The Amtrak Reform and Accountability Act of 1997 (P.L. 105 134)

established the Amtrak Reform Council. This Act assigned the following

tasks to the Council: (1) evaluate Amtrak's performance and make

recommendations to Amtrak for achieving further cost containment,

productivity improvements, and financial reforms; (2) monitor work-rule

savings; and (3) develop an action plan for a ``restructured and

revitalized national intercity passenger rail system'' if the Council

determines, any time after December 1999, that Amtrak is not achieving

its financial goals or that it would require an operating subsidy after

December 2002.

The Committee has provided $450,000 for the Amtrak Reform Council in

fiscal year 1999. This funding coupled with $80,000 provided under the

Emergency Supplemental Appropriations Act of 1998 shall be sufficient

for the Council to begin its review of Amtrak's financial condition. The

Committee believes that the Council will work closely with the

Department of Transportation's Inspector General (IG) to fulfill its

duties. The IG has recently awarded a contract for an independent

assessment of Amtrak's financial needs through the year 2002. This work

will be completed in November 1999. Thereafter, the IG will be

reassessing, on a yearly basis, Amtrak's financial needs. Therefore,

much of the information the Council will need to evaluate Amtrak's

financial performance and to make its recommendations should be

available from the IG.

COAST GUARD

SUMMARY OF FISCAL YEAR 1999 PROGRAM

The 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. This was followed by transfers to the Coast Guard of

the United States Lighthouse Service in 1939 and the Bureau of Marine

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

responsibilities enforcing all applicable federal laws on the high seas

and waters subject to the jurisdiction of the United States; promoting

safety of life and property at sea; aiding navigation; protecting the

marine environment; and maintaining a state of readiness to function as

a specialized service of the Navy in time of war.

Including funds for national security activities and retired pay

accounts, the Committee recommends a total program level of

$3,887,000,000 for activities of the Coast Guard in fiscal year 1999.

This is $29,446,000 less than the fiscal year 1998 program

level--essentially a hard freeze.

The following table summarizes the fiscal year 1998 program levels,

the fiscal year 1999 program requests, and the Committee's

recommendations:

Program Fiscal year--

Operating expenses\1\\2\ $2,715,400,000 $2,771,705,000 $2,700,000,000

Acquisition, construction and improvements\3\ 388,850,000 442,773,000 389,000,000

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

Alteration of bridges 17,000,000 12,000,000

Retired pay\4\ 653,196,000 684,000,000 684,000,000

Reserve training 67,000,000 67,000,000 69,000,000

Research, development, test and evaluation 19,000,000 18,300,000 12,000,000

Boat safety\5\ 35,000,000

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

Total 3,916,446,000 4,004,778,000 3,887,000,000

\1\Fiscal year 1998 amount includes $300,000,000 specifically for defense-related activities and scored against budget function 050 (defense); fiscal year 1999 estimated amount includes $309,000,000 (and the recommendation includes $300,000,000) specifically for national security activities of the Coast Guard and scored against budget function 050 (defense).

\2\Fiscal year 1998 total includes $1,600,000 in supplemental appropriations from Public Law 105-18 related to TWA 800 disaster recovery expenses and excludes reductions of $529,000 for TASC.

\3\Fiscal year 1999 estimated amount includes $35,000,000 in new user fees.

\4\Fiscal year 1998 total includes $9,200,000 provided in supplemental appropriations from Public Law 105 18.

\5\Fiscal year 1999 estimate includes $35,000,000 proposed in mandatory spending.

COUNTER-DRUG INITIATIVE

The Committee believes that a much more aggressive effort is needed

to fight the war on drugs, and that the current response of the

administration is inadequate. The Coast Guard plays a critical role in

defending the nation against the threat of illegal drugs, by patrolling

maritime lanes of supply in the air and on the sea, and by interdicting

drug smugglers in the transit zone. The Committee notes that the fiscal

year 1999 budget request would provide essentially the same level of

funding as provided in fiscal year 1998--a level which would, according

to the Coast Guard, result in 14 percent less cocaine seized, and 25

percent less cutter hours, than experienced in fiscal year 1997. In a

Subcommittee hearing this year, the Commandant of the Coast Guard

described actions taken by the service in fiscal year 1997 to intensify

their counter-drug activities:

Some of it . . . I took away from fisheries, to

demonstrate that we could get a lot of bang for the buck with

this investment, and I think our statistics demonstrated that.

I think we had a 1,000 percent increase in some of our

performance figures, 300 percent in others. We have seized

more drugs than we ever seized before. I feel we had a

dramatic impact on the welfare and safety of the people of

Puerto Rico and the Virgin Islands, as an example. I actually

honestly believed that this year would be the second year, and

I would be funded, and the administration would ask for me to

continue those programs, and I wasn't. And so I am

disappointed in that . . .

The Committee wants to see more illegal drugs seized, not less, and

is willing to rearrange service priorities to make it happen. Therefore,

the bill provides an increase, above the budget request, of $73,800,000

for Coast Guard counter-drug activities. This raises operations funding

for counter-drug activities to $406,091,000 in fiscal year 1999, an

increase of $33,800,000 (9.1 percent) above the fiscal year 1998 level.

The bill also includes an additional $40,000,000 in AC&I for

high-priority counter-drug acquisitions. These items and activities are

listed below.

Operating expense increases.-- The increase of $33,800,000 is

intended for the following items and activities:

Increase HH 65 patrol hours $2,100,000

Increase C 130 patrol hours 830,000

Increase WPB patrol hours 7,478,000

Increase international law enforcement training 1,100,000

PC 170 O&M 2,885,000

Reactivate 2 T AGOS vessels 6,166,000

Maintain 7 WPBs in fleet 4,508,000

Drug detection sensors 1,000,000

Activate 3 HU 25 falcon jets 4,607,000

Increase intelligence collection support 948,000

Caribbean support tender 2,178,000

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

Total 33,800,000

Acquisition, construction, and improvements (AC&I) increases.-- The

increase of $40,000,000 is intended for the following items and

activities:

Reactivate 2 T AGOS vessels $9,900,000

HU 25 jet engine overhaul 9,100,000

Sensors, cutter or jet 9,000,000

Low signature aircraft 2,000,000

Barracuda coastal patrol boats 10,000,000

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

Total 40,000,000

Given the tight discretionary caps this year, the Committee is unable

to provide resources above the overall Coast Guard budget request

without unacceptably harming the programs of other DOT agencies.

