the u.s. government to fully support and not in any way subvert, undermine or weaken generally available encryption software. at apple with every release of software we advance safety and security features in our products. we work hard also to assist law enforcement because we share their goal of creating a better world. i manage a team of dedicated professionals on call 24 hours a day, 365 days a year. not a day goes by where someone on my team is not working with law enforcement. we know from our interaction with law enforcement officials the information we're providing is extremely useful helping to solve crimes. keep in mind people subject to law enforcement inquiries represent far less than one-tenth of 1% of our hundreds of millions of users. but all of those users, 100% of them, would be made more vulnerable if we were forced to build a back door.

as you've heard from our colleagues in livermore, they have the perception that encryption walls off information from them. but technologists and national security experts don't see the world that way. we see a data rich world that seems to be full of information, information that law enforcement can use to solve and prevent crimes. this difference in perspective, this is where we should be focused. to suggest american people is to choose between privacy and security is a false choice. the issue is not about privacy at the extent of security it's about safety and security. we feel strongly americans will be better off if we can offer protections for their digital lives. mr. chairman, that's where i was going to conclude my comments but i think i owe it to this committee to add one additional thought. and i want to be very clear on this. we have not provided source code to the chinese government. we did not have a key 19 months

ago that we threw away. we have not announced we're going to apply pass code encryption to the next generation icloud. i just want to be very clear on that because we heard three allegations. those allegations have no merit. thank you. >> thank you. we turn to the second panelist. >> chairman murphy, ranking member and members of the committee, thank you for the opportunity to testify. i applaud the committee's effort to better understand all aspects of this debate. my nature is amit yoran. i'd like to thank my mom for coming to hear my testimony today. in case things go sideways, i assure you she's much tougher than she looks. i've spent over 20 years in the cyber security field. in my current role i strive to

ensure we provide industry leading cyber security solutions. we have been a security leader more than 30 years. more than 30,000 global customers we serve represent every sector of our economy. fundamental to rsa's understanding at hand is a basis for cyber security technology. our cyber security products are found in government agencies, banks, utilities, retailers as well as hospitals and schools. at our core, we at rsa believe in power of technology to fundamentally transform business and society for the better. and the pervasiveness of our technology hopes to protect everyone. let me take a moment to say we deeply appreciate the work of law enforcement and national security community to protect our nation. i commend law enforcement who has dedicated their life to serving justice. partnered with law enforcement agencies to advance and protect our nation and the rule of law.

where lawful court orders mandate or moral alignment encourages it many tech companies have a regular, ongoing and cooperative relationship with law enforcement in the u.s. and abroad. simply put, it is in all of our best interest for the laws to be enforced. i have four points i'd like to present today, all of which i've extrapolated on in my written testimony. first, this is no place for extreme positions or rush decisions. the line connecting privacy and security is as delicate to national security as it is to our prosperity as a nation. i encourage you to continue to evaluate the issue and not rush to a solution. second, law enforcement has access to a lot of valuable information they need to do their job. i would encourage you to ensure that the fbi and law enforcement agencies have the resources and are prioritizing the tools and technical expertise required to keep up with the evolution of technology and meet their important mission.

third, strong encryption is foundational to good cyber security. if we lower the bar there, we expose ourselves further to those that would do us harm. as you know, recent terrorist attacks have reinvigorated calls for exceptional access mechanisms. this is a call to create back door to allow law enforcement access to all encrypted information. exceptional access increases complexity and introduces new vulnerabilities. it undermines integrity of internet infrastructure and introduces more risk, not less, to our national interest. creating a back door to encryption means creating opportunity for more people with nefarious intentions to harm us. sophisticated as ver sears and criminals would not knowingly use methods they know law enforcement could access, particularly when foreign encryption is readily available. therefore, any perceived gains to our security from exceptional access are greatly overestimated.

fourth, this is a basic principle of economics with very serious consequences. our standard of living depends on the goods and services we can produce. if we can require exceptional access from companies that would make us less secure, the market will go elsewhere. worse than that, it would weaken our power, utilities, infrastructure, manufacturing, health care, defense, and if anything systems. weakening encryption would significantly weaken our nation. simply put, exceptional access does more harm than good. this is the seemingly unanimous opinion of the entire tech industry, academia, national security industry as well as all industries that rely on encryption and secure products. in closing, i'd like to thank all the members of the community for their dedication understanding this complex issue. >> thank you. dr. blaze.

