Mr. Swenson also endorsed the Secretary's recommendation to elevate the Assistant Secretary for Food and Consumer Services to a position of Under Secretary, as well as the establishment of a new Under Secretary for Rural Economic and Community Development.

The National Farmers Union urged, however, the establishment of a State executive director for rural economic and community development. They also urged the creation of the Under Secretary for International Trade as an office in and of itself, in addition to an Under Secretary for Farm Services, Natural Resources and the Environment. The National Farmers Union recommended that the Natural Resources Conservation Service should be an agency within the office of this Under Secretary.

In closing, Mr. Swenson urged the committee to hold a series of field hearings to allow the State directors and committee members to play an integral part in the development of a new USDA.

The next witness to give testimony was Mr. Avram Pratt, Vice President, Washington_Electrical Co-op, Inc., East Montpelier, VT. Mr. Pratt is also the Director of the Vermont Office of Economic Opportunity, which administers a number of the USDA food and nutrition programs. Mr. Pratt endorsed Secretary Espy's proposed reorganization and supported the structural changes involved. He stressed the importance of economic diversity and economic development activities that focus on local resources. He supported the restructuring of those rural development programs that do not focus on agriculture under the Assistant Secretary for Small Community and Rural Development.

Mr. Harry L. Pearson, President, Indiana Farm Bureau Federation, Inc., Hartford City, Indiana was the next witness to give testimony. On behalf of the American Farm Bureau, Mr. Pearson expressed support for the need for change within the current USDA structure, but he questioned some of the uncertainties which exist. Number one, there is concern as to whether or not the service provided to farmers will be as good as the service provided under the current system. Secondly, will a new structure result in the deemphasis in the importance of otherwise valuable services? And thirdly, will agencies with a valuable mission be able to continue to pursue their goals in the newly restructured USDA?

Mr. Pearson did not support the shifting of responsibilities to other agencies as a consequence of the restructuring.

The next witness was Mr. Gerald Talbert, Director of Policy and Programs, National Association of Conservation Districts, Washington, D.C. Mr. Talbert also represented the National Association of State Conservation Agencies. As such, he was pleased with the introduction of Secretary Espy's plan and specifically with the creation of a Natural Resources Conservation Service and the Office of Agricultural Environmental Quality. He also said that he supports Secretary Espy's plan to start the reorganization at the top in Washington and work down to the field offices.

The next witness was Mr. Robert F. Odom, Commissioner, Louisiana Department of Agriculture and Forestry, Baton Rouge, on behalf of the National Association of State Departments of Agriculture. Mr. Odom strongly supported the reorganization of the USDA in order to move it into the 21st century, while recognizing

the difficulties inherent in any kind of restructuring. He was pleased with Secretary Espy's pledge to work with each State Department of Agriculture and with the people of the State to create one-stop service centers.

The last witness of the day was Mr. Steve Hollis, Legislative and Political Action Chair, Local 3354, American Federation of Government Employees, Washington, D.C. Mr. Hollis spoke on behalf of the front-line non-supervisory workers within USDA. His main point was that the workers need to be part of the process and as yet they do not feel included. He said that restructuring should result in improved pay, benefits and staffing levels among front-line workers because they are the ones responsible for customer service. He suggested reducing unnecessary layers of middle management and eliminating waste and abuse of the contracting-out program.

MARKUP

The Committee met in open session on Wednesday, March 9, 1994 to consider legislation to reorganize the Department of Agriculture. The bill presented to the Committee followed closely an outline of legislation requested by the Administration.1

Chairman Leahy began with his opening remarks describing the legislation as the first comprehensive overhaul of the Department of Agriculture since the 1930's. He described the bill as a $2.3 billion downpayment on reinventing government and a victory for American taxpayers. He further stated that the legislation will give Secretary Espy the tools he needs to bring the USDA into the 21st century and cut costs and improve services at the same time. Chairman Leahy then made a motion to report the bill.

Senator Lugar, in his opening remarks, commended the Chairman and Secretary Espy for bringing the plan before the committee after consultation with most members of the committee. Senator Lugar went on to discuss his letter of last July to Secretary Espy asking how many reports the Department is required to prepare for Congress. Senator Lugar remarked that there are 284 mandated reports which would cost $40 million if they were all completed. Senator Lugar went on to describe his amendment, included in the bill, which would require the Secretary to complete not more than 30 reports of his own choosing which are relevant to the workings of the Department. Senator Lugar indicated that if the Secretary believes there are more than 30 reports essential to agriculture, then he would be prepared to offer a substitute provision on the floor.

Chairman Leahy said that he felt it was time to look at the reports to see if some of them are still necessary. Senator Lugar concluded by commending the Chairman and Senator Kerrey for also working on this issue.

Senator Conrad asked for a brief description on the three issues that were of importance to most members: the structure of county

1 The Administration transmitted to the Committee on September 27, 1993 a draft bill "To authorize the Secretary to reorganize the Department of Agriculture, and for other purposes." See Appendix I.

On December 17, 1993 the Administration presented the Committee with "U.S. Department of Agriculture Reorganization Facts and Projections" which provided detailed information on Secretary Espy's Reorganization Plan. See Appendix II.

committees, the question of ASCS and cost share, and the land grant college research question.

