maintenance of a

state of readiness to function as a specialized service in the Navy in

time of war (14 U.S.C. 1, 2).

The Committee recommends a total program level of $3,959,757,000 for

the activities of the Coast Guard in fiscal year 1999. The following

table summarizes the Committee's recommendations:

[In thousands of dollars]

Program Fiscal year-- Committee recommendations

1998 enacted 1999 estimate

Operating expenses\1\\2\ 2,715,400 2,771,705 2,761,603

Acquisition, construction, and improvements\3\\4\ 397,850 442,773 388,693

Environmental compliance and restoration 21,000 21,000 21,000

Alteration of bridges 17,000 20,000

Retired pay 653,196 684,000 684,000

Reserve training 67,000 67,000 67,000

Research, development, test, and evaluation 19,000 18,300 17,461

Boat safety 35,000

-------------- --------------- -----------

Total 3,925,446 4,004,778 3,959,757

\1\Excludes reduction for TASC pursuant to section 320 of Public Law 105 66; excludes transfer from Department of State pursuant to Public Law 105 119.

\2\Fiscal year 1998 enacted and fiscal year 1999 Committee recommended amount include $300,000,000 in defense discretionary funding; fiscal year 1999 estimate includes $309,000,000, both amounts for national security activities of the Coast Guard and scored against budget function 050 (defense).

\3\Includes $9,000,000 for fiscal year 1998 and $1,000,000 for fiscal year 1999 in proposed asset sales.

\4\Fiscal year 1999 estimate includes $35,000,000 in proposed navigation assistance tax fees.

OPERATING EXPENSES

General Trust Total

Appropriations, 1998\1\ $2,690,400,000 $25,000,000 $2,715,400,000

Budget estimate, 1999\2\ 2,746,705,000 25,000,000 2,771,705,000

Committee recommendation\3\ 2,741,603,000 25,000,000 2,761,603,000

Secretary's discretionary transfer authority 60,000,000 60,000,000

---------------- ------------- ----------------

Total available funds 2,793,603,000 25,000,000 2,821,603,000

\1\Includes $300,000,000 for national security activities scored against budget function 050 (defense). Excludes reductions for TASC pursuant to section 320 of Public Law 105 66; excludes transfer from Department of State pursuant to Public Law 105 119.

\2\Includes $309,000,000 for national security activities scored against budget function 050 (defense).

\3\Includes $300,000,000 for national security activities scored against budget function 050 (defense).

The ``Operating expenses'' appropriation provides funds for the

operation and maintenance of multipurpose vessels, aircraft, and shore

units strategically located along the coasts and inland waterways of the

United States and in selected areas overseas.

The program activities of this appropriation fall into the following

categories:

Search and rescue. --One of its earliest and most traditional

missions, the Coast Guard maintains a nationwide system of boats,

aircraft, cutters, and rescue coordination centers on 24-hour alert.

Aids to navigation. --To help mariners determine their location and

avoid accidents, the Coast Guard maintains a network of manned and

unmanned aids to navigation along our coasts and on our inland

waterways, and operates radio stations in the United States and abroad

to serve the needs of the armed services and marine and air commerce.

Marine safety. --The Coast Guard insures compliance with Federal

statutes and regulations designed to improve safety in the merchant

marine industry and operates a recreational boating safety program.

Marine environmental protection. --The primary objectives of this

program are to minimize the dangers of marine pollution and to assure

the safety of U.S. ports and waterways.

Enforcement of laws and treaties. --The Coast Guard is the principal

maritime enforcement agency with regard to Federal laws on the navigable

waters of the United States and the high seas, including fisheries, drug

smuggling, illegal immigration, and hijacking of vessels.

Ice operations. --In the Arctic and Antarctic, Coast Guard

icebreakers escort supply ships, support research activities and

Department of Defense operations, survey uncharted waters, and collect

scientific data. The Coast Guard also assists commercial vessels through

ice-covered waters.

Defense readiness. --During peacetime the Coast Guard maintains an

effective state of military preparedness to operate as a service in the

Navy in time of war or national emergency at the direction of the

President. As such the Coast Guard has primary responsibility for the

security of ports, waterways, and navigable waters up to 200 miles

offshore.

COMMITTEE FUNDING RECOMMENDATION

The Committee recommendation for Coast Guard operating expenses is

$2,761,603,000, including $25,000,000 from the oilspill liability trust

fund and $300,000,000 from function 050 for the Coast Guard

defense-related activities.

The Committee notes that the cost per average FTE for the Coast Guard

in the most recent complete fiscal year is $65,560. The anticipated cost

per average FTE for fiscal year 1998 is $69,630. The Committee

recommendation provides sufficient resources for an average FTE cost

greater than that anticipated for fiscal year 1998 at staffing levels

above current levels. The Committee also notes that the 5-year FTE

experience indicates that the Coast Guard tends to lag behind requested

FTE levels. The Committee encourages the Coast Guard to strive to reduce

the ratio of officers to enlisted and to report to the Committee by

March 1, 1999, on the officer-to-enlisted ratio over the past 10 years

with comparable officer-to-enlisted ratios from the other services.

[In thousands of dollars]

Fiscal year 1998 enacted\1\ Budget request Committee recommendation

Personnel resources: 1,246,767 1,292,406 1,290,029

----------------------------- ---------------- --------------------------

Total, personnel resources 1,702,298 1,762,471 1,752,673

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

Operating funds and unit level maintenance: 114,009 109,563 109,563

District commands:

1st district 37,711 36,831 36,831

7th district 46,400 47,532 47,532

8th district 29,894 30,044 30,044

9th district 18,205 18,583 18,583

13th district 13,749 13,887 13,887

14th district 9,838 10,655 10,655

17th district 20,693 19,805 20,693

----------------------------- ---------------- --------------------------

Total, operating funds and unit level maintenance 617,530 619,593 619,289

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

Depot level maintenance: 154,261 152,391 152,391

----------------------------- ---------------- --------------------------

Total, depot level maintenance 395,106 389,641 389,641

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

Total appropriation 2,714,934 2,771,705 2,761,603

\1\Includes reduction of $529,000,000 for TASC pursuant to section 320 of Public Law 105 66; includes transfer of $63,000,000 from Department of State pursuant to Public Law 105 119.

Note.--Fiscal year 1998 enacted and fiscal year 1999 request include $300,000,000 and $309,000,000, respectively, for national security activities, budget function 050 (defense).

PERSONNEL RESOURCES

Military pay and benefits. --The Coast Guard is to be commended for

the progress that has been made over the past several years to

streamline and increase the efficiency of the uniformed services.

Staffing continues to lag behind recruiting goals, in part because of

the competition for qualified individuals that is endemic to the current

robust state of the economy. However, the 5-year FTE utilization

experience of the Coast Guard indicates that they continue to run behind

requested levels and accordingly, the Committee recommends a reduction

in the FTE levels and a commensurate reduction in the military pay and

benefits request. The Committee also notes that the streamlining effort

has not yet been fully reflected throughout the ranks and trusts that

the Commandant will continue to pursue the streamlining efforts of his

predecessor and seek a ratio of officers to enlisted personnel

consistent with the other armed services and the unique nature of the

Coast Guard's multiple mission requirements.