>> thank you, mr. chairman and members of the committee for the opportunity to testify before you today. the encryption issue, which you know i've been involved with for over two decades now has been characterized as a question of whether we can build systems that keep the good guys -- a lot of the good guys in but keep the bad guys out. much of the debate focused on questions of whether we can trust the government with keys for data. but before we can ask that question, and that's a legitimate political question that the political process is well equipped to answer, there's an underlying technical question of whether we can trust the technology to actually give us a system that does that.

and unfortunately, we simply don't know how to do that safely and securely at any scale and in general across the wide range of systems that exist today and that we depend on. it would be wonderful if we could. it would sve -- if we could build systems with that kind of assurance, it would solve so many of the problems in computer security and in general computer systems that have been with us since really the very beginning of software-based systems. but unfortunately many of the problems are deeply fundamental. the state of computer and network security today can really only be characterized as a national crisis. we hear about large scale data breaches, compromises of

personal information, financial information, and national security information literally on a daily basis today. and as systems become more interconnected and become more relied upon for the function of the fabric of our society and for our critical infrastructure, the frequency of these breaches and their consequences have been increasing. if a computer science had a good solution for making large scale robust software, we would be deploying it with enormous enthusiasm today. it is really at the core of fundamental problems we have. we are fighting a battle against complexity and scale that we are barely able to keep up with. i wish my field had simpler and

better solutions to offer, but it simply does not. we have only two good tools, tried and true tools, that work for building reliable robust systems. one of those is to build the systems to be as simple as possible, to have them include as few functions as possible, to decrease what we call the attack surface of these systems. unfortunately we want systems more complex and more integrated with other things and that becomes harder and harder to do. the second tool we have is photography, which allows us to trust fewer components of the system, rely on fewer component of the system, and manage the inevitable insecurity that we have. unfortunately proposals for exceptional access methods that have been advocated by law enforcement, and we heard

advocated for by members of the previous panel, work against really the only two tools that we have for building more robust systems. we need all the help we can get to secure our national infrastructure across the board. there's overwhelming consensus in the technical community that these requirements are incompatible with good security engineering practice. i can refer you to a paper i collaborated on called keys under door mats that i referenced in my written testimony that i think describes the consensus of the technical community pretty well here. it's unfortunate that this debate has been so focused on this narrow and very potentially dangerous solution of mandates for back doors and exceptional access because it leaves unexplored potentially viable

alternatives that may be quite fruitful for law enforcement going forward. one of -- there's no single magic bullet that will solve all of law enforcement problems here, or really anywhere in law enforcement, but a sustained and committed understanding of things like exploitation of data in the cloud, data available in the hands of third parties, targeted exploitation of devices such as miss hess described in her testimony will require significant resources but have the potential to address many of the problems law enforcement described. we owe it to them, and to all of us, to explore them as fully as we can. thank you very much. >> thank you vice chairman mckinley, chairman murphy and ranking member, thank you for having me.

i think this hearing comes at a very important time in the debate about how to best accommodate the very real needs of law enforcement in the digital age. i want to say i don't think there's any sense in which law enforcement is exaggerating or overstating the challenges they face and i don't think they should be surprised they have big challenges. we think about introduction of computers in our society, workplace and homes. to be colloquial, it throws everyone for a loop for a while. our institutions take a while to adjust. we shouldn't expect this problem to be solved overnight. i do think that's happening at this point in the debate, as some of the previous witnesses said, we are, i think, seeing a growing consensus that introducing mandatory infrastructure-wide back doors is not the right approach. i'm going to talk about some ways we can move forward. i'm going to why i think it is. it comes back to safe-deposit box analogy we heard. we all do think it's reasonable banks should have a second key to our safe-deposit boxes and maybe you should have drills to