Chief Counsel Jim Cubie explained that the present structure of county committees was kept. However, he explained that the Secretary is given the authority to consolidate committees in counties where there are just a few farmers left, provided he consults with the State committees to make sure it is done in a sensible fashion. Regarding the ASCS cost share issue, Mr. Cubie explained that the Administration had proposed transferring the cost share programs from the former Agricultural Stabilization and Conservation Service to the new Natural Resources Conservation Service and setting up a new local committee composed of equal numbers of representatives from the conservation districts and from the ASCS county committees which would make the decisions on cost share. A compromise was reached that allows the NRCS to set priorities and issue rules, with the concurrence of the Farm Service Agency. The final decision on which farmers get funds, upon the recommendation of the Natural Resource Conservation Service, rests with the local ASCS county committee.

Committee Staff Director Charles Riemenschneider explained how the Extension Service and the Cooperative State Research Service are combined into one agency of State level research, and the Federal research programs remain in a separate agency. Dr. Riemenschneider went on to explain that cost savings would be achieved by establishing common program policy development and budgeting staffs. The common program policy staff would coordinate Federal and State research programs.

Senator Craig was recognized next and he thanked Chairman Leahy and Senator Lugar for working cooperatively with him to put in a statement of goals for the Forest Service to give the service some parameters and direction.

Senator Kerrey praised the Secretary for keeping his promises on ethanol, wetlands, loan rates, and crop insurance. However, Senator Kerrey expressed his frustration that USDA is not implementing current law regarding planting flexibility. Senator Lugar suggested that a hearing be held. Chairman Leahy suggested that the Department of Agriculture first meet with Senator Kerrey and Senator Lugar and any other members interested in the issue to try and find a solution.

The Committee proceeded to favorably report the bill to the Senate by a rollcall vote of 17 ayes and 1 nay.

ROLLCALL VOTES

In accordance with paragraphs 7(b) and 7(c) of rule XXVI of the Standing Rules of the Senate, it is announced that:

A motion was made by Chairman Leahy to order reported favorably an original bill to authorize the Secretary of Agriculture to reorganize the Department of Agriculture. The motion was approved by a vote of 17 ayes and 1 nay as follows:

Boren proxy)

TITLE I. GENERAL AUTHORITIES OF THE SECRETARY

Sec. 101. Delegation of functions to the Secretary

This section delegates to the Secretary all functions, including all activities, officers, employees, and administrative units of the Department. Exempted from this general delegation are certain functions vested in administrative law judges, the Inspector General, the Chief Financial Officer, corporations and boards of directors and officers of corporations, and the Alternative Agriculture Research and Commercialization Board.

Sec. 102. Reorganization

This section gives the Secretary the necessary authorities to transfer, at the Secretary's discretion, the functions, administrative units, employees, property, and funds within the Department.

The Committee expects that the Secretary shall use this authority to increase the efficiency of the Department at the national, State, regional and local levels. The Committee also expects that the Secretary, to the extent practicable, will adapt the administration of programs to local conditions.

The source or authority for funding for every function of the Department prior to reorganization, whether or not the function is transferred by the Secretary, shall continue to be available for that function during and after reorganization.

This section also allows the Secretary to require exhaustion of administrative appeal procedures before appellants seek judicial re

view.

Sec. 103. Personnel reductions

Subsection (b) requires the Secretary to achieve employee reductions of at least 7,500 staff years by September 30, 1999.

Subsections (c) and (d) require that the percentage of employee reductions shall be substantially higher in the national headquarters than in the field structure, and that headquarters and field office reductions should be accomplished concurrently.

In achieving these personnel reductions, the Committee expects that the Department will, to the maximum extent possible, adhere

to the plan distributed on December 17, 1993 (see page 171 in Appendix II). Department wide, this plan calls for an 8.1% reduction in headquarters staff and a 6.5% reduction in field office staff.

Sec. 104. Consolidation of headquarters offices

This section requires the Secretary to develop and carry out a plan to consolidate the offices of the Department located in Washington, D.C.

The Committee expects that the Secretary will proceed with the strategic space plan released in November of 1992 to consolidate USDA headquarters facilities. Consolidating administrative operations at the existing sixteen scattered locations into two sites will eliminate the necessity for long term leasing of office space, provide substantial savings to taxpayers, and facilitate more efficient program management and coordination. It is understood that such consolidation is subject to available appropriations.

Sec. 105. Reports by the Secretary

This section requires the Secretary to review with the House Agriculture Committee and the Senate Agriculture, Nutrition, and Forestry Committee those reports which by law the Department is currently required to provide, but which should be eliminated.

In interpreting this section, the Committee notes that the Department should differentiate between reports that are studies and reports that are notifications. There are a number of requirements in existing legislation that require the Department to report or notify the Congress, the Committee, or the public when it decides to take a certain action. These include, for example, announcement of allocation of Export Enhancement Program bonuses, target prices and loan rates, and timber sale contracts. On the other hand, the term "report" is also used to refer to a number of studies that Congress has required to be performed. The requirement that the Department study the effect of world livestock prices on the United States is an example of a document that is referred to as a report that is in fact a study.

The Committee is primarily concerned with the costs of studies such as that described above. However, the Committee requests that the Department also identify "notification" type reports that are no longer necessary. The requirement to report each month on the number of food stamp recipients may be an example of a notification report that should be eliminated.

TITLE II. NATIONAL APPEALS DIVISION

Sec. 201. Definitions

This section defines terms used in this Title. The Committee intends for the purposes of Federal Crop Insurance Corporation appeals that the term "benefits" included in the definition of "appellant" and "participant" includes the insurance and reinsurance benefits provided to private insurance companies.