Furthermore, the Committee believes these resources can be accommodated

through a reprioritization of existing missions and programs, much as

they were in fiscal year 1997. Therefore, the counter-drug operating

activities are offset by reductions in two areas: fisheries enforcement

(-$13.8 million) and polar icebreaking (-$20 million). Several

lower-priority capital programs have been likewise reduced to

accommodate the stronger focus on counter-drug activities. This reflects

the Committee's view that counter-drug operations should receive a

higher priority relative to other mission areas.

The Commandant testified this year ``in my personal opinion, drug law

enforcement has a higher national security priority than fisheries

enforcement''. Therefore, it seems inconsistent that the

administration's request would allocate 17 percent of the Coast Guard

operating budget to fisheries enforcement and 13 percent to drug

interdiction. In total, the budget requests $115,775,000 more for

fisheries law enforcement than for drug interdiction. The Committee

recommendation redirects 4 percent of the fisheries budget, and reduces

polar icebreaking significantly, to fund increased counter-drug

activities. In fiscal year 1997, the Coast Guard was only reimbursed 12

percent of their costs for the polar icebreaking program, even though

the program provides benefits largely to non-DOT agencies and research

institutions. In fiscal year 1999, the Coast Guard plans to commission a

new polar icebreaker, which will add $10,500,000 in operating costs--but

only $4,000,000 is expected to be reimbursed by users. In order to

finance the increased effort in the war on drugs, the Committee

recommendation reduces direct Coast Guard funding for polar icebreaking

from $36,971,000 to $16,971,000, and assumes that the service can

maintain current service levels to the extent that the primary

beneficiaries of the program agree to pay those costs on a reimbursable

basis.

OPERATING EXPENSES

Appropriation, fiscal year 1998\1\ $2,715,400,000

Budget estimate, fiscal year 1999\2\ 2,771,705,000

Recommended in the bill\1\ 2,700,000,000

xlBill compared with:

Appropriation, fiscal year 1998 -15,400,000

Budget estimate, fiscal year 1999 -71,705,000

\1\Includes $300,000,000 in funds for national security activities included in this bill and excludes reductions of $529,000 for TASC.

\2\Includes $309,000,000 in funds for national security activities included in this bill.

Including $300,000,000 for national security activities, the

Committee recommends a total of $2,700,000,000 for operating activities

of the Coast Guard in fiscal year 1999, a decrease of $15,400,000 (less

than one percent) below the fiscal year 1998 appropriation and

$71,705,000 (2.6 percent) below the budget request. The following table

compares the fiscal year 1998 enacted level, the fiscal year 1999

estimate, and the recommended level by program, project and activity:

[In thousands of dollars]

Budget activity Fiscal year--

1998 enacted 1999 estimate 1999 recommended

I. Personnel Resources $1,702,298 $1,762,471 $1,728,260

II. Operating Funds and Unit Level Maintenance 617,467 619,593 618,145

C. District commands

1. 1st district (Boston) 37,711 36,831 36,831

2. 7th district (Miami) 46,400 47,532 47,532

3. 8th district (New Orleans) 29,894 30,044 30,044

4. 9th district (Cleveland) 18,205 18,583 18,583

5. 13th district (Seattle) 13,749 13,887 13,887

6. 14th district (Honolulu) 9,838 10,655 10,655

7. 17th district (Juneau) 20,693 10,805 10,805

III. Intermediate and Depot-Level Maintenance 395,106 389,641 389,641

IV. Account-wide Adjustments -36,046

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

Total appropriation \3\2,714,871 2,771,705 2,700,000

Unobligated balance available 1,048

Offsetting collections (cash) 111,798 113,306 113,306

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

Total budget authority available 2,827,717 2,885,011 2,813,306

\1\Includes operating funds for Coast Guard Academy and Training Centers as well as general funds for professional training and education.

\2\Includes ammunition and small arms (AFC 54) and Chief of Staff funds (AFC 40).

\3\Includes reduction of $529,000 to appropriated level.

COMMITTEE RECOMMENDATION

The recommended reduction from the budget estimate includes the

following adjustments:

Amount

Eliminate 79 new officer billets -$5,736,000

Do not restore slow hiring reduction of FY 1998 -15,000,000

Hold PCS reassignment moves to FY 1997 level -1,370,000

Defer college fund recruiting initiative pending authorization -545,000

Reduce growth in military pay and allowances -10,000,000

Eliminate GSA rent increase at OSC Martinsburg -1,448,000

Eliminate new DOT initiatives -498,000

Selected reductions in headquarters staffing -1,000,000

Non-pay COLA adjustment -10,000,000

Non-operational travel -2,500,000

Advisory and assistance services -2,000,000

Capitalizable projects (transfer to AC&I) -8,000,000

Raise fee rates for existing user fees and reimbursements -3,500,000

WLB primary crew assembly facility (transfer to AC&I) -548,000

Eliminate seven overseas liaison billets -560,000

Reduced OPTEMPO for national defense activities (050 reduction) -9,000,000

-71,705,000

COUNTER-DRUG INITIATIVE

The Committee recommends $406,091,000 for operating expenses of the

Coast Guard dedicated to counter-drug operations. This is $39,963,000

(10.9 percent) above the fiscal year 1998 estimated level and

$33,800,000 (9.1 percent) above the budget estimate. As was discussed in

an earlier section of this report, the Committee believes that an

expanded Coast Guard role is needed in the drug interdiction area, even

if it comes at the expense of lower priority mission areas. The

Committee notes that the Coast Guard expanded its drug interdiction work

significantly in fiscal year 1997 through the reprioritization of

activities and missions, and the results were highly successful. Not

only did the gross amount of seized drugs go up, but the Coast Guard's

efficiency statistics improved significantly also. By contrast, the

President's budget for fiscal year 1999 would redirect those resources

back into other activities, which would, according to the Coast Guard,

result in a drop in counter-drug cutter operating hours of 25 percent

and an estimated 14 percent drop in the amount of cocaine seized. The

Committee believes these additional funds are critical to sustaining,

and even improving upon, the successes achieved in fiscal year 1997. In

addition, the bill increases by $2,000,000 the Coast Guard Reserve

appropriation, partially in recognition of the important work of the

reserves in the drug interdiction arena. Specific activities funded with

this increase are explained below.

Increase HH 65 and C 130 patrol hours. --These increases were

originally requested by the Coast Guard, and certified by the Office of

National Drug Control Policy, but not included in the President's

budget. The Committee believes it important to increase surveillance

patrol hours. (+$2,930,000).

Patrol boat-related activities. --The Committee bill adds funds to

increase the operational hours of patrol boats performing drug

interdiction missions (+$7,478,000), maintain seven patrol boats

currently in service which would otherwise be decommissioned

(+$4,508,000), and take into the service, for the specific purpose of

enhancing counter-drug operations, a PC 170 (``Cyclone'' class) vessel

currently under control of DOD's Special Operations Command. The

Committee understands that the Coast Guard has been evaluating this

vessel for such operations, and believes it has high utility for their

drug interdiction activities. Hull fourteen is available and the bill

assumes the Coast Guard will work out an arrangement with the DOD for

the Coast Guard to operate and maintain this vessel specifically for

counter-drug work.