drill through the locks in case you can't find one of the keys. the problem here is we're all using the same safe, every single one of us. so if we make those safe-deposit boxes too easy to drill into or someone gets ahold of the key, then everyone at risk, not just couple thousand customers who happen to be at one bank. that's why we see political leaders around the world rejecting the idea of mandatory back doors. recently secretary of defense ash carter said, i'm not a believer in back doors or single technical approach. i don't think it's realistic he said. robert hanigan, director of uk said in a talk he delivered at mit that mandatory back doors are not the solution. epps encryption should not be weakened, let alone banned. neither is it true nothing can be done without weakening encryption. he said i'm not in favor of weakening encryption or mandatory back doors.

vice president of european commission, who was the former prime minister of estonia and famous for digitizing almost the entire country and the government, said if people know there are back doors, how could people, for example, who vote online trust the results of the election if they know their government has a key to break into the system. two very quick steps that i think we should avoid going forward, and then a few suggestion about how to approach this challenge that you face. number one, i think you've heard us all say we have to avoid introducing new vulnerabilities into an already quite vulnerable information infrastructure. it would nice if we could choose only the bad guys got weaken encryption and the rest of us got strong encryption but i think we understand that's not possible. you've also heard reference to calea, a piece of legislation in

this commission, extending calea to apply to internet companies. if you look closely at calea, it shows just how hard it will be to solve the problem in one size all solution. calea, a few telecommunication companies that had the same product, regulated in then stable way by federal communications industry. internet, platform, mobile apps, device industry is incredibly diverse, global industry. there's no single regulatory agency that governs those services and products. that's very much by design, and so i think trying to impose a top down regulatory solution on this whole complex of industries in order to solve this problem simply won't work. what can we do going forward? number one, i think that in the effort of the encryption working group this committee and judiciary committee set up, i think it's very important to look closely at the specific

situations law enforcement faces, at the specific court orders they have been issued which have been successfully satisfied, which haven't, which introduce system wide vulnerabilities if followed through and which could be pursued without systemwide risk. i think there's a lot to be learned about best practices both of law enforcement and technology companies. there are probably some law enforcement agencies and technology companies that could up their game a little bit if they had a better sense of how to approach this issue. i also think it's awfully important that we make sure to preserve public trust in this environment, in this internet environment. i think we understand in the last five years that there's been significant concern from the public about the powers both of government and private sector organizations. i think it's a great step that the house judiciary committee moving forward and amendments electronic communications privacy act that will protect data in the cloud. i think we can do more of that

and ensure public data is protected both in the context of government surveillance and private sector use that will be able to move forward with this issue more constructively. thanks very much and i'm looking forward to the discussion. >> thank you very much for your testimony and for the whole panel, if i might recognize myself for the first five minutes with some questions. mr. sewell, you made quite a point that you have not provided the source codes to china. that was interesting. it had come up in the earlier panel on that. were you ever asked to provide by anyone? >> by the chinese government or anyone? >> yes. >> we have been asked by the chinese government, we refused. >> how recent were you asked? >> within the past two years. >> okay. >> mr. yoran, i've got a couple questions for you. first i was a little taken back, you said don't rush on this

solution, whatever that might be. as i said earlier, this has been 5 1/2 years i've been hearing everyone talk about it and they are not getting anything done. i think we're waiting. i don't know what we're waiting for. there's got to be a solution. i'm one of three licensed engineers in congress. by now we would have the solution if there were more engineers and less attorneys here, perhaps. i might, your question, i understand your company was founded by original creators of critical algorithm and public cryptography. needless to say encryption is your company's dna. if anyone understands the importance of protecting encryption keys, it's your company. yet apparently several years ago someone stole your seed keys. as i understand, these are the keys that generate keys, that are used for remote access, much like those used by members and their staff.

