The first thing would be to define the roles of the National Weather Service, which is the single largest component, in turn, of NOAA. Define their core mission. The Weather Service currently operates with a core mission from the 1890's. I will remind you, Mr. Chairman, that the telephone was invented just in 1876. Well, 14 years later, the Weather Service mandate was written. It is 105 years old, and it needs to be updated. It has been virtually unchanged.

It needs, in short, to be brought from the 1890's into the 1990's by defining what is the most important, that is the core mission, of the Weather Service.

This has been started. In 1983 there was a management study and since then there have been a number of other studies defining what the core mission of the Weather Service. The core mission would be what most of us come to know the Weather Service for, and that would be everything from data collection, operating computer models, emergency warning of severe weather such as hurricanes, tornados and the like, and general public forecasting.

Unfortunately, the Weather Service undertakes a number of different functions that are not in keeping with its core mission and we believe could be reduced.

The House is now involved in its authorization bill, H.R. 1815, in defining its core mission. So we would encourage this Committee when it considers transferring, eliminating, or whatever ends up happening to Commerce to adopt similar language.

The second point is related to the first, and that is to privatize all the non-essential missions of the Weather Service. The Weather Service currently provides various industries and users free taxpayer-supported services. Some of these companies are household names. They do not have any right to get the taxpayer to pay for their operation any more than the taxpayer paying for the fuel in their truck fleet or whatever. That needs to be looked at. Those kind of examples are identified in a five-page appendix in the back of my testimony.

The privatization initiatives has been something that has been bipartisan. Vice President Gore's National Performance Review identified $3.3 million in savings just in this year which are already being done. NOAA is doing an excellent job in privatizing those functions this year. But $3.3 million still is about one-half of 1 percent of the Weather Service budget. There still could be a whole lot more that could be looked at. In fact, the Clinton Administration's budget identifies or lists $47 million, scores $47 million in this current budget cycle. It does not identify the $44 million that is not included in this year's budget. So there are some opportunities we believe even larger than $44 million, significantly larg

er.

The third step would be to consolidate the overlapping and duplicative structures of both the Weather Service and some of its agencies. NESDIS in the Weather Service, there has been a number of studies that have asked, why are these two different agencies separate? Why could they not be combined into one? I think that is a question that could well be asked.

The Weather Service currently has five headquarters offices, six regional offices. These regional offices do no forecasting, they do no

payroll. Those could be looked at. And let me say that the Administration is making some efforts in that regard insofar as consolidating some of the offices and sometimes they are prevented by Congress from doing that.

The fourth would be to encourage greater private sector, not only our members and the people who are in our membership, but encouraging all-as was done in the Paperwork Reduction Act which was passed by this Committee-encouraging weather data and information to get out there into the private sector to allow everybody from a hobbyist to a large company to have access to that data at the cost of dissemination or the like, and therefore encouraging private sources.

So we believe if those steps are taken, NOAA would be streamlined, would be a more efficient agency, would focus on its core mission like any company has to do, and would get rid of services that really have no benefit except to very identifiable and large companies.

Thank you very much.

[The prepared statement of Mr. Smith follows:]

PREPARED STATEMENT OF JEFFREY C. SMITH

Thank you Mr. Chairman and members of the Committee for inviting us to testify on issues related to the functions of the Department of Commerce and its agency, the National Oceanic and Atmospheric Administration (NOAA).

I am here today to give an overview of how the private sector can be encouraged to play a greater role in the delivery of NOAA programs, without any expenditure of taxpayer funds. This will allow the agency to focus on its important roles, thus serving the public better and at less cost.

I currently serve as the Executive Director of the Commercial Weather Services Association, the association for the commercial weather services industry. Our members, ranging in size from 2 to 270 employees, are entrepreneurs who created a new industry after WWI. That industry has expanded significantly in the past two decades and grows at a rate exceeding 10 percent annually.

While the private sector has grown, NOAA has grown even more. NOAA's budget has increased from $1.3 billion in fiscal year 1990 to $2 billion in fiscal year 1995. The largest percentage of NOAA's budget are the weather related agencies, which are the National Weather Service (NWS) and the National Environmental Satellite Data Service (NESDIS), which together made up 55 percent of the NOAA budget, approximately $1.1 billion in fiscal year 1995.

Significant budgetary savings can be achieved at these weather related agencies, through privatization, consolidation and promoting public access to data, as follows: 1. Define the National Weather Service's core mission

The National Weather Service currently operates under the legal authority granted by its 1890 Organic Act, which has remained virtually unchanged for 105 years. This Organic Act gives the NWS a wide and unfocused mission, which has resulted in the NWS providing services in direct competition with the private sector and in duplication of private sector sources. The first step needed is to bring the Organic Act from the 1890s into the 1990s by changing the Organic Act to define the NWS' core mission.