Increase international law enforcement training. --This increase was

originally requested by the Coast Guard, and certified by the Office of

National Drug Control Policy, but not included in the President's

budget. The Committee believes it important to increase such training.

(+$1,100,000).

Support vessels. --The Committee bill provides funds for the Coast

Guard to reactivate two T AGOS ocean surveillance vessels to serve as

afloat command and control and support ships for other surface vessels

in the Caribbean (and possibly Pacific) area of operations. This will

free up other, large Coast Guard vessels (such as 378-foot and 270-foot

cutters) for more effective counter-drug activities. The bill also

provides an additional $2,178,000 for the Caribbean support tender

included in the budget request at a lower funding level. This vessel is

designed to provide training support and other assistance to Caribbean

nations which are often used as trans-shipment points for illegal drugs.

For example, the Coast Guard has recently transferred to some of these

nations decommissioned patrol boats. However, without training

assistance, these small island nations are incapable of using the assets

to their maximum effectiveness. The support tender will provide such

assistance.

Activate HU 25 (``Falcon'') jets. --The Committee bill provides

$4,607,000 for the Coast Guard to recommission three HU 25 jets which

have been mothballed due to budget constraints. Additional funds are

included under AC&I for engine overhauls of these aircraft.

Drug detection sensors. --The bill includes $1,000,000 for

additional portable drug detection sensors. The Coast Guard currently

has 50 such sensors and has found them extremely valuable in

counter-drug operations. The bill would provide for the procurement of

approximately 10 more of such systems. The Coast Guard should explore

all available systems currently on the market, and procure those which

best satisfy their requirements.

Intelligence support. --The bill provides an additional $948,000 for

the Coast Guard to increase its intelligence collection efforts related

to counter-drug operations.

Activities Guyaquil and Esmeraldas, Ecuador. --Of the funds provided

in this account, $500,000 is specifically to augment and build up Coast

Guard and port control activities in Guyaquil and Esmeraldas, Ecuador.

PERSONNEL RESOURCES

The bill includes $1,728,260,000 for pay and allowances of Coast

Guard military and civilian personnel, a reduction of $34,211,000 from

the budget estimate and $25,962,000 (2.1 percent) above the fiscal year

1998 enacted level. Within the amount provided, the bill includes all

funds requested for special pays for military personnel.

Eliminate 79 new officer billets. --Given the high

officer-to-enlisted ratio in the Coast Guard relative to the other

military services, the Committee does not accept the need to expand the

officer corps, as requested in the budget. The Committee recommendation

eliminates the additional 79 officer billets, resulting in a reduction

of $5,736,000.

Restoration of FTE savings from fiscal year 1998. --The Committee

recommendation deletes the requested restoration of $15,000,000 from

staffyear reductions made in fiscal year 1998. The Committee is not

convinced, after reviewing actual and projected recruiting data, that

the service will be able to meet its recruiting target, given the strong

national economy. Therefore, these savings are maintained in the fiscal

year 1999 bill.

College fund recruiting initiative. --The Committee recommendation

deletes the new college fund recruiting initiative pending Congressional

authorization and stronger program justification. This results in a

savings of $545,000.

Reductions in headquarters staffing. --The recommendation assumes

reductions in certain headquarters offices, based on a review of current

staffing levels. These offices include the office of the commandant and

vice commandant, public affairs, Congressional affairs, general counsel,

and the office of bridge administration. These five offices are budgeted

for a total of 191 positions in fiscal year 1999. The reduction of

$1,000,000 would require the elimination of approximately 12 of these

positions, or six percent. The Coast Guard should review the staffing in

these offices and decide which low priority positions should be

eliminated.

PCS reassignment moves. --The bill holds funding for permanent

change of station (PCS) reassignment moves to the fiscal year 1997 level

of $9,761,000, a reduction of $1,370,000 from the budget estimate. Given

downsizing, streamlining, and other personnel reductions in the bill,

the Committee believes the service will be able to manage a slightly

lower level of accessions and reassignments. This does not affect

funding for other PCS move categories.

Elimination of seven overseas billets.-- The Committee believes the

Coast Guard should eliminate seven overseas liaison positions, given the

high cost of maintaining staff overseas and overall budget constraints.

These positions are as follows:

Royal Australian Navy liaison (Australia) (1)

Maritime Liaison Commander, Middle East Forces (Bahrain) (2)

Royal Canadian Air Force liaison (Canada) (2)

International Maritime Organization liaison (Curacao) (1)

Harbor Defense liaison (Korea) (1)

This results in a reduction to the budget estimate of $560,000.

Additional reduction.-- The Committee recommends an additional

reduction of $10,000,000 to military pay and benefits to bring the

overall amount provided to $1,261,110,000, a 1.2 percent increase over

fiscal year 1998. The reduction is due to budget constraints. The

Committee also acknowledges the increase in cost per FTE staffyear in

fiscal year 1998, and assumes that the Coast Guard will be able to

manage its personnel budget at a slightly lower cost per FTE during

fiscal year 1999 than assumed in the President's budget request.

OPERATING FUNDS AND UNIT LEVEL MAINTENANCE

The bill includes $618,145,000 for Coast Guard non-personnel

operating funds for field and headquarters facilities and units as well

as unit-level maintenance. This is $1,448,000 (0.2 percent) below the

administration's request and $678,000 (0.1 percent) above the level

provided for fiscal year 1998.

Ballast water management program.-- Of the funds provided in this

appropriation, $3,000,000 shall be allocated to implement the nationwide

ballast water management program, as authorized in the National Invasive

Species Act of 1996 (Public Law 104 332).

Mackinaw. --The bill includes the $6,291,000 in requested funding

for continued operation and maintenance of the icebreaking cutter

Mackinaw during fiscal year 1999. This is 12.1 percent above the

$5,609,000 estimated for fiscal year 1998.

GSA rent increase, operations support center. --The bill does not

include the requested increase of $1,448,000 for additional GSA rental

costs at the Coast Guard Operational Support Center in Martinsburg, West

Virginia. The service has not adequately explained whether such

large-scale consolidation of support activities has been determined to

be cost-beneficial at this particular location.

Frying Pan Shoals lighthouse.-- The Committee recognizes that the

Frying Pan Shoals Lighthouse, operated by the U.S. Coast Guard off the

coast of North Carolina, can be a valuable asset to marine science and

to the short- and long-term monitoring of critical oceanographic,

meteorological, and biological research in the coastal waters of the

southeastern United States. The Committee urges that the use of this

facility be provided to the University of North Carolina at Wilmington

for these purposes.