if a company like yours, as sophisticated as it is and all the security you have can lose control of encryption keys, how can we have confidence in others, especially smaller companies, the ability to do the same. >> mr. chairman, i think you bring up two great points. the first statement i would make is that i'd like to highlight the fact a tremendous amount of cooperation happens currently between law enforcement and the tech community. so the characterization we've made no progress over the last five years understates the level of effort put forth by the tech community to reapply to and support the efforts of law enforcement. i think what's occurring is -- and i won't call it a line in the sand, t i think the current requests of law enforcement have now gotten to the point where they are requesting a mandate that our product be less secure and will have a tremendous and profound negative impact on our society

and public safety as has already been made the point earlier. the second point regarding -- that highlights the very critical role encryption plays in the entire cyber security puzzle. the fact that sophisticated threat actors, nation, state or cyber criminals are going to target the supply chain and where strong encryption and strong cyber security capabilities come from. we're dealing with incredibly sophisticated adversary and one that would put forth a tremendous effort to find back doors if they were embedded in our security systems. it highlights the value of encryption to society in general. i think it also highlights importance of transparency around cyber breaches and cyber security issues. >> thank you.

in the first testimony, first panel, stay with you, mr. yoran, talked about security of our infrastructure. and i think the response was along the line that that's not -- it's not an encryption problem, it's a firewall problem. i'm not sure that the american public understands the difference between that. so i'm going to go back. how comfortable should we be, can we be, we have proper protection on security from firms like yours that our energy, our transportation system, particularly our grid, as i said, we've been -- we're subject to it. we know we've already been attacked once. so what more should we be doing? >> mr. chairman, i think the point made by the response provided by earlier panelist was

wrong. i think encryption plays an incredibly important role protecting critical infrastructure. it is not -- this is a firewall solution or encryption solution, most organizations that truly understand cyber security have a diverse set of products, applications, and many layers of defenses, knowing that adversaries are going to get in through fire walls. not only adversaries but important openings are created in fire walls so that the appropriate parties can communicate through them as well. those path are frequently leveraged by adversaries to do nefarious things. >> are you acknowledging we still are very vulnerable to someone with the electric grid? >> i believe we're vulnerable in any infrastructure that leverage technology. how much of it is the entire grid, how much is localized, i certainly believe utilities are

exposed. >> let me in closing to all four of you, if you've got suggestion how we might address this, i'm hearing time and time in the district with our grid system, i'd sure like to hear back from you what we might do. with that yield the next question from the ranking member from colorado. >> thank you so much. following up on the last question, i'd like to stipulate that i believe, as most members of the panel believe, strong encryption is critical to national security and everything else. as i said in my opening statement, i also recognize we need to try to give law enforcement the ability to apprehend criminals when criminals are utilizing this technology to be able to commit their crimes and cover up after the crimes. first of all, mr. sewell, i believe you testified that your company works with law enforcement now. is that correct?

>> that is correct. >> thanks. and i think you would also acknowledge that while encryption really does provide benefit both for consumers and for society for security and privacy, we also need to address this thorny issue about how we deal with criminals and terrorists who are using encrypted devices and technologies. is that correct? >> i think this is a very real problem. let me start by saying the conversation we're engaged in now has become something of a conflict, apple versus the fbi. >> right. >> just the wrong -- >> you don't agree with that, i would hope. >> absolutely not. >> mr. yoran you don't agree with that, that it's technology versus law enforcement, do you? yes or no will work. >> no, i don't agree. >> i'm assuming you dr. blaze. >> no. >> and you?

that's good. here is another question, then. i asked the last panel that. do you think it's a good idea for the fbi and other law enforcement agencies to have to go to third party hackers to get access to data for which they have court orders to get. >> i don't think that's a good idea. >> do you think so, mr. yoran? >> no, ma'am. >> dr. blaze? >> no. if i could just clarify the fact that the fbi had to go to a third party indicates that the fbi either had or devoted insufficient resources to finding a solution. >> right. i'm going to get to that in a second. so it's just really not a good model. so here is my question. mr. yoran, do you think the government should enhance its own capabilities to penetrate encrypted systems and pursue