International engagement in Caribbean. --The Committee has not

included funding for the mobile, ship-based support and training buoy

tender platform as requested in the budget, without prejudice. Although

this may be a worthwhile foreign policy initiative, the budgetary

constraints already facing the Coast Guard make such an addition to the

Coast Guard's mission profile an unwarranted diversion of operating

funding from other critical missions.

Military health care .--The Committee has provided $121,800,000 for

military health care, an increase of $2,399,000 over fiscal year 1998

levels.

The Committee supports the Alaska Federal Health Care Partnership's

proposal to develop an Alaska-wide telemedicine network to provide

access to health services and health education information in remote

areas of Alaska to the more than 200,000 Federal beneficiaries now

living or stationed in Alaska, including more than 3,000 Coast Guard

beneficiaries. The partnership, a joint effort of the Coast Guard,

Department of Defense, Department of Veterans Affairs, and the Indian

Health Service will create 235 telemedicine health care access sites at

Coast Guard, DOD, VA and IHS clinical facilities throughout Alaska

linking remote installations and villages with tertiary health

facilities located in Anchorage and Fairbanks over a 4-year period and

should serve as a model for the use of telemedicine technology for the

delivery of health care services and health care education in remote

settings. The Committee has provided funding for the Coast Guard to

participate in the partnership's Alaska telemedicine project.

Training and education .--The recruiting and training support

category has several subsets, including recruiting, training centers

(Yorktown, VA; Petaluma, CA; and Cape May, NJ), the Coast Guard Academy,

and professional training and education. The Committee has provided

$65,012,000 consistent with the budget request. The Committee believes

that the Coast Guard has done a good job in trying to hold costs down,

and though its budget for professional training and education is

sizable, further cuts are not necessary at this time and would undermine

the Coast Guard's efforts to recruit and train to meet personnel needs

in a streamlined Coast Guard.

OPERATING FUNDS AND UNIT LEVEL MAINTENANCE

BILL LANGUAGE

National security .--The Committee's recommendation includes

$300,000,000 from the defense function for Coast Guard support of

national security activities. The Coast Guard plays a key role in

support of military missions under the U.S. Atlantic and Southern

Commands in support of drug interdiction missions, refugee and

immigration support, and enforcement and joint military training.

The Coast Guard is a cost-effective force which is multimissioned.

Its ships, aircraft, shore units, and people have four primary roles:

maritime safety, maritime law enforcement, marine environmental

protection, and national defense. These roles are complementary and

contribute to the Coast Guard's unique niche within the national

security community. The value of the Coast Guard forces and their

mission experience was clearly evident by their active participation in

Operations Desert Shield/Storm in the Persian Gulf, and more recently,

in Operation Desert Thunder in the Persian Gulf and Operations

Restore/Uphold Democracy in Haiti. The Coast Guard is one of the five

Armed Forces, and is a full partner on the joint national security team.

To be a credible partner, the Coast Guard must maintain a high state of

operational readiness. Many parts of the Coast Guard's budget contain

funding requests that, if cut, would severely impair the Coast Guard's

operational readiness and, therefore, its ability to meet national

security commitments.

GENERAL PROVISIONS

Vessel traffic safety fairway, Santa Barbara/San Francisco .--The

Committee has included a general provision (sec. 313) that would

prohibit funds to plan, finalize, or implement regulations establishing

a vessel traffic safety fairway which is less than 5 miles wide between

the Santa Barbara vessel traffic separation scheme and the San Francisco

vessel traffic separation scheme. This language has been included in

previous appropriations bills.

OTHER

Mackinaw .--The bill includes funding for continued operation and

maintenance of the icebreaking cutter Mackinaw during fiscal year 1999.

Drug interdiction activities .--The Committee has provided the

requested $369,000,000 for the war on drugs. It should be left to the

Commandant's discretion how the drug interdiction activities funding is

to be distributed; however, the Committee believes that this area is

perfectly suited for application of performance measures and evaluation

of program impacts.

Global marine distress signal system [GMDSS] .--The Committee is

concerned with potential problems with the implementation of the global

marine distress signal system [GMDSS]. The Federal Communications

Commission [FCC] has adopted regulations that will require GMDSS units

to be installed on all vessels, including fishing vessels, over 300

tons. This is intended to replace ship-to-ship emergency communications

with an automated ship-to-shore system. Several problems exist with the

GMDSS concept as it would be applied.

One of the most serious problems would be that vessels carrying GMDSS

equipment would no longer be required to monitor other communications

channels including those most frequently used by fishing vessels. Most

successful rescues are performed by other nearby commercial vessels, and

under this new regime, the distressed vessel would have to rely on the

Coast Guard to direct nearby vessels to the incident site. This will

cause an unnecessary delay in response and could substantially degrade

current levels of safety.

Other potential problems include: (1) whether new shore-based

stations will provide adequate listening coverage for all parts of the

Bering Sea; (2) cost per vessel of installing the new equipment; (3)

lack of adequate training for system operators; and (4) whether

manufacturers of GMDSS equipment are capable of supplying the number of

units that will be required by February 1, 1999. The Committee directs

the Commandant to ensure that the Coast Guard's mission to ensure the

safety of life at sea is not compromised by the new GMDSS requirements

and to report to the House and Senate Committees on Appropriations on

what actions, if any, are necessary to provide this assurance.

Marine Fire and Safety Association .--The Committee remains

supportive of efforts by the Marine Fire and Safety Association [MFSA]

to provide specialized firefighting training and maintain an oilspill

response contingency plan for the Columbia River. The Committee

encourages the Secretary to provide funding for MFSA consistent with the

authorization and directs the Secretary to provide $178,000 to continue

efforts by the nonprofit organization comprised of numerous fire

departments on both sides of the Columbia River. The funding will be

utilized to provide specialized communications, firefighting training

and equipment, and to implement the oilspill response contingency plan

for the Columbia River.

Seasonal rescue capability. --The Committee remains concerned about

maintaining critically important Coast Guard air rescue response time in

the New York City area during the peak boating season. Therefore, the

Committee directs the Coast Guard to establish and operate a seasonal

air facility in the New York City area to provide helicopter rescue

capability during the period April 15 through October 15.

Container Inspection Program. --The Committee recommended funding

level includes $1,191,000 for the restoration of the Container

Inspection Program. The Committee rejects the request to downsize the

Coast Guard container inspection work force and has provided sufficient

funds to maintain the inspector work force at the fiscal year 1998

level. Testimony by the Commandant before the Committee indicates that,

while the Coast Guard proposal is presented as a reduction solely to the

container inspector work force, the actual effect of the reduction would

be to cut personnel who are devoting a majority of their time to other

critical marine safety functions at the direction of the captain of the

port. As such, the proposed reduction, rather than serving to reduce

only container inspections, would effectively reduce numerous other

critical marine safety activities.

These activities include the inspection of tankships and waterfront

facilities handling crude oil, petroleum products and hazardous

materials for compliance with safety and pollution prevention

regulations; the inspection of foreign flag vessels under the Port State

Control Program for protection of U.S. ports and harbors from the

hazards posed by poorly maintained and unseaworthy vessels; the timely

response to pollution incidents and oversight of pollution cleanup

activities; and the performance of periodic shoreside and waterborne

harbor patrols for law enforcement, port risk assessment and

identification of potential safety hazards. The Committee continues to

view the Container Inspection Program as a critical marine safety task

and an important component of the Coast Guard's port safety mission,

especially in light of the continued growth in containerized cargo

entering U.S. ports.