Marine safety detachment .--The Committee is concerned about the

Coast Guard's planned closure of the marine safety detachment in

Concord, California and its impact on the protection of the local marine

environment from significant oil and chemical traffic and on timely and

efficient response to oil and chemical accidents in the sensitive and

busy waterways of the Carquinez Strait and other Bay and Delta

waterways. The Committee directs that the Coast Guard shall not obligate

any funds to begin the closure or termination of this unit until: (1)

the Coast Guard enters into discussions with Contra Costa County

officials concerning the impact of the closure; (2) the Coast Guard

submits a report to the House and Senate Committees on Appropriations

that explains how the Coast Guard will assure the timely and efficient

response to oil and chemical accidents in the area and continue to

perform other critical oversight functions concerning oil and chemical

traffic in these waterways; and (3) the Committees have had thirty

legislative days to review the Coast Guard report.

DEPOT LEVEL MAINTENANCE

The Committee recommends $389,641,000 for depot level maintenance for

shore facilities, electronic equipment, cutters, boats and aircraft, the

same as the budget estimate and $5,465,000 (1.4 percent) below the

enacted level for fiscal year 1998.

ACCOUNT-WIDE ADJUSTMENTS

The Committee recommends $36,046,000 in account-wide adjustments,

which are explained more fully below.

Departmental initiatives. --The bill does not include funds for new

departmental initiatives including the electronic grants pilot project,

acquisition training, and GSA common space rent, due to lack of

justification. This is similar to recommendations made in other parts of

the bill, and results in a savings of $498,000.

Non-pay inflation adjustment. --The Committee recommendation

provides the Coast Guard with the same non-salary inflation adjustment

provided to other agencies within DOT. The President's budget requested

an increase of 1.7 percent compared to 0.9 percent for other agencies.

This results in a reduction of $10,000,000.

Non-operational travel. --Notwithstanding Congressional reductions

in fiscal year 1997 which were designed to contain the travel budget,

the Coast Guard testified this year that ``despite these actions, it

does not appear that non-operational travel was reduced''. The Committee

reiterates that these travel costs should be going down, not up, and

recommends a reduction of $2,500,000.

Advisory and assistance services. --The recommended reduction of

$2,000,000 is due to budget constraints and lack of justification. The

recommended level is $9,779,000, which compares to $11,779,000 in the

budget estimate and $4,151,000 experienced for fiscal year 1997. A

similar reduction has been made in the FAA's operating account.

Capitalizable projects. --The Committee recommendation reflects a

recent report of the Office of Inspector General, which concluded that

many Coast Guard construction projects were improperly using operating

expenses (OE) funds instead of acquisition, construction, and

improvement (AC&I) funds. The recommendation transfers $8,000,000 to the

AC&I appropriation to more appropriately reflect the nature of the work

being performed.

Fee rates for existing user fees. --While the Committee does not

support the imposition of new user fees for Coast Guard services, Coast

Guard documents indicate that the service is not charging enough in its

existing fees to recover the direct cost of providing the service. The

Committee believes that when a decision is made to charge fees, it is

reasonable for the agency to recover the full cost of providing the

service. The recommendation assumes the Coast Guard will raise existing

fee rates by approximately 15 percent, to cover a larger percentage of

total cost. This results in a reduction to the budget estimate of

$3,500,000.

WLB primary crew assembly facility.-- The recommendation transfers

$548,000 from ``Operating expenses'' to ``Acquisition, construction, and

improvements'' to more appropriately reflect the nature of the work

being performed. The Coast Guard advised the Committee that an error had

been made in preparation of the budget, and that this facility should be

funded in the AC&I appropriation.

Reduced operating tempo for national security activities (050

reduction).-- The Committee recommendation provides $300,000,000 for

national security activities of the Coast Guard, which are scored under

budget function 050 (national defense). This is the same amount as

enacted for fiscal year 1998, and a reduction of $9,000,000 from the

budget estimate. The Coast Guard has not adequately explained what

additional defense activities would be performed with their requested

increase, and in any event the Committee's allocation under budget

function 050 is limited to the level provided for fiscal year 1998. The

Committee assumes the Coast Guard will make a slight adjustment in the

operating tempo for defense activities to live within this funding

level.

BILL LANGUAGE

Defense-related activities.-- The bill specifies that $300,000,000

of the total amount provided is for defense-related activities, the same

as enacted for fiscal year 1998, but $9,000,000 below the budget

estimate.

Executive order 12839.-- The bill specifies that the Commandant

shall reduce both military and civilian employment for the purpose of

complying with executive order 12839. This provision has been included

in the bill for several years without change.

User fees.-- The Committee does not approve the proposed bill

language which would allow the Commandant to promulgate virtually any

new maritime user fee, circumventing the normal process by Congressional

direction, and credit those fees to the capital account. First, the fee

proposal is so weakly justified that the Committee has been unable to

give the proposal serious consideration. For example, when the Committee

questioned the Commandant this year about the proposal, he stated ``we

just started our study . . . we are not in it deeply enough to know that

that is proper to do''. When asked how the Coast Guard arrived at the

specific request of $35,000,000 in new fees, the Commandant said ``I

have no idea how they did that''.

The Congressional Budget Office is so skeptical, they are unwilling

to assume the collection of any such receipts next year, despite the

proposed language. Clearly, with so little information, these fees--and

the appropriations to be financed with them--are unsustainable.

The Committee is concerned that, despite the lack of justification,

the Coast Guard believes it has the authority to promulgate these fees

under the general authority of the User Fee Statute. Therefore, the bill

includes a provision which precludes the Coast Guard from using funds to

plan, finalize, or implement any new user fees unless legislation signed

into law after the date of enactment of this Act specifically authorizes

them.

GENERAL PROVISIONS

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

bill continues as a general provision (sec. 312) language that would

prohibit funds to plan, finalize, or implement regulations that would

establish a vessel traffic safety fairway less than five miles wide

between the Santa Barbara traffic separation scheme and the San

Francisco traffic separation scheme. On April 27, 1989, the Department

published a notice of proposed rulemaking that would narrow the

originally proposed five-mile-wide fairway to two one-mile-wide fairways

separated by a two-mile-wide area where offshore oil rigs could be built

if Lease Sale 119 goes forward. Under this revised proposal, vessels

would be routed in close proximity to oil rigs because the two-mile-wide

non-fairway corridor could contain drilling rigs at the edge of the

fairways. The Committee is concerned that this rule, if implemented,

could increase the threat of offshore oil accidents off the California

coast. Accordingly, the bill continues the language prohibiting the

implementation of this regulation.