Various studies and recommendations, including a 1983 study by the Management Consulting firm Booz, Allen & Hamilton, have shown that the core mission of the NWS includes four elements: 1) data collection; 2) operating the computer models; 3) emergency warnings of severe weather; and 4) general public forecasting. The non-core activities currently undertaken by NWS, which compete directly with existing private companies include 1) industry specific weather forecasts and products; and 2) company and user specific forecasts and products; and 3) some public forecasts.

Requiring the government to focus on data collection, computer modeling, and weather warnings, and allowing the private sector to handle the non-core mission activities would reduce spending while increasing crucial emergency weather services. As represented graphically in Appendix 1, there is a larger role possible for the private sector, and a much reduced one for the Federal Government.

The 1996 NOAA Authorization Bill, H.R. 1815, as well as H.R. 1450, both propose comprehensive language to define the core mission of the NWS and privatize noncore mission activities. We urge that similar language be added to S. 929 as it is considered in this committee. That way the bulk of NOAA's programs will be restructured as the Commerce Department is eliminated.

2. Privatize all non-core NOAA weather services

The private sector is ideally suited to provide the non-core mission activities of industry and company and user specific forecasts and products. It currently serves a diversity of users small and large from boaters, farmers, pilots, and windsurfers, to airlines, construction firms, industrial agriculture, trucking, railroads, the media, ocean shipping and utilities. Most of these users need specific forecasts and products updated frequently, and tailored exactly for their needs. For example the media, including radio, televisions, and newspapers primarily use private weather sources, including both newspapers in Washington, all TV stations and all but six radio stations. Appendix 2 sites further examples.

But NOAA also provides direct services to some of these same interests, including aviation, agriculture, marine, and the media. The NOAA provided services benefit large companies and industries who get free services at taxpayer expense. This competes against existing private sector firms, and stifles investment and jobs in the private weather industry. Appendix 3 presents dozens of specific examples of this government competition.

The principle that industry, company, and user specific weather products are the realm of the private sector was recognized in a 1991 policy statement adopted by the NWS in consultation with OMB and the weather industry. This policy statement states: "the NWS will not provide a service if the service is provided, or can be provided, by the private sector." Unfortunately, because this policy statement does not have the force of law, it has not been followed. That's why the House NOAA Authorization proposes that the policy statement be put in law.

These privatization initiatives enjoy bipartisan support. The Clinton Administration, as part of the fiscal year 1996 Budget, proposed $3.3 million in NOAA privatization initiatives. These initiatives were the recommendations of Vice President Gore's National Performance Review, and the Administration's Budget stated that $44 million would be identified later. While steps have already been taken to privatize $3.3 million this year, unfortunately this additional $44 million has not been identified by the Administration.

3. Consolidate overlapping and duplicative structures of the NWS

New technology allows consolidation and elimination of the NWS structure, which will target resources on the core mission and permit economies of scale. The NWS has five headquarters offices, six regional offices, four national centers, and 334 field offices of different types. Many of these offices have overlapping organization and communication patterns. This fragmented structure is no longer necessary as new technology is put in place as part of the $4.5 billion NWS modernization program. 4. Promote greater public access to weather data and information

To encourage information dissemination and more private sources of weather, the NWS needs to make all of its weather data available at the cost of dissemination. Currently, the NWS withholds some crucial weather data collected at taxpayer expense, and has favored arrangements with certain groups to receive data for free. The NWS should be prohibited from making arrangements with anyone, including international sources, which restrict data received by NWS. Making all data, forecasts, and information accessible in a timely and equitable manner will allow entrepreneurs and members of the public to create new forecast and weather products to meet the needs for all users. This improved access to data recommendation is consistent with the provisions in the Paperwork Reduction Act [P.L. 104-13] inIcluded in the Contract with America.

However, as I read Section 214 of S. 929, this provision appears to be in direct conflict with the objective of increasing the private sector's role. If the government were to charge excessive fees on taxpayer collected data, few users could afford to provide the needed services, and it would stifle progress and entrepreneurship. As the Paperwork Reduction Act stated, the principle of promoting increased access to data at no more than the cost of making the data available, makes the most effective use of information technology. This principle has also been embodied in OMB circular A-130, and a number of major international agreements dealing with data. We recommend that Section 214 be written in such a way to be consistent with these principles on use and access to data.

Thank you for this opportunity.