Ballast water management program .--The Committee recommended

funding level includes $2,000,000 to implement the nationwide ballast

water management program.

USCG Station Rockaway, NY .--The Committee directs the Coast Guard

to provide, on a quarterly basis, a report to the Appropriations

Committees on the status of a readiness and manpower capability of the

Rockaway, NY, U.S. Coast Guard Station.

Secretary's discretionary transfer authority .--The bill includes

language that permits the Secretary to transfer up to $60,000,000 from

Federal Aviation Administration operations to Coast Guard operating

expenses for the purpose of providing additional funds for drug

interdiction activities.

User fees .--The bill includes language that prohibits the planning,

finalization, or implementation of any regulation that would promulgate

new maritime user fees not specifically authorized by law after the date

of enactment of this act.

ACQUISITION, CONSTRUCTION, AND IMPROVEMENTS

General Trust Total

Appropriations, 1998\1\ $377,850,000 $20,000,000 $397,850,000

Budget estimate, 1999\2\ 422,773,000 20,000,000 442,773,000

Committee recommendation 366,093,000 20,000,000 388,693,000

\1\Includes $9,000,000 in asset sales.

\2\Includes $1,000,000 in asset sales and $35,000,000 in proposed navigation assistance fees.

This appropriation provides for the major acquisition, construction,

and improvement of vessels, aircraft, shore units, and aids to

navigation operated and maintained by the Coast Guard. Currently, the

Coast Guard has in operation approximately 250 cutters, ranging in size

from 65-foot tugs to 399-foot polar icebreakers, more than 2,000 boats,

and an inventory of more than 200 helicopters and fixed-wing aircraft.

The Coast Guard also operates approximately 600 stations, support and

supply centers, communications facilities, and other shore units. The

Coast Guard provides over 48,000 navigational aids--buoys, fixed aids,

lighthouses, and radio navigational stations.

COMMITTEE RECOMMENDATION

The following table summarizes the Committee's programmatic

recommendations:

[In thousands of dollars]

Fiscal year 1998 enacted\1\ Fiscal year 1999 estimate\2\ Committee recommendation

Vessels 212,100 269,573 215,473

Aircraft 25,800 37,131 46,131

Other equipment 44,650 33,969 35,389

Shore facilities and aids to navigation 68,300 53,650 43,250

Personnel and related support 47,000 48,450 48,450

----------------------------- ------------------------------ --------------------------

Total 397,850 442,773 388,693

\1\Includes $9,000,000 in asset sales.

\2\Includes $1,000,000 in asset sales and $35,000,000 in proposed navigation assistance fees.

VESSELS

The Committee recommends $215,473,000 for vessel acquisition and

improvement. The projected allocation of these funds is shown in the

table below:

VESSELS

[In thousands of dollars]

Fiscal year 1999 estimate Committee recommendation

Acquire vessels and equipment: 105,000 45,000

Stern loading buoy boat replacement 11,773 11,773

Survey and design--cutters and boats 500 500

Mackinaw replacement 4,000

ATS 1 conversion 10,000 14,000

Surface search radar replacement project 12,900 12,900

Deepwater capability replacement 28,000 28,000

Repair, renovate, or improve existing vessels and small boats: 3,800 3,800

--------------------------- --------------------------

Total (new program level) 269,573 215,473

Seagoing buoy tender [WLB] replacement .--The Coast Guard is in the

process of replacing its 50-year-old fleet of seagoing buoy tenders with

up to 16 new tenders. The request of $105,000,000 for fiscal year 1999

is to pay for the award of two ships under the full production contract,

and to cover additional costs such as spare parts, logistics, and

project administration. According to recent estimates, the contract for

the first two production ships will be awarded no earlier than the

fourth quarter of fiscal year 1998.

The Committee continues to be concerned about the growing carryover

balances in this program. Last year, the Committee maintained the

funding in this account pursuant to the belief that the Coast Guard

would be able to obligate a substantial portion of the funds. To date,

that has not happened.

In addition, this program is of concern to the Committee due to the

increasing program administration costs, the vacillating sail-away

costs, and the current unobligated balance. The Coast Guard estimates

that the third and fourth vessels in the procurement cost a total of

$65,000,000. The current request for two vessels under the anticipated

full production procurement contract is $105,000,000. The cost

escalation of this vessel procurement is of great concern to the

Committee, and accordingly, the Committee recommends a reduction of

$60,000,000 to the request. When combined with the unobligated balances,

the program funding level should be sufficient to award a contract for

two vessels at the average cost of the initial procurement assuming the

cost profiles for the procurement remain stable for more than a couple

of months. The Committee understands that the contract is structured for

a minimum of two ships in fiscal year 1999. The Committee's intent is to

provide sufficient funds for the Coast Guard to contract for the two

vessels at a reasonable price and, at the same time, clear any

unobligated balances associated with the program. The Coast Guard shall

provide an analysis of the proposed procurement to the Committee prior

to the obligation of these funds including an estimate of the cost of

the complete procurement to fill the requirement for seagoing buoy

tenders.

Coastal buoy tender [WLM] replacement .--The Committee has provided

$31,000,000 for the coastal buoy tender replacement program. This

program replaces the Coast Guard's existing 133-foot and 157-foot

coastal buoy tenders with 14 new ships. The Coast Guard's request of

$31,000,000 for fiscal year 1999 is for economic price adjustments,

change orders, logistics, and administration. All 14 ships have been

ordered.

Coastal patrol boat/82-foot WPB replacement .--The Committee has

provided $37,600,000 for the coastal patrol boat replacement program.

This program would replace the 82-foot coastal patrol boats which are

over 30 years old. The $37,600,000 request for fiscal year 1999 was to

procure eight new boats.

The Committee had hoped to procure additional CPB's by exercising

existing options to provide the Coast Guard increased flexibility in

asset deployment at an earlier date than under the current procurement

schedule, but budgetary constraints make that impracticable at this

time. The CPB is one of the more versatile vessels in the Coast Guard

inventory and should provide increased flexibility and capability as the

Coast Guard transitions from the current fleet mix and recapitalizes the

fleet.

Stern loading buoy boat replacement project .--The Committee

recommendation provides the entire Coast Guard request of $11,773,000 in

fiscal year 1999 to procure eight new buoy boats.

Mackinaw replacement .--The Committee recommends $4,000,000 for

concept exploration to refine the specifications and costs for a heavy

icebreaking replacement vessel, including a new multimission vessel, for

the 53-year-old Mackinaw . While the Committee is pleased that the Coast

Guard committed to the continued operation of the Mackinaw to maintain

heavy icebreaking capabilities on the Great Lakes, the Committee is

concerned about the long lead time projected by the Coast Guard to

receive a replacement vessel when the Coast Guard has been studying this

issue for a number of years, and projects that a replacement vehicle

would not be available until the year 2006. The funding provided in the

bill will prevent another year's delay in the acquisition process for a

replacement heavy icebreaking vessel. The Committee expects the Coast

Guard to issue an interim status report on the concept exploration to

the Committee by January 31, 1999.

ATS 1 conversion .--The Committee recommends $14,000,000 for

conversion and the addition of a flight deck.