Blue-ribbon panel on the future of the Coast Guard. --The Committee

is very concerned about the Coast Guard's ability to address all of its

missions adequately in future years, given budget constraints and the

effect of surface transportation firewalls. Although the service has

performed admirably over the past four years in reforming and

reorganizing itself into a more efficient organization, it is possible

that there will still be insufficient funding over the next ten years to

enable the Coast Guard to maintain today's level of service. The Coast

Guard's operating budget has been flat for the past several years, and

block obsolescence of major capital assets is approaching. Last year,

the Commandant advised the Subcommittee that the Coast Guard would soon

require a capital appropriation of $1,000,000,000 per year for ten

years. Today, the Coast Guard's capital budget is approximately

$400,000,000.

To address these concerns, the Committee bill includes $1,000,000

specifically for establishment of a blue-ribbon panel to study the

future capital needs, roles, and missions of the Coast Guard. This panel

should be coordinated through the auspices of the office of the

secretary of transportation, and should include the current Commandant

of the Coast Guard, former commandants, and representatives of the U.S.

General Accounting Office, the DOT Office of Inspector General and

appropriate maritime organizations. The study should address and make

recommendations on the best roles and missions for the Coast Guard over

the next twenty years, and the capital budget requirements to meet those

needs, considering likely budget constraints over that period. The

Committee intends that this take the place of the currently-planned

Presidential Advisory Council, which would study Coast Guard roles and

missions, but at a much higher cost. The study should be submitted to

the Congress not later than January 2001.

Animal fats and vegetable oils. --The Committee bill includes a

general provision (sec. 340) which requires the Secretary of

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

regulation consistent with the Edible Oil Regulatory Reform Act (Public

Law 104 55), enacted on November 20, 1995, to specifically address

facilities which handle animal fats and vegetable oils by amending 33

C.F.R. part 154, which relates to response plans for marine

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

fats and 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. On March 14, 1997, the animal fats and vegetable oils

industry submitted to the Coast Guard a proposal consistent with these

requirements.

ACQUISITION, CONSTRUCTION, AND IMPROVEMENTS

Appropriation, fiscal year 1998 $388,850,000

Budget estimate, fiscal year 1999\1\ 442,773,000

Recommended in the bill 389,000,000

xlBill compared with:

Appropriation, fiscal year 1998 +150,000

Budget estimate, fiscal year 1999 -53,773,000

\1\Includes $35,000,000 to be derived from new user fees.

The bill includes $389,000,000 for the capital acquisition,

construction, and improvement programs of the Coast Guard for vessels,

aircraft, other equipment, shore facilities, and related administrative

expenses, of which $20,000,000 is to be derived from the oil spill

liability trust fund.

Consistent with past practice, the bill also includes language

distributing the total appropriation by budget activity and providing

separate obligation availabilities appropriate for the type of activity

being performed. The Committee continues to believe that these

obligation availabilities provide fiscal discipline and reduce long-term

unobligated balances.

COMMITTEE RECOMMENDATION

The following table compares the fiscal year 1998 enacted level, the

fiscal year 1999 estimate, and the recommended level by program, project

and activity:

Offset Folios 31 to 32 Insert Here

Vessels

The Committee recommends $227,913,000 for vessels, a reduction of

$15,813,000 below the amount provided for fiscal year 1998 and

$41,660,000 below the administration's request. Specific adjustments to

the budget estimate are explained below.

Seagoing buoy tender (WLB) replacement.-- The Committee recommends

$81,790,000 for this program, instead of $105,000,000 included in the

budget estimate. Funding of $41,000,000 was provided for this program in

fiscal year 1998. The recommendation transfers $548,000 from ``Operating

expenses'' for the primary crew assembly facility and deletes the

$1,500,000 for each of the first three vessels of this class. It is not

clear to the Committee why additional acquisition funding is needed,

since these vessels are fully operational. The additional reduction is

due to budget constraints. The Committee expects the Coast Guard to

provide the Committee with updated information on the cost profile for

the vessels to be acquired under the full production contract prior to

conference deliberations on this bill.

Coastal buoy tender (WLM) replacement.-- The Committee recommends

$27,000,000 for the coastal buoy tender program, a reduction of

$4,000,000 below the budget estimate. The reduction is due to budget

constraints.

Buoy boat, stern loading (BUSL).-- The Committee recommends

$7,073,000 for this project, a reduction of $4,700,000 below the budget

estimate. The reduction is due to budget constraints.

Surface search radar.-- The Coast Guard budget includes $12,900,000

for this project in fiscal year 1999 and projects $4,000,000 in the year

2000. The Committee believes it more appropriate to phase this

acquisition more smoothly over the two remaining years of the program.

The Committee's recommended funding level of $8,450,000 would eliminate

the funding ``spike'' represented by the President's budget estimate.

This results in a reduction of $4,450,000 from the budget estimate.

Polar class icebreaker reliability improvement project.-- According

to the Coast Guard, this project is approximately six years behind its

original schedule. Given the schedule slip, the apparently low priority

of the program within the Coast Guard, and the Committee recommendation

to reduce operating funds for the polar icebreaker class, the Committee

recommends that this project be ended. This will save approximately

$25,000,000 in future fiscal years, which can be applied to other,

higher priority projects. This results in a fiscal year 1999 savings of

$6,100,000.

Coastal patrol boat.-- The Committee recommends $47,600,000 for the

``Barracuda'' class coastal patrol boat. This compares to $63,000,000

enacted in fiscal year 1998 and $37,600,000 in the budget estimate. The

additional $10,000,000 is part of the Committee's counter-drug

initiative, as explained in a previous section of this report.

Mackinaw replacement.-- The recommendation includes $6,000,000 to

continue design work for a replacement for the icebreaking cutter

``Mackinaw''. Funding of $2,000,000 was provided in fiscal year 1998.

Although the President's budget included no funding to continue this

work in fiscal year 1999, the Committee believes it is critical to keep

this work going, to ensure that a replacement vessel is developed as

soon as practicable. The Committee fully expects the conceptual design

phase of this project to be completed by the end of fiscal year 1999, so

that design and construction contracts can be awarded the following

year. Moreover, the Committee expects the Coast Guard to issue a report

to the House and Senate Committees on Appropriations on the status of

this project, including the recommended replacement alternative and

fleet mix (with supporting data), as well as an update on the design

process, no later than January 1, 1999.