work arounds when legally entitled to information that cannot obtain either from the users directly or service providers. do you think they should develop that? >> yes, ma'am. >> do you think they have the ability to develop that? >> yes, ma'am. >> professor, do you think they have the ability to develop that? >> it requires enormous resource. they probably with the resource they currently have, i think it's likely they don't have the ability? >> what congress has, we may not be internet experts but we have resources. >> i think this is a soluble problem. >> mr. weitzner? >> i think they certainly should have the resources. i think really the key question is whether they have the personnel and i think it will take some time to build up a set of -- >> i understand it will take time but do you think they can develop resources. >> thank you. okay. so mr. yoran i want to ask you another question.

do you think that all of us supporting the development of increased capability within the government can be reasonable path forward as opposed to relying on technologies or companies with new systems. do you think that's a better source? >> yes, ma'am. >> i guess mr. sewell you agree with that, too. >> more time, money, resources on the fbi training -- >> would apple be willing to help them with those capabilities? >> we actively do help them. >> so your answer would be yes. >> participate in training. >> helping them develop those new capabilities. >> what we can do is help them understand our ecosystem. that's what we do on a daily basis. >> i'm not trying to trick you. >> i'm responding. your answer would be yes, you're willing to help us with law

enforcement and congress to solve this problem. is that correct, mr. sewell? >> i want to solve the problem like everyone else. >> are you willing to work with law enforcement and congress to do it, yes or no? >> congresswoman, we work with them every day. of course we are. >> yes or no will work. thank you. >> mr. yoran? >> yes. >> mr. blaze? >> yes. >> thank you so much. mr. chairman. >> thank you. now recognize mr. griffith from virginia. >> i appreciate that. just a small college history major who then went into law. as a part of that, mr. sewell, i would have to ask, would you agree with me that it took in the history of mankind took us thousands of years to come up with civil liberties and perhaps 5 1/2 years isn't such a long time to try to find a solution to this current issue?

and likewise, it was -- the answer was in the affirmative for those who may not have heard that. >> yes. >> and it was lawyers who actually created the concept of individual liberty and one that our country has been proud to be the leader in the world in promoting. would that also be true. >> that's very true, yes. >> that being said, i was pleased to hear answers to miss dagett to solve this. there is no easy answer. i like the safe-deposit box analogy. thanks for ruining that for me, in your analysis. i would ask mr. sewell if there isn't some way -- and again, i can't do what you all do. so i have to simplify it to my terms. is there some way we can create the vault that the banks have with the safety deposit box in it. once you're inside of there, if you want that security, because not everybody has a safety deposit box, but if you want

that security, then there's a system of dual but separate keys with companies like yours or others holding one of the two keys and the individual holding the other key and having the ability to, with a proper search warrant, have law enforcement be able to get in? i'm trying to break it down into a concept i can understand, where i can then apply what we have determined over the course of the last several hundred years is the appropriate way to get information. it's difficult in this electronic age. >> it is very difficult, congressman, i agree. we haven't figured out a way that we can create an access point and then create a set of locks that are reliable to protect access through that access point. that's what we struggle with. we can create an access point and we can create locks, but the problem is the keys to that lock

will ultimately be available somewhere. if they are available anywhere, they can be accessed by both good guys and bad guys. >> you would agree with mr. weitzner's position or his analysis, which i thought was accurate, the problem we're not giving a key and a drill to one safety deposit box, it's everybody in the bank who suddenly would have their information open. i saw that you wanted to make a comment, mr. weitzner. >> i just want to -- since this analogy seems to be working, you know, we don't put much stuff in our safe-deposit boxes, right? i don't have one, to be honest. i think that there's this core concern back to your civil liberties framework somehow we have a warrant-free zone that's going to take over the world. i think that if you follow the safety deposit box analogy, what we know is that the information that's important to law enforcement exists in many places.