Deepwater capability replacement.-- The Committee has provided

$28,000,000 consistent with the budget request. The Committee is

concerned with the aggressive and novel approach envisioned by the Coast

Guard in the deepwater capability study and procurement and notes that

the Coast Guard and the Department have a history of difficulty with

large complex procurements or asset modifications. The deepwater

procurement promises to be the most complex and potentially

controversial of procurements that the Coast Guard has managed.

Accordingly, the Committee directs the Coast Guard to report to the

House and Senate Committees on Appropriations, the House Transportation

and Infrastructure Committee, and the Senate Commerce, Science, and

Transportation Committee prior to the downselection concerning the

anticipated number of project teams, the anticipated role of the

Government team, and the anticipated schedule for final contract award.

The Committee encourages the Department and the Coast Guard to structure

the procurement to provide the greatest possible flexibility for the

procurement, cost competitiveness, and diversity of approach for meeting

the deepwater mission requirements.

The Committee is concerned about the inclusion of a Presidential

advisory council on Coast Guard roles and missions as part of the

Deepwater capability replacement analysis justification. The

justification indicated that the council would convene in early 1998,

but as of June 10, 1998, the Committee had not been made aware of the

formulation of such a council, much less any meetings. Before any funds

are committed to initiate such a roles and mission review council, the

Committee expects to be briefed on the expected composition of any such

proposed council, the charter for any such council, and the anticipated

timetable for completion of such a review. The Committee is concerned

that too much time has elapsed in fiscal year 1998 for the initiation of

such a review to have any meaningful contribution to the fiscal year

1999 appropriations process and accordingly, directs that funding for

such a review council be requested in the fiscal year 2000 budget

submission.

Polar class icebreaker reliability improvement project [RIP]. --The

Comittee recommends $4,000,000 for this project and reiterates the cost

overrun and project management concerns noted in the fiscal year 1998

conference report.

AIRCRAFT

For aircraft procurement, the Committee recommends $46,131,000. Funds

for aircraft acquisitions are distributed as follows:

AIRCRAFT

[In thousands of dollars]

Fiscal year 1999 estimate Committee recommendation

HC 130 engine upgrade 9,941 9,941

HH 65A helicopter kapton rewiring 4,500 4,500

HH 65A engine control program 9,000

Long range search aircraft capability preservation 1,590 1,590

HH 65A helicopter mission unit computer unit replacement 3,000 3,000

HC 130 aircraft sensor upgrade 11,000 11,000

HU 25 aircraft avionics improvements 3,500 3,500

HH 60J navigation upgrade 1,100 1,100

HC 130 side looking airborne radar [SLAR] 2,500 2,500

--------------------------- --------------------------

Total 37,131 46,131

HH 65A performance limitations. --The Committee understands that

there are a large number of mission situations where the combination of

current mission weight requirements, fuel load, temperature, altitude,

and sea state must be traded off with mission range, on-station time,

and shipboard operations. A full authority digital electronic control

[FADEC] engine control program, currently anticipated as a life cycle

cost reduction and safety initiative in fiscal year 2000, is an

essential initial step to restoring power margins on the HH 65.

The Committee recommends $9,000,000 to initiate the FADEC program a

year early and to initiate any associated engine upgrade engineering

efforts required to facilitate a cost-effective power upgrade program.

The Committee further requests the Coast Guard to provide a description

of the limitations and tradeoffs mentioned above, with relevant measures

of how frequently power limitations restrict the HH 65 below original

Coast Guard requirements and the impact of such limitations. Further,

the Committee requests the Coast Guard to provide a plan to restore

needed power margins while accommodating past and future weight growth

over the second half of the HH 65's useful life. Please provide this

report by March 1, 1999.

OTHER EQUIPMENT

The Committee recommends $35,389,000. The following table displays

the project allocations:

OTHER EQUIPMENT

[In thousands of dollars]

Fiscal year 1999 estimate Committee recommendation

Fleet logistics system [FLS] 4,669 4,669

Ports and waterways safety system [PAWSS] 6,600 5,500

Marine information for safety and law enforcement [MISLE] 6,100 4,000

Local notices to mariners [LNM] automation 1,300 1,000

Defense message system [DMS] impementation 800 800

Communication system [COMMSYS] 2000 2,000 1,000

Differential global positioning system [DGPS] 2,600 9,520

Personnel management information system/joint uniform military pay system II 1,900 1,900

Aviation logistics management information system [ALMIS] 1,000 1,000

National distress system modernization 3,000 2,000

Commercial satellite communication upgrade 4,000 4,000

--------------------------- --------------------------

Total 33,969 35,389

Ports and waterways safety system [PAWSS] .--The Committee

recommends $5,500,000 for the development and implementation of a new

ports and waterways safety system [PAWSS], the same level appropriated

for fiscal year 1998. The Committee continues to be interested in Coast

Guard activities to develop a new approach to navigation safety, with an

emphasis on streamlining and reducing the cost of such safety systems.

The Committee applauds the Coast Guard's efforts to develop such a

system in cooperation with the maritime community and to apply

information technology.

Marine information for safety and law enforcement [MISLE]. --The

Committee recommends $4,000,000 for this activity, the same level

appropriated for fiscal year 1998.

Local notices to mariners [LNM] automation .--The Committee

recommends $1,000,000 for this activity, the same level appropriated for

fiscal year 1998.

Communications system [COMMSYS] 2000 .--The Committee recommends

$1,000,000 for this activity, the same level appropriated for fiscal

year 1998.

Nationwide differential GPS .--The Committee recommends $9,520,000

for this activity, $6,920,000 more than requested. The Committee directs

the Coast Guard to use the additional funds provided to accelerate the

Coast Guard's electronic equipment procurement, site preparation and

construction work, and installation of conversion software at 33 Air

Force groundwave emergency network [GWEN] transmitter sites, in order to

convert these sites as quickly as possible to differential global

positioning system transmitter sites. The Committee is convinced that

the most reasonable way to proceed with the Department of

Transportation's Nationwide Differential Global Positioning System

[NDGPS] Program is to establish the DGPS transmitters in the fastest,

most cost-effective manner possible. The Committee also understands that

the Air Force may release the GWEN system in approximately 1 year, and

economies of scale can be realized by accelerating the program at this

point beyond the requested funding level. The Committee did not include

NDGPS funds requested in either the Federal Highway Administration or

within the Federal Railroad Administration budgets, but is supportive of

the NDGPS effort, and wants to see the program carried out in a

expeditious and logical manner. The funds provided will pay for the

costs associated with converting a minimum of 33 GWEN sites that are

currently in the optimal location for NDGPS service, and for the

personnel costs associated with four installers.

Personnel management information system .--The Committee has

provided the full amount requested.

National distress system modernization .--The Committee recommends a

reduction of $1,000,000 below the requested level to $2,000,000. The

Committee believes the Coast Guard can complete the activities

anticipated for fiscal year 1999 in this program within the reduced

funding level.

SHORE FACILITIES AND AIDS TO NAVIGATION

The program level recommended is $43,250,000.

SHORE FACILITIES AND AIDS TO NAVIGATION

[In thousands of dollars]

Fiscal year 1999 estimate Committee recommendation

Shore--General: 5,000 5,000

Shore--Air stations: 1,500 1,500

Shore--Centers/groups/stations: 1,450 1,450

Aids to navigation facilities: Waterways aids-to-navigation projects 5,000 5,000

--------------------------- --------------------------

Total 53,650 43,250

Minor AC&I shore construction projects .--The recommended funding

level includes funding for the Thatcher's Island, MA, boat launchway.