Deepwater capability concept exploration.-- The Committee recommends

$20,000,000 for this program, an increase of 300 percent above the

$5,000,000 provided for fiscal year 1998, and a reduction of $8,000,000

below the budget estimate. A comparison of the Committee's allowance and

the budget estimate is as follows:

Activity Budget estimate Committee allowance Reduction

Project resident office $1,500,000 $1,000,000 -$500,000

Contract studies 18,000,000 15,000,000 -3,000,000

Independent studies 8,500,000 4,000,000 -4,500,000

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

Total 28,000,000 20,000,000 -8,000,000

ATS 1 conversion.-- The Committee recommends $2,000,000 to continue

conversion of the former U.S. Navy ship ``Edenton'' to a Coast Guard

fisheries enforcement cutter. This is due to overall budget constraints

and the Committee decision to elevate counter-drug acquisition

activities to a higher priority than fisheries enforcement. The budget

estimate included $10,000,000 for this project.

Reactivation of 2 T AGOS vessels. --The recommendation includes

$9,900,000 to reactivate 2 former Navy T AGOS ocean surveillance

vessels, as part of the Committee's counter-drug initiative. Consistent

with Coast Guard concept papers, at least one of these vessels could

serve as a base ship for patrol boats and other relatively small assets

performing counter-drug activities in the Caribbean area of operations,

thereby increasing the endurance and effectiveness of those assets.

Unobligated balance transfer. --The Committee recommends a general

reduction of $9,100,000 which should be addressed by transferring

unobligated balances from the following program:

Project Fiscal year 1997 funds Fiscal year 1998 funds

Polar icebreaker RIP -$3,800,000 -$5,300,000

Aircraft

The Committee recommends $39,400,000 for aircraft, an increase of

$13,600,000 (52.7 percent) above the fiscal year 1998 enacted level and

$2,269,000 above the administration's request.

HC 130 engine conversion. --The Coast Guard budget proposes a large

increase in this program, from $4,100,000 to $9,900,000. The Committee

notes that some AC&I programs must be reduced, since the level of the

budget submission assumed collection of $35,000,000 in new user fees

which are unlikely to be implemented. The Committee believes this

program can proceed at the fiscal year 1998 pace without serious impact.

HH 65 helicopter. --The Committee understands that there are power

availability, weight considerations, space constraints and safety margin

issues with the HH 65 helicopters that need to be addressed before

equipment and capability can be added to this already weight critical

aircraft. The Committee requests the Coast Guard provide a description

of the limitations with relevant measures of how frequently power

limitations restrict the HH 65 below original Coast Guard requirements

and the impact of such limitations. The Committee further requests an

outline of a plan and its costs to restore needed power margins while

accommodating past and future weight growth. This report is request by

March 1, 1999.

Long range search aircraft capability preservation. --According to

the Coast Guard, this project involves studies to sustain the existing

capability of the C 130 aircraft, including electrical systems and

avionics. The product of the work is expected to result in the design of

modification kits costing in the range of $200,000. The Committee

believes this work could easily and appropriately be conducted under the

Coast Guard's operating appropriation, and not AC&I. In addition, the

project has been poorly justified, and outyear costs are not defined.

The Committee recommends no AC&I funds for this project, but the Coast

Guard may use existing OE funds under the aircraft modification budget

through reprioritization of planned work. This results in a reduction of

$1,590,000 from the budget request.

HU 25 engine overhaul. --The recommendation includes $9,100,000 to

conduct engine overhauls of mothballed HU 25 (``Falcon'') jet aircraft,

as part of the Committee's counter-drug initiative. According to the

Coast Guard, maritime patrol surveillance is their greatest need in the

counter-drug area. The Coast Guard is familiar with these aircraft and

have existing inventories of spare parts. However, some work is required

on the engines to bring the aircraft back into service.

Low signature aircraft. --The Coast Guard operational community has

indicated a need for additional night-capable, low-signature

(``stealthy'') aircraft capability. Although the RU 38A aircraft are now

coming into service, upgrades are necessary for them to be more

effective at fighting the drug war. In addition, the Coast Guard has

expressed interest in high technology, low signature rotorcraft

technology which could have an impact on counter-drug operations. The

Committee recommendation includes $2,000,000 for the Coast Guard to

pursue modifications or acquisitions in this area, with the specific

objective of complementing other counter-drug assets by providing covert

surveillance capability.

Unobligated balance transfer. --The Committee recommends a general

reduction of $1,400,000 which should be addressed by transferring

$1,400,000 in unobligated balances from the terminal collision avoidance

system (TCAS) program.

Other Equipment

The Committee recommends $30,314,000 for other equipment, a reduction

of $3,655,000 below the budget estimate.

Marine information for safety and law enforcement (MISLE).-- Due to

budget constraints, the recommendation holds funding for this project at

essentially the fiscal year 1998 level of $4,000,000, a reduction of

$2,000,000 from the budget estimate.

Aviation logistics management information system (ALMIS). --The

Committee denies the requested $1,000,000 for this project due to lack

of justification.

Differential GPS phase II. --The Committee recommends no funding for

this project due to lack of justification and a need to fund higher

priority counter-drug initiatives, a reduction of $2,600,000 from the

budget estimate. Although most of the Coast Guard's differential GPS

program has been completed, this appropriation would fill coastal gaps

in the system, particularly in Alaska, Guam, Puerto Rico, and Hawaii.

Drug interdiction sensors. --The bill includes $9,000,000 for the

acquisition of sensors used in counter-drug operations, including cutter

and aircraft sensors as well as portable drug detection sensors used for

ship boardings. The Coast Guard is accorded the flexibility to determine

the best mix of sensors to satisfy operational requirements and have the

most immediate impact on the drug war.

Unobligated balance transfer. --The Committee recommends a general

reduction of $7,055,000 which should be addressed by transferring

unobligated balances from the following programs:

Project Fiscal year 1997 funds

ALMIS -$3,100,000

Conversion of software -3,500,000

VTS requirements evaluation -455,000

Shore Facilities and Aids to Navigation Facilities

The Committee recommends $42,923,000 for shore facilities and aids to

navigation facilities, a reduction of $10,727,000 from the budget

estimate.

Public family quarters. --The Committee recommends $2,300,000, a

reduction of $16,300,000 below the budget estimate. The Committee has

long been concerned that the Coast Guard sometimes requests funds for

housing projects with insufficient market analysis or other supporting

justification. For example, in July 1992, the Committee report on the

fiscal year 1993 DOT and Related Agencies Appropriations Bill stated:

``The Committee is concerned that the Coast Guard

is not effectively managing the family housing acquisition

program . . . [projects] often end up in the budget with

outdated and insupportable planning documents. In particular,

the market surveys which serve as a primary justification are

often so old that they are meaningless by the time funding is

requested . . . Although the Coast Guard's planning and

programming manual requires that housing needs be under

constant review, it appears that re-evaluation occurs rarely

if at all . . . Future support from the Committee will be

dependent upon management improvements.''