i don't question that there will be some times when law enforcement can't get some piece of information it wants. i think what you're hearing from a number of us and from the technical community is that this information is very widely distributed. much of it is accessible in one way or the other or inferable from information by third parties. the path to try to understand how to exploit that to the best extent possible in investigations so that we're not all focused on the hardest part of the problem. the hardest part is what do you do if you have very strongly encrypted data, can you ever get it. it may not be the best place to look all the time because it may not always be available. >> historically you're never able to get ahold of everything. dr. blaze, you wanted to weigh in. >> i want to caution the split key design, as attractive as it sounds was also at the core of

the nsa designed clipper chip, which was where we started over two decades ago. >> i appreciate that. mr. yoran, i've got to tell you, i did think your testimony and written testimony in particular was enlightening in regard to the fact if we do shut down the u.s. companies, then there may even be safe havens created by those countries not our friends and specifically our enemies. unfortunately i wanted to ask a series of questions on that and i see my time is expired and i'm required to yield back, mr. chairman. >> welcome looking at other panel members, we have miss brook from indiana. your five minutes. >> thank you, mr. chairman. i'd like to start out with a comment that was made in the first panel. i guess this is to mr. sewell, whether or not you can share with us.

does apple plan to use encryption in the cloud? >> we have made no such announcement. i'm not sure where that statement came from, but we made so such announcement. >> i understand you made no such announcement, but is that being explored? >> i think it would be irresponsible for me to tell you we're not even looking at that, but we have made no announcement, no decision has been made. >> and are these discussions helping inform apple's decisions? and is apple communicating with any law enforcement about that possibility? >> these discussions are enormously helpful. i would be glad to go further into that. i have learned some things today i didn't know before. so they're extremely important. we have considering, talking to people, we are being very mindful of the environment in which we're operating. >> and i have certainly seen and i know that apple and many companies have a whole set of policies and procedures on compliance with legal processes and so forth. and so i assume that you have

regular conversations with policymakers of law enforcement, whether it's fbi or other agencies on these policy issues. is that correct? >> that's very correct. i interact with law enforcement at two very different levels. one is a very operational level. my team supports daily activities in response to lawful process. we work very closely on actual investigations. i can mention at least two where we have recently found children who have been abducted. we have been able to save lives working directly with our colleagues in law enforcement. at that level, we have a very good relationship. i think that gets lost in the debate sometimes. at the other side, i work at perhaps a different level. i work directly with my counterpart at the fbi. i work directly with the most senior people in the department of justice. and i work with senior people in local law enforcement on exactly these policy issues. >> i thank you and all the others for cooperating with law enforcement and working on these issues. but it seems as if most

recently, there have not been enough of -- enough of the discussions, hence that's why we're having these hearings and why we need to continue to have these hearings. but i think that we have to continue to have the dialogue on the policy while continuing to work on the actual cases and recognize that obviously technology companies have been tremendously helpful, and we need them to be tremendously helpful in solving crimes and preventing future crimes. it's not just about solving crimes already perpetrated, but it's also, particularly with respect to terrorism, how do we insure we're keeping the country safe. i'm curious with respect to a couple questions with respect to legal hacking. and what -- and the types of costs that are associated with legal hacking, as well as the personnel needed. and since the newer designs of iphones prevent the bypassing of the built-in encryption, does apple actually believe that

lawful hacking is an appropriate method for investigators to use to assess the evidence in investigations? >> so, i don't think we have a firm position on that. i think there are questions that would have to be answered with respect to what the outcome of that lawful hacking is, what happens to the product of that lawful hacking. so i don't have a formal corporate position on that. >> but, so then because that has been promoted, so to speak, as far as a way around this difficult issue, are you having those policy discussions about apple's view and the technology sector's view on lawful hacking? are those discussions happening with law enforcement? >> i think this is a very nascent area for us. but particularly, the question is what happens to the result? does it get disclosed, does it not get disclosed? that is an issue that has not been well explored. >> do you have an opinion on lawful hacking? >> not an opinion on lawful

hacking in specific, but i would just point out that doing encryption properly is very, very hard. trying to keep information secret in the incredibly interconnected world we live in, is very, very hard. and i would suggest that it's getting harder, not easier. so the information, the data that law enforcement has access to is certainly much more than the metadata that they have had over the past several years. but now as applications go to the cloud, the cloud application providers need to access the data. so the sensitive information is not just on your iphone or other device. it's sitting in the cloud, and law enforcement has access there because it cannot be encrypted. it needs to be accessed by the cloud provider in order to do the sophisticated processing and provide the insight to the consumer that they're looking for. >> my time has expired. i have to yield back. >> thank you. and no other members of the subcommittee that are with us, we can then -- >> mr. chairman.