Coast Guard housing. --The Committee recommends the Coast Guard

reprogram prior unobligated balances in this account. The Department of

Transportation inspector general has reported that there are in excess

of $16,000,000 in projects that cannot be obligated.

Station Dauphin Island. --The Committee recommends $3,200,000 for

improvements to Station Dauphin Island. The improvements will permit the

Coast Guard to station assets almost an hour closer to the most heavily

utilized boating and fishing areas.

PERSONNEL AND RELATED SUPPORT

The program level recommended is $48,450,000. Within the amount

provided, $750,000 shall be for core acquisition costs.

The Committee has provided the full amount requested for AC&I

personnel and related support.

[In thousands of dollars]

Personnel and related support Fiscal year 1999 estimate Committee recommendation

Direct personnel costs 47,700 47,700

Core acquisition costs 750 750

--------------------------- --------------------------

Total 48,450 48,450

BILL LANGUAGE

Asset sales .--The bill includes a provision which would credit the

proceeds from the sale or lease of surplus Coast Guard real property to

this appropriation. The administration requested this authority which

allows asset sale revenues to be credited to this appropriation as

offsetting collections, but limits the amount of offsetting collections

in fiscal year 1999 to $1,000,000. Any excess proceeds from asset sales

would accrue to the following fiscal year.

The Committee would like the Coast Guard's estimate of properties of

high value in the Coast Guard's real property portfolio; therefore, the

Coast Guard is directed to submit to the Committee by March 1, 1999, an

updated list of its 25 most valuable properties. This list should

include information on the fair market value of each property (or an

estimate thereof), the amount of land and the number of buildings, the

current use being made of the property, and the annual operating costs

for the activities housed on each property.

The Coast Guard needs funding it can depend upon to carry out

necessary projects. The Senate supports the authority vested in the

Commandant which allows the sale of real property and specified

operational assets, with proceeds to be credited to the ``Acquisition,

construction, and improvements'' appropriation. The Coast Guard and FAA,

like many other agencies, are reorganizing and downsizing while

providing critical services to the public at less cost. The Committee

believes that the Coast Guard, the FAA, the FHWA, and the Government as

a whole, would benefit substantially if allowed budgetary credit for

property they expect to excess as part of downsizing efforts. Clearly,

there is the potential for a very positive benefit if the Coast Guard

and the FAA are permitted to receive credit for the value of excessed

property.

Pier space use agreement .--The bill includes language that allows

the Secretary of Transportation, acting through the Commandant of the

Coast Guard, to enter into a long-term use agreement with the city of

Homer for dedicated pier space on the municipal dock. This authority is

necessary to support Coast Guard vessels when such vessels call on

Homer, AK. The terms and conditions of the use agreement shall be

developed by the Secretary and the city of Homer.

ENVIRONMENTAL COMPLIANCE AND RESTORATION

Appropriations, 1998 $21,000,000

Budget estimate, 1999 21,000,000

Committee recommendation 21,000,000

The Committee recommends funding of $21,000,000 to continue the

environmental restoration and compliance-related actions throughout the

Coast Guard.

These fiscal year 1999 funds will be used to address environmental

problems at former and current Coast Guard units as required by

applicable Federal, State, and local environmental laws and regulations.

Planned expenditures for these funds include major upgrades to petroleum

and regulated-substance storage tanks, restoration of contaminated

ground water and soils, remediation efforts at hazardous substance

disposal sites, and initial site surveys and actions necessary to bring

Coast Guard shore facilities and vessels into compliance with

environmental laws and regulations.

ALTERATION OF BRIDGES

(highway trust fund)

Appropriations, 1998 $17,000,000

Budget estimate, 1999 (\1\)

Committee recommendation (highway trust fund) 20,000,000

\1\The budget estimate proposes that the cost of altering

bridges will become eligible for funding from Federal-aid highways.

The ``Alteration of bridges'' appropriation provides funds for the

Coast Guard's share of the cost of altering or removing bridges

obstructive to navigation. Under the provisions of the Truman-Hobbs Act

of June 21, 1940, as amended (33 U.S.C. 511 et seq.), the Coast Guard,

as the Federal Government's agent, is required to share with owners the

cost of altering railroad and publicly owned highway bridges which

obstruct the free movement of navigation on navigable waters of the

United States in accordance with the formula established in 33 U.S.C.

516.

The Committee directs that, of the funds provided, $3,000,000 shall

be allocated to the Florida Avenue railroad/highway combination bridge

in New Orleans, LA; $7,000,000 to the Sidney Lanier highway bridge in

Brunswick, GA; $2,000,000 to the John F. Limehouse Bridge in Charleston,

SC; $1,000,000 to the Chelsea Street Bridge in Boston, MA; $5,000,000 to

the highway 90 bridge in Pascagoula, MS; and $2,000,000 to the

Mississippi River bridge in Greenville, MS.

RETIRED PAY

Appropriations, 1998 (mandatory) $653,196,000

Budget estimate, 1999 (mandatory) 684,000,000

Committee recommendation (mandatory) 684,000,000

The ``Retired pay'' appropriation provides for retired pay of

military personnel of the Coast Guard and Coast Guard Reserve, members

of the former Lighthouse Service, and for annuities payable to

beneficiaries of retired military personnel under the retired

serviceman's family protection plan (10 U.S.C. 1431 1446) and survivor

benefit plan (10 U.S.C. 1447 1455), and for medical care of retired

personnel and their dependents under the Dependents Medical Care Act.

The average number of personnel on the retired rolls is estimated to be

32,633 in fiscal year 1999, as compared with an estimated 31,462 in

fiscal year 1998 and 30,478 in fiscal year 1997.

The budget estimate proposed indefinite budget authority instead of a

fixed amount.

RESERVE TRAINING

Appropriations, 1998 $67,000,000

Budget estimate, 1999 67,000,000

Committee recommendation 67,000,000

Under the provisions of 14 U.S.C. 145, the Secretary of

Transportation is required to adequately support the development and

training of a Reserve force to ensure that the Coast Guard will be

sufficiently organized, manned, and equipped to fully perform its

wartime missions. The purpose of the Reserve training program is to

provide trained units and qualified persons for active duty in the Coast

Guard in time of war or national emergency, or at such other times as

the national security requires. Coast Guard reservists must also train

for mobilization assignments that are unique to the Coast Guard in times

of war, such as port security operations associated with the Coast

Guard's Maritime Defense Zone [MDZ] mission and include deployable port

security units.

The Coast Guard is provided Reserve training funding as follows:

[In thousands of dollars]

Functional program element Fiscal year 1998 levels President's request (7,600 SELRES) Committee recommendation (8,000 SELRES)

Initial training 3,341 2,466 2,466

Continuing training 39,827 40,820 40,820

Operation and maintenance support 15,074 15,374 15,374

Program management and administration 8,758 8,340 8,340

------------------------- ------------------------------------ -----------------------------------------

Total 67,000 67,000 67,000

RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

General Trust Total

Appropriations, 1998 $15,500,000 $3,500,000 $19,000,000

Budget estimate, 1999 14,800,000 3,500,000 18,300,000

Committee recommendation 13,961,000 3,500,000 17,461,000

The Coast Guard's Research and Development Program seeks to improve

the tools and techniques with which Coast Guard carries out its varied

operational missions and to increase the knowledge base upon which it

depends to fulfill its regulatory responsibilities.