Considering this, the Committee was very disappointed to receive a

report from the Office of Inspector General in April 1998 which found

that 9 of the 14 housing projects reviewed (almost two-thirds) were not

adequately justified. It appears the service has not made the

improvements suggested by the Committee in 1992. According to the IG

report, the Coast Guard has $16,300,000 in unobligated appropriations

for unjustified projects in Sault Ste. Marie, Michigan; Valdez, Alaska;

Oregon Inlet, North Carolina; and Cape Hatteras, North Carolina which

could be put to better use. The Committee recommendation reduces the

budget request by this amount and directs the Coast Guard to apply these

unobligated funds to cover fiscal year 1999 budget requirements. The

Committee also directs the Coast Guard, once again, to correct these

longstanding problems.

Waterways aids to navigation projects.-- The Committee recommends

$4,073,000 for waterways aids to navigation projects, a reduction of

$927,000 from the budget estimate. The reduction is due to budget

constraints.

Group/Station New Orleans, LA-relocation. --The Committee recommends

$4,000,000 to continue the relocation of Group/Station New Orleans to

Bucktown Harbor. These funds are provided to complete any remaining work

to improve the condition of the waterway adjoining the relocation site,

including dredging, bulkhead repairs, and bulkhead replacement, and, as

a second priority, other aspects of the project. Similar funding was

provided for this project last year.

Air Station Miami, FL, renovate fixed wing hangar. --The Committee

believes that, given budget constraints and the need to fund higher

priority counter-drug initiatives, this project can be phased over two

years at approximately the same level each year. This will also reduce

the concurrency in this program, which appears to be unnecessary. This

results in a reduction of $3,500,000 from the budget request, which is

without prejudice to the overall program.

Capitalizable projects. --The Committee recommends a transfer of

$8,000,000 from ``Operating expenses'' to ``Acquisition, construction,

and improvements'' based upon an IG report which found the Coast Guard

inappropriately budgeting in operating expenses projects which should

have been funded from the AC&I budget. The IG selected 45 projects

totaling $25,000,000, and concluded that 32 of the projects (71 percent)

should have been funded from the AC&I appropriation. These included

acquisition of office space, expansion of building capacity, and

construction of a parking lot. The Committee agrees with the IG that

these activities are more appropriately funded from the capital account,

and encourages the Coast Guard to make such changes permanent beginning

in the year 2000 budget.

Training infrastructure, optimize.-- The Committee bill includes the

requested funds for studies, preliminary design and engineering for

facility renovations related to a possible reconfiguration of the Coast

Guard's training facilities. The Committee directs the Coast Guard to

submit its planned report, ``Training 2000'', once it is completed, to

the Committee. The Committee expects that the Coast Guard will obligate

no funds nor take any other actions to consolidate or eliminate any

training facilities until the Committee has had thirty legislative days

to review the Coast Guard report.

Asset sales. --The Committee recommendation assumes a slightly

higher amount of offsetting collections from asset sales in fiscal year

1999 than the budget estimate. Last year, the estimate for fiscal year

1999 was $3,800,000. However, the level assumed in the President's

budget is only $948,300--the lowest amount in three years. Last year,

the Coast Guard listed 29 properties which they believed could be

excessed. To date, only 14 have been excessed, and the budget assumption

would only raise that level to 17. The Committee believes the Coast

Guard could move more aggressively in this area, and accordingly reduces

the request by $2,000,000.

Personnel and Related Support

The bill includes $48,450,000 for AC&I personnel and related support,

an increase of $1,450,000 (3.1 percent) above the fiscal year 1998

enacted level, and the same as the budget estimate. Of the funds

provided, $750,000 is for core acquisition costs.

Quarterly acquisition reports. --The Coast Guard is directed to

continue submission of the quarterly acquisition reports to the House

and Senate Committees on Appropriations. The Coast Guard is to continue

including with each such report an up-to-date listing of unobligated

balances by acquisition project and by fiscal year, a Congressional

direction first implemented in fiscal year 1996.

Bill Language

Disposal of real property. --The bill includes a provision first

enacted in fiscal year 1996 crediting to this appropriation proceeds

from the sale or lease of the Coast Guard's surplus real property. This

provision was requested in the President's budget. The bill 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 $3,000,000, resulting in a corresponding savings in budget

authority.

ENVIRONMENTAL COMPLIANCE AND RESTORATION

Appropriation, fiscal year 1998 $21,000,000

Budget estimate, fiscal year 1999 21,000,000

Recommended in the bill 21,000,000

xlBill compared with:

Appropriation, fiscal year 1998

Budget estimate, fiscal year 1999

This appropriation assists in bringing Coast Guard facilities into

compliance with applicable federal, state and environmental regulations;

conducting facilities response plans; developing pollution and hazardous

waste minimization strategies; conducting environmental assessments; and

conducting necessary program support. These funds permit the

continuation of a service-wide program to correct environmental

problems, such as major improvements of storage tanks containing

petroleum and regulated substances. The program focuses mainly on Coast

Guard facilities, but also includes third party sites where Coast Guard

activities have contributed to environmental problems.

The recommended funding level of $21,000,000 is the same as the

budget request, and the same as the fiscal year 1998 enacted level.

ALTERATION OF BRIDGES

Appropriation, fiscal year 1998 $17,000,000

Budget estimate, fiscal year 1999

Recommended in the bill 12,000,000

xlBill compared with:

Appropriation, fiscal year 1998 -5,000,000

Budget estimate, fiscal year 1999 +12,000,000

The bill includes funding for alteration of bridges deemed a hazard

to marine navigation pursuant to the Truman-Hobbs Act. The Committee

does not agree with the approach of the administration that obstructive

highway bridges and combination rail/highway bridges should be funded

out of the Federal Highway Administration's discretionary bridge

account, and notes that this proposal was not included in the TEA21

conference report. This approach is unfair to some states which, under

existing highway formulas, have a more difficult time competing for

discretionary bridge grants and are therefore less likely to apply. In

addition, the purpose of altering these bridges is to improve the safety

of marine navigation under the bridge, not to improve surface

transportation on the bridge itself. Since in some cases, there are

unsafe conditions on the waterway beneath a bridge which has an adequate

surface or structural condition, Federal-aid highways funding is not

appropriate to address the purpose of the Truman-Hobbs program.

The Committee recommends $12,000,000 for two bridges which have been

funded in past years, including fiscal year 1998. Both of the bridges

for which funds are recommended are authorized and have been issued an

order to alter by the Commandant of the Coast Guard. The Committee

directs that, of the funds provided, $4,000,000 shall be allocated to

the Sidney Lanier highway bridge in Brunswick, Georgia and $8,000,000

shall be allocated to the Florida Avenue railroad/highway combination

bridge in New Orleans, Louisiana.