>> i'm sorry. >> okay. you're on the subcommittee? >> no. >> we're going, none of the subcommittee so now we're going to members who have been given privileges to speak. i was advised to go to the other side. your five minutes. >> thank you, mr. chairman. first of all, to mr. yoran, i love your suit and tie. it brings a little of the flavor of my district into this big old hearing room. and warm welcome to your mother. i don't know where she is, but it's great to have your mother here. great, wonderful. i know that associate professor blaze talked about the crisis of the vulnerability in our country relative to, you know, how our

systems, how vulnerable our systems are. i would just like to add for the record that up to 90% of the breaches in our system in our country are due to two major factors. one is systems that are less than hygiene. unhygienic systems. number two, very poor security management. so i think the congress should come up with at least a floor relative to standards. and so that we can move that word crisis away from this. but we really can do something about that. i know it costs money to keep systems up. and there are some that don't invest in it. but that can be addressed. the word conversation has been used, and i think very appropriately. and this is a very healthy

hearing. unfortunately, the first thing the american people heard was a very powerful federal agency on the -- you know, within moments of the tragedy in san bernardino, demand of a private company that they must do this, otherwise we will be forever pitted against one another, and there is no other resolution except what i call a swinging door that people can go in and out of. when i say people, in this case, it's the government. the american people have a healthy suspicion of big brother. but they also have a healthy suspicion of big corporations. they just do. it's in our dna. i don't think that's an unhealthy thing. but that first snapshot, i think, we need to move to the

next set of pictures on this. and i'm heartened that the panel seems to be unanimous that this weakening of our overall system by having a back door, by having a swinging door, is not the way to go. so in going past that, i would like to ask mr. sewell the following. whether introducing the third-party access, and that's been talked about, i think that would fundamentally weaken our security. how does third-party access impact security? how likely do you think it is that law enforcement could design a system to address encrypted data that would not carry with it the unanticipated weaknesses of its own? i'm worried about law enforcement in this.

i want to put this on the record as well. i think that it says something that the fbi didn't know what it was doing when it got ahold of that phone. and that's not good for us. it's not going to attract smart young people to come into a federal agency because what it says to them is they don't know -- it doesn't seem to us they know what they're doing. can you address this third-party access and what kind of effect it would have on overall security? >> thank you very much for the question. if you allow third-party access, you have to give the third party a portal in which to exercise that access. this is fundamentally the definition of a back door, or a swinger door, as you have, i think, very aptly described it. there is no way that we know of to create that vulnerability, to create that access point. and more particularly, to maintain it.

this was the issue in san bernardino, was not just give us an access point, but maintain that access point in perpetuity so we can get in over and over and over again. that, for us, we have no way of doing that without undermining and endangering the entire encryption infrastructure. we believe that strong ubiquitous encryption is the best way we can maintain the safety, security, and privacy of all of our users. that would be fundamentally a problem. >> thank you very much. thank you, mr. chairman, and again, thank you to the witnesses. you have been, i think, most helpful. >> i apologize. i ran out for a while, but i get to ask a few questions here. mr. sewell, we can all understand the benefits of strong encryption, whether it's keeping someone's own bank statement, financial records encrypted, so we don't have to worry about hackers there. we also offered compelling

testimony about law enforcement, criminal activity, child predators, homicide, et cetera. based on your experience, what we heard today, can you acknowledge that this default encryption does provide a challenge for law enforcement? >> i think it absolutely does. and i would not suggest for a moment that law enforcement is overstating this same claim that has been made by other panelists. i think the problem is that there's a fundamental disconnect between the way we see the world and the way law enforcement sees the world. and that's where i think we ought to be focusing. >> what is that disconnect? >> the disconnect has to do with the evolution of technology in society. and the impact of that technology in society. what you have heard from our colleagues in law enforcement is that the context in which encryption occurs reduces the scope of useful data that they have access to. this going dark problem. if you talk to technologists, we see the world in a very different way.