The Committee recommendation includes $17,461,000 for research,

development, test, and evaluation distributed as follows:

[In thousands of dollars]

Fiscal year 1998 Fiscal year 1999 estimate Committee recommendation

Program areas: 1,875 1,250 1,250

------------------ --------------------------- --------------------------

Total 19,000 18,300 17,461

\1\Project areas discussed in the servicewide safety and environmental compliance; command, control, communication, computers, and intelligence integration; and technology advancement and assessment budget in the fiscal year 1998 request have been consolidated into a single budget sheet (technology investment) for the fiscal year 1999 budget submission.

The Committee has provided $17,461,000 for fiscal year 1999 research

and development.

Waterways safety and management. --The Committee recommends

$1,225,000 for this activity, the same level appropriated in fiscal year

1998.

Marine safety. --The Committee recommends $2,995,000 for this

activity, the same level appropriated in fiscal year 1998.

Marine environmental protection. --The Committee recommends

$2,704,000 for this activity, including $1,000,000 for further invasive

species research efforts. Within the funds provided, the Coast Guard is

directed to provide an assessment of the applicability of previously

developed antisubmarine acoustic-monitoring technology for application

in the identification and capture of drug traffickers in high volume

maritime transit zones.

BOAT SAFETY

(aquatic resources trust fund)

Appropriations, 1998 $35,000,000

Budget estimate, 1999\1\ ...........................

Committee recommendation ...........................

\1\President's budget requests $55,000,000 in mandatory

appropriations in fiscal year 1999.

This account provides financial assistance for a coordinated National

Recreational Boating Safety Program for the several States. Title 46,

United States Code, section 13106, establishes a ``Boat safety'' account

from which the Secretary may allocate and distribute matching funds to

assist in the development, administration, and financing of qualifying

State programs. The ``Boat safety'' account consists of amounts

transferred from the highway trust fund which are derived from the

motorboat fuel tax (18.4 cents per gallon).

The President's budget requests no discretionary funding for 1999.

Instead, the President's budget proposes to provide all funding for the

State boating safety grant program by providing $55,000,000 from the

aquatic resources trust fund.

The Transportation Efficiency Act for the 21st Century provides for a

guaranteed funding level of $55,000,000 annually for this program. No

additional appropriations are necessary for fiscal year 1999.

General Provisions

Land conveyance, Coast Guard Station Ocracoke. --The Committee has

included language section 334 permitting the transfer of Coast Guard

Station Ocracoke to the State of North Carolina.

Transportation of edible oils .--The Committee has included a

general provision (sec. 341) that requires the Secretary of

Transportation to promulgate a regulation not later than March 31, 1999,

that is consistent with the Edible Oil Regulatory Reform Act, to

specifically address facilities that handle animal fats and vegetable

oils by amending 33 CFR part 154, which relates to response plans for

marine-transportation related facilities. To be consistent, a rule for

animal fats and for vegetable oils should include, at a minimum,

separate definitions, a separate category from other oils, and provide

requirements that are specific to and appropriate for animal fats and

vegetable oils.

FEDERAL AVIATION ADMINISTRATION

SUMMARY OF FISCAL YEAR 1999 PROGRAM

The Federal Aviation Administration traces its origins to the Air

Commerce Act of 1926, but more recently to the Federal Aviation Act of

1958 which established the independent Federal Aviation Agency from

functions which had resided in the Airways Modernization Board, the

Civil Aeronautics Administration, and parts of the Civil Aeronautics

Board. FAA became an administration of the Department of Transportation

on April 1, 1967, pursuant to the Department of Transportation Act

(October 15, 1966).

The total recommended program level for the FAA for fiscal year 1999

amounts to $9,899,569,269 including $43,000,000 in user fees credited to

the ``Operations'' appropriation and a $2,100,000,000 obligation

limitation on the use of contract authority for the Airport Grants

Program. The following table summarizes the Committee's recommendations:

[In thousands of dollars]

Program Fiscal year-- Committee recommendation

1998 enacted 1999 budget estimate

Operations \1\5,335,934 5,631,130 5,581,259

Facilities and equipment \2\1,875,477 2,130,000 2,044,683

Research, engineering, and development 199,183 290,000 173,627

Grants-in-aid for airports 1,700,000 1,700,000 2,100,000

-------------- ---------------------- -----------

Total 9,110,594 9,751,130 9,899,569

\1\Excludes reduction for TASC pursuant to section 320 of Public Law 105 66; excludes transfer of $1,554,000 from Department of State pursuant to Public Law 105 119.

\2\Excludes $25,000,000 supplemental Public Law 105 174.

OPERATIONS

General Trust User fees Total

Appropriations, 1998\1\ $3,400,306,000 $1,901,628,000 $5,301,934,000

Budget estimate, 1999 3,528,130,000 2,060,000,000 $43,000,000 5,631,130,000

Committee recommendation 3,379,328,885 2,158,930,135 43,000,000 5,581,259,000

\1\Excludes reduction of $939,000 for TASC pursuant to Public Law 105 66; excludes transfer of $1,554,000 from Department of State pursuant to Public Law 105 119; includes $50,000,000 transferred to EAS Program.

FAA's ``Operations'' appropriation provides funds for the operation,

maintenance, communications, and logistic support of the air traffic

control and navigation systems and activities. It also covers the

administration and management of the regulatory, airports, commercial

space, medical and engineering, and development programs.

User fees. --The administration proposed collecting $93,000,000 in

user fees in fiscal year 1999. These fees were to be available without

Appropriations Committee action, including $50,000,000 for the essential

air service program and rural airport safety and $43,000,000 for FAA

expenses.

The FAA cost allocation methodology, which the U.S. Court of Appeals

cited as a critical deficiency in the court's decision to invalidate the

schedule of overflight user fees, is scheduled to be operative during

July 1998. Accordingly, the FAA has not appealed the court of appeals

decision and the Committee assumes that FAA intends to reissue a fee

schedule that comports with the court of appeals decision. The Committee

further assumes that the FAA will adhere to prior congressional guidance

as a new schedule of fees is formulated.

Operations.-- The activities of the operations accounts comprise

eight main areas consistent with FAA's reorganization to bring together

functions and activities that support the provision of a single, major

service and to establish a single executive responsible for that

service.

Air traffic services. --Provides for the operations and maintenance

of the national air traffic control and navigation system and the

installation of air traffic and navigation equipment. Air traffic

services consists of five subactivities: air traffic, NAS logistics,

systems maintenance, leased telecommunications, and flight inspections.

Aviation regulation and certification.-- Promotes aviation safety

and ensures compliance with safety and certification standards for air

carriers, commercial operators, air agencies, airmen, and civil

aircraft, including aircraft registration; develops and administers

safety standards for airworthiness of aircraft and components. Includes

accident investigation, aviation medicine, aviation rulemaking, and the

suspected unapproved parts office.

Aviation security .--Provides for the overall planning, direction,

management, evaluation, and enforcement of civil aviation security;

supports efforts covering the investigation and interdiction of illegal

drugs and the assessment of foreign airports.