RETIRED PAY

Appropriation, fiscal year 1998 $653,196,000

Budget estimate, fiscal year 1999 684,000,000

Recommended in the bill 684,000,000

xlBill compared with:

Appropriation, fiscal year 1998 +30,804,000

Budget estimate, fiscal year 1999

This appropriation provides for the retired pay of military personnel

of the Coast Guard and the Coast Guard Reserve. Also included are

payments to members of the former Lighthouse Service and beneficiaries

pursuant to the retired serviceman's family protection plan and survivor

benefit plan, as well as payments for medical care of retired personnel

and their dependents under the Dependents Medical Care Act.

The Committee has approved the budget estimate of $684,000,000 for

this appropriation in fiscal year 1999. This compares to an

appropriation of $653,196,000 for fiscal year 1998, an increase of 4.7

percent. This is scored as a mandatory appropriation in the

Congressional budget process.

RESERVE TRAINING

Appropriation, fiscal year 1998 $67,000,000

Budget estimate, fiscal year 1999 67,000,000

Recommended in the bill 69,000,000

xlBill compared with:

Appropriation, fiscal year 1998 +2,000,000

Budget estimate, fiscal year 1999 +2,000,000

This appropriation provides for the training of qualified individuals

who are available for active duty in time of war or national emergency

or to augment regular Coast Guard forces in the performance of peacetime

missions. Program activities fall into the following categories:

1. Initial training. --The direct costs of initial training for three

categories of non-prior service trainees.

2. Continued training. --The training of officer and enlisted

personnel.

3. Operation and maintenance of training facilities. --The day-to-day

operation and maintenance of reserve training facilities.

4. Administration. --All administrative costs of the reserve forces

program.

The bill includes $69,000,000 for reserve training, an increase of

$2,000,000 (3 percent) above the fiscal year 1998 level. The

administration requested $67,000,000.

Reimbursement to ``Operating expenses''. --The recommendation

continues a provision originally enacted in fiscal year 1998 which

limits to $20,000,000 the amount of ``Reserve training'' funds which may

be transferred to ``Operating expenses''. The Coast Guard's budget

proposal assumes a transfer of $22,100,000. Given the small size of the

reserve training appropriation, and the declining size of the selected

reserve, the Committee wants to ensure the reserves are not assessed

excessive charge-backs to the Coast Guard operating budget. The

Committee continues to believe that, absent this provision, the proposed

level of reimbursement would be too high, especially given the

substantial amount of reserve augmentation workhours provided by the

reserves in direct support of Coast Guard missions.

The provision also prohibits the Coast Guard from instituting any

``direct charges'' which were not in effect during fiscal year 1997. The

Committee has learned that, in order to circumvent the reimbursement cap

imposed in fiscal year 1998, the service began charging reservists

directly for items which previously had been deducted from the ``Reserve

training'' appropriation, rather than absorb those costs from their

operating account. A new proviso has been added to stop this practice.

Size of the selected reserve. --The Committee is concerned about the

continued decline of the selected reserve and the Coast Guard's

ineffectiveness at stemming that decline. The reserve end strength has

dropped almost 40 percent over the past ten years--from 12,000 ten years

ago to approximately 7,300 at the end of January 1998. In fiscal year

1998, the appropriated level of funding should have been sufficient for

a reserve level of 7,800. However, the level at the end of January 1998

was only 7,299--a drop of 197 below the level only four months before.

The fiscal year 1999 budget proposal would drop reserve strength even

further, from 7,800 to 7,600, and require them to absorb the addition of

three new port security units with 126 billets each. These actions are

refuted by the Coast Guard's own study, recently prepared for the Office

of Management and Budget, which concluded that there are bona fide

requirements for a selected reserve of 12,200. The fiscal year 1999

budget proposal would fund only 62 percent of the requirement.

The Committee continues to believe that the reserves provide vital

contributions to Coast Guard and national security missions. For

example, in fiscal year 1997, the Coast Guard reserves contributed 9,624

staff-days to counter-drug operations. Although Coast Guard leadership

has spoken glowingly about the success of the anti-drug initiative known

as Operation Frontier Shield, they have not often mentioned that

reservists provided 25 percent of the total surge needed for that

operation. The Committee does not believe that the budget for the

reserve should be sacrificed further to fund increases for other

components of the Coast Guard budget, especially as the reserves are

asked more and more frequently to assist in supplementing the service's

regular day-to-day activities.

Recruiting. --The Committee is disappointed that, once again this

year, Coast Guard data presented to the Committee indicate the Reserve

is not meeting its recruiting goals. This not only reduces the size of

the reserve force, but raises costs unnecessarily. In fiscal year 1997,

the Coast Guard was able to meet 95 percent of its active duty

recruiting target, but only 71 percent of the reserve target. For this

reason, Congress added $1,000,000 last year for a more aggressive

reserve recruiting campaign. However, by the end of February 1998, the

Coast Guard had signed up only 136 new recruits--an indication that the

year-end goal of 1,313 may not be achieved. In testimony this year, the

Coast Guard stated that ``failure to meet reserve recruiting goals is a

continuing concern of the Coast Guard''. The Committee is likewise

concerned, and expects the new leadership team at the Coast Guard to

come up with solutions which more effectively address this problem.

Reserve personnel allowance list (RPAL). --Personnel management in

the Coast Guard reserves is accomplished through the reserve personnel

allowance list (RPAL). Billet requirements in the RPAL are specific with

regard to rank or rating, specialty and training (e.g., boatswain's mate

second class), which requires the service to recruit to a specific RPAL

vacancy. In the Navy, by contrast, less than half of the billets have

requirements so specific that they require an exact match to rate, rank,

and training. In addition, the Navy, Army, and Air Force each have

geographic restrictions on commuting distance which are less restrictive

than the Coast Guard. The Committee believes this inflexibility may be

one reason why the Coast Guard has been unsuccessful at meeting its

recruiting goals. The Committee strongly encourages the Coast Guard to

relax these billet and geographic restrictions, and allow similar

flexibilities to those allowed by the other military services.

RESEARCH, DEVELOPMENT, TEST, AND EVALUATION

Appropriation, fiscal year 1998 $19,000,000

Budget estimate, fiscal year 1999 18,300,000

Recommended in the bill 12,000,000

xlBill compared with:

Appropriation, fiscal year 1998 -7,000,000

Budget estimate, fiscal year 1999 -6,300,000

PAGE 1 PAGE 3 105th Congress Legislation Index