Research and acquisition.-- Responsible for all research,

prototyping, system development, and acquisition activities. Includes

the William J. Hughes Technical Center.

Administration of airports. --Provides for the administration of

airport grants and the safety inspection and certification of the

Nation's airports.

Commercial space transportation. --Facilitates and promotes

commercial space launches by the U.S. private sector and licenses and

regulates commercial launches, launch site operations, and certain

payloads.

Administration. --Funds the administrative functions that establish

policy and direct and develop programs in the areas of FAA aircraft use

and management, building space management, budget and accounting,

business information and consultation, human resource management, and

technical and management training; includes the regional administrators

and the Aeronautical Center Director.

Staff offices. --Funds the Office of the Administrator and the

Deputy Administrator, and offices that report directly to the

Administrator and provide executive direction; operations and

communications control; civil rights; government and industry affairs;

policy, planning, and international aviation; legal counsel; and public

affairs.

The bill includes $5,538,259,000 for the operations activities of the

Federal Aviation Administration, of which $2,158,930,135 shall be

derived from the airport and airway trust fund.

As in past years, FAA is directed to report immediately to the

Committees on Appropriations in the event resources are insufficient to

operate a safe and effective air traffic control system.

The following table summarizes the Committee's recommendation in

comparison to the budget estimate:

[In thousands of dollars]

Fiscal year-- Committee recommendations

1998 program level\1\\2\ 1999 budget estimate

Air traffic services 4,153,106 4,380,866 4,325,866

Aviation regulation and certification 609,879 636,027 624,879

Aviation security 97,479 128,821 111,429

Research and acquisition 92,340 94,202 92,340

Administration of airports 47,891 49,854 47,891

Commercial space transportation 6,168 6,275 6,168

Administration 256,493 259,014 256,493

Staff offices 73,193 76,071 73,193

Accountwide adjustments -----------

-------------------------- -----------------------

Total 5,336,549 5,631,130 5,538,259

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

User fees 84,000 43,000 43,000

Appropriated funds 5,252,549 5,588,130 5,538,259

Secretary's discretionary transfer authority 60,000

-------------------------- ----------------------- -----------

Total available funds 5,252,549 5,631,130 5,641,259

\1\Includes $939,000 reduction for TASC pursuant to section 320 of Public Law 105 66. Includes $1,554,000 transfer from Department of State pursuant to Public Law 105 119.

\2\Excludes $23,000,000 available balances of the $57,700,000 provided in the Omnibus Consolidated Appropriations Act of 1997, Public Law 104 208.

AIR TRAFFIC SERVICES

The Committee recommends a total of $4,325,866,000 for the operation

and maintenance of the national air traffic control and flight service

system.

The Committee is confident that this level is completely sufficient

for air traffic services and offers the following analysis for

illustration of the flexibility represented by the Committee's

recommendation. The requirements for funding for this activity could be

predicated on a series of adjustments to the fiscal year 1998

appropriated level. Initially, the appropriation could be adjusted

downward for the $93,000,000 in overflight fees that were not

forthcoming in fiscal year 1998 but are anticipated for fiscal year

1999. The Administrator and the Secretary have both indicated that the

FAA has been able to maintain a safe air traffic control environment

notwithstanding the inability to access the revenues that would have

come from these fees. Second, the appropriation should be reduced by

$10,994,000 requested for WAAS operations activities consistent with the

treatment of the WAAS Program in the F&E account. In addition, over

$23,000,000 in this appropriation is directly attributable to 248

controller staff-years that are solely committed to union activities and

over $15,000,000 that is directly attributable to overtime staffing. For

a great deal of the amount of time overtime is authorized, a union

controller representative is also scheduled--but only for union

activities. Given the high level of staff-years committed to union

activities viewed in conjunction with the seemingly unalterable trend

for substantial reliance on overtime staffing, the Committee encourages

the Federal Aviation Administration to pursue greater flexibility in

staffing arrangements to reduce the current reliance on overtime and to

encourage the conduct of union activities in nonpeak air traffic control

periods. It does not seem unreasonable to the Committee that union

activities might be best conducted during the slower traffic period and

that union representatives might best serve the union membership by

conducting union activities while the bulk of the controllers (and

presumably the union representatives as well) are not engaged in the

heavier traffic flows.

While the Committee does not recommend reducing the appropriation by

the amount attributable to the overtime staffing and the seemingly

suboptimal timing of the generous allotment of staff-years for union

activities, or interim incentive pay, or even adjusting the base to

reflect the actual fiscal year 1998 baseline, the FAA should pursue

efficiencies that would result from a greater coordination of activities

in this area.

Further, the Committee notes that the FAA forecasting of aviation

activity has tended to be overly optimistic. In the Independent

Financial Assessment, Coopers & Lybrand noted:

The FAA has a solid reputation in the aviation

community for its forecasting abilities. However, when

comparing actual past activity to 5-year historical

projections, the FAA has consistently overestimated future

aviation activity. Five-year projections are of particular

importance in assessing the FAA's financial requirements as it

takes 3 to 5 years to fully train a new controller.

Overestimates in the need for new controllers 5 years from now

will likely lead to significant future expenditures for

unnecessary resources. It is also important because the

Federal budget process begins at least 2\1/2\ years before the

end of the particular fiscal year. Interviews with FAA staff

have indicated that these long-term overestimations are

principally caused by the economic projections provided by

OMB, as these projections generally do not take economic

cycles into account. OMB's projections are used as the basis

for the FAA's own forecasting.

Compared with the limited number of other aviation

forecasts, the FAA commercial airline forecasts are not overly

optimistic. However, it should be noted that all of the

aviation forecasters we identified had a natural interest in

optimistic forecasts. Some industry observers have even

suggested that the recent phenomenal growth in commercial air

carrier activity has peaked.

General aviation is likely to be overestimated. The

FAA has forecasted general aviation to grow by approximately 7

percent from 1997 to 2002. Although recent statistics have

suggested that the decline in general aviation activity may

have ended, it is unlikely that general aviation can sustain

such a high future growth rate as projected. A key indicator

suggested by user groups is that the number of general

aviation pilots, which has decreased by 25 percent from 1980

to 1996, and is expected to continue to decline. Since general

aviation accounts for 60 percent of total U.S. civil airborne

hours, such an overestimation will have a significant impact

on actual future FAA workloads.

Absolute aggregate error averages from 1990 to 1996

of 8.9 percent and 7.7 percent for 5-year RPM and ARTCC

operation forecasts respectively indicate that FAA forecasting

calculations have been historically overestimated. The impact

of these estimates on overall FAA financial requirements

depends how closely linked demand is to staffing standards.

Air traffic control operation costs continue to increase

faster than demand for FAA air traffic control services. The

high likelihood that future FAA workloads are overestimated

needs to be among the factors considered when estimating

future controller staffing needs.

In addition, the Coopers & Lybrand assessment implies the possibility

for the FAA to increase the efficiency of the air traffic control work

force. Some of those possible efficiencies are mentioned above. Further,

the average annual growth in operations at air traffic control towers,

en route centers, and flight service stations from 1992 to 1997 has been

0.05 percent, 2.13 percent, and -0.55 percent, respectively. Current

average operations per hour at en route centers are less than 3 per

controller hour, and current average operations per hour at air traffic

control towers is less than 6 per controller hour. Those averages would

seem to indicate that there is some room for improvement in controller

efficiency or staffing coordination.

The Committee also notes the recent completion of the labor

negotiations between the FAA and the National Air Traffic Controllers

Association. The Committee believes that careful management of the funds

provided in this act will ensure sufficient resources are available to

cover the substantial salary increases contained in the agreement.

Training .--Pursuant to the recent concerns expressed by the Federal

Aviation Administration about the need for retraining of air traffic

controllers, the Committee is confident that any training or retraining

initiatives can be accommodated within the recommended level. The

Committee directs the Administrator to report to the Committee by August

1, 1998, on the following items: (1) the circumstances that led to the

decision that retraining of air traffic controllers was necessary; (2)

how the incident emerged within the Federal Aviation Administration; (3)

the steps taken to both retrain controllers and to insure that

deficiencies in the air traffic control system are surfaced immediately

and brought to the attention of senior Federal Aviation Administration

officials; (4) the anticipated training program for both fiscal years

1998 and 1999.

The Committee notes that the FAA has consistently underfunded

controller training as compared to the request over the past several

years. The Committee encourages the FAA to commit the requested

$23,000,000 for training to training and not to allocate those funds to

other activities. If the pattern of the past several years continues of

diverting training funds for other purposes, additional measures may be

taken to insure that critical training activities are not underfunded.

As the Federal Aviation Administration reviews its training

requirements, the Committee anticipates the establishment, from amounts

provided for training, of a university-based center for training, as

well as academics and research, that would design and deliver

technology-based distance education and training courses to meet the

needs and requirements of the Federal Aviation Administration and the

general aviation community. Such a center should be designed to address

immediate and time-sensitive issues, such as the situation that led to

the current decision to retrain controllers, as well as issues in flight

standards, aviations safety, human factors, and cabin crew issues. The

Committee recommends that such a center be located at an institution

which currently possesses the pertinent technology and which has

experience with the FAA in training, research, and distance education.

Emergency services training .--The Committee recommendation includes

$1,500,000 for specialized aircraft firefighting training for Federal

and non-Federal emergency personnel, at the Rocky Mountain Emergency

Services Training Center in Helena, MT.

Contract tower program .--The Committee recommendation includes

$6,000,000 for a contract tower cost-sharing program. These funds are in

addition to those provided for the regular contract tower program.

The Committee notes that the Department of Transportation's Inspector

General has found that the contract tower program has provided level I

air traffic control services at a lower cost for 110 towers previously

operated by the FAA and provided air traffic control services at 50

towers the FAA could not have afforded to staff.

The new program allows those towers that fall below the FAA threshold

to participate in the program by contributing a local match. The

Committee believes that this new program will enable small airports to

have their tower staffed with an FAA certified air traffic controller;

thereby ensuring the safe and efficient movement of people and goods.

The FAA is directed to continue operation of the Greenville, MS,

contract tower, the Kinston Regional Jetport in North Carolina, the

Joplin Regional Airport in Missouri, and the McKellar-Sipes Regional

Airport tower in Jackson, TN; and to include the towers at New Bern and

Hickory, NC, and at the Cape Girardeau Airport in Missouri under the

contract tower cost-sharing program.

The Committee urges FAA to work with the communities to explore

alternatives, such as sharing tower operating costs, to maintain tower

operations.

Salisbury air traffic control tower .--The Committee directs the FAA

to use such funds as necessary for operational expenses for an air

traffic control tower, located in Salisbury, MD, provided that the

Federal Aviation Administration has made a prior determination of

eligibility for such tower to be included in the contract tower program.

Technical noise assistance .--The Committee recommendation includes

$100,000 for a technical assistance grant for a local citizens group to

retain the services of a technical expert to facilitate the involvement

of local citizens as the FAA pursues the existing plans to redesign the

airspace.

Equipment and staffing deficiencies in the New York/New Jersey

region .--The Committee continues to be concerned about the reports

regarding staffing and equipment needs at New York/New Jersey area

towers, the New York TRACON and the New York Air Traffic Control Center.

While progress has been made since last year's subcommittee hearing on

this topic, the Committee believes more can be done. The Committee urges

the FAA to redouble efforts to improve the safety and efficiency of

these facilities.

Air traffic control reclassification New York-New Jersey

metropolitan region .--The Committee recognizes the recent agreement

between the FAA and air traffic controllers to reclassify the

compensation structure for air traffic controllers nationwide. However,

the Committee is concerned that the initiative, as proposed, threatens

to undermine recent advances achieved in increases in controllers

staffing levels at the towers of the three major airports--Newark,

Kennedy, and LaGuardia. While the reclassification proposes to grant

controllers at the New York Center and the New York TRACON an

appropriate pay grade level of ATC 12, the controllers at the three

major towers would receive a level that is fully two levels lower,

creating an unacceptably large disparity in pay. This new pay grade gap

generated by the FAA reclassification will serve to undermine all

Congress has achieved, as controllers will rapidly leave the towers

seeking higher wages. The FAA will not be able to attract and retain the

most qualified and seasoned controllers to serve the towers in this busy

region. The towers, the New York TRACON, and the New York Center share

the same complexity, high volume and density of traffic, and the

controllers share the same high cost of living. Congress acted to

equalize pay grades among the five facilities in the fiscal year 1991

appropriations act. Consistent with that act the Committee directs the

Administrator to take such actions as are necessary to provide for

equitable pay levels at the relevant FAA site in the New York/New Jersey

area.

Cooperative efforts to minimize delays .--The Committee is aware

that the Port Authority of New York and New Jersey, Continental

Airlines, and the Federal Aviation Administration have entered into an

information partnership in an effort to reduce delays in the Nation's

most delayed airport, Newark International Airport in Newark, NJ. This

partnership, which has been underway since December 1997, has resulted

in a substantial effort by all parties to focus energy and resources on

these projects which can help to improve the chronic delays suffered by

consumers who utilize Newark. As part of this partnership, a list of

eight initiatives has been compiled. These are the items upon which the

partnership has agreed to focus for 1998. Quarterly meetings have been

held to check progress and refocus resources where necessary. The eight

initiatives are as follows: airspace redesign; controller automated

spacing aid [CASA]; increased use of runway 29 for turbojet departures;

Teterboro Airport ILS runway 19; New York ARTCC automated flight plan

processing [DSP]; integrated terminal weather system [ITWS]; south final

vector radar position-New York TRACON; and optimize airport arrival

capacity-runway use.

The Committee directs the FAA to provide a quarterly report citing

the status of each of these eight initiatives. Reports are to include

target dates for completion and explanations for those projects which

may exceed their target dates. Reports are to include an assessment of

what is required to complete the project (for example, environmental

analysis, equipment, personnel).

Frederick Municipal Airport .--The Committee understands that the

NTSB has recommended the FAA transfer responsibility for the Frederick

Municipal Airport airspace from BWI Airport to the Dulles TRACON. Radar

coverage at Frederick Municipal Airport currently terminates at 2,300

feet. The transfer would result in lowering radar coverage at Frederick

Municipal Airport to approximately 900 feet. The Committee encourages

the transfer of responsibilities of this airspace consistent with safety

and efficient airspace management.

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