we see the impact of technology is actually a burgeoning of information. we see there's an abundance of information, and this will only increase exponentially as we move into a world where the internet of things becomes part of our reality. so you hear on one side, we're going dark. you hear on the other side, there's an abundance of information. that circle needs to be squared. the only way i think we can do that is by cooperating and talking and engaging in the kind of activity that the madam was suggesting. >> i appreciate that. that's a very compelling argument you gave, but i have no idea what you just said. let me put this into terms we can all talk about. your time from the first panel, child predators were able to hide behind this invisible cloak. a murder scene in where they could have perhaps caught who did this. we know when it comes to crimes, there are those who won't commit crimes because they have a good moral compass. we have those who will commit

them anyway because they have none. we have those who can be deterred because they think they might get caught. and we have terrorist acts where you can get into a cell phone from someone who has committed a terrorist act, you can find out if they're planning more and save other lives. so what do you tell a family member who has had their child abused and assaulted in unspeakable forms? what do you tell them about burgeoning technology? i mean, tell me what comfort we can give someone about the future? >> i think in situations like that, of course, they're tragic. i'm not sure there's anything any one of us could say to ease that pain. on the other hand, we deal with this every day. we deal with cases where children have been abducted. we work directly with law enforcement to try to solve those crimes. we had a 14-year-old girl from pennsylvania who was abducted from her captor. we worked immediately with the fbi to identify the location

where she had been stashed. we were able to get feet on the ground in a matter of hours, find that woman, rescue her, and apprehend -- >> that's good. i appreciate that. but what about -- i look at this case, it was presented, when someone may have a lot of information hidden, and if they could get in there, whether it is child predators or it is a terrorist where we could prevent more harm. >> and we're missing the point of technology here. the problems that we're trying to solve don't have an easy fix. >> i know that. i need to know you're working in a direction that helps. >> absolutely. >> that's what i'm trying to help -- >> hashing images so when the images move across the internet, we can identify them. we can track them. the work that we do with operation railroad is exactly that. it's an example of taking technology, taking feet on the ground, law enforcement

techniques, and marrying them together in a way that fundamentally changes. >> for people using encrypted sources, whether it's by default or intention to hide their data and their intention and their harmful activity that they're planning on hurting more, what their intention and harmful activity they are plan on hurting more, what do we tell the public about that? >> fundamentally, we are working on the problem and we believe strong encryption -- >> does that mean apple is going to be working with the fbi on this? k know the response of apple was, we have to have the commission. you are looking at the commission. we want to find solutions. we want to work with you. i'm pleased you are here today. we don't think there's right and wrong absolutes. there's not black and white. we need to know about your commitment, too, in working with law enforcement. >> can i tell you a story, congressman? >> sure. >> can i do that?

i sat opposite my counter part at the fbi. we don't talk frequely, but regularly. i sat opposite of him and i said amist all this clamor, why don't we set aside a day. we'll send some smart people to washington or you send smart people to cupertino and what we'll do is talk to you about what the world looks like from our perspective. what is this explosion of data we can see? why do we think it's so important? and you talk to us about the world that confronts your investigators from the moment they wake up in the morning. how do they think about technology? how do they think about the problems they are trying to solve? we are going to sit down together for a day. we were planning that at the time the san bernardino case was filed. that got put on hold. that offer still exists. that's the way we are going to solve the problem. >> mr. chairman? >> yes. >> could you yield for a second?

if we could facilitate that meeting, i'm sure the chairman and i would be happy to do that. we have lovely conference rooms painted this same color and we'll have you there. >> madam, if we could get out of the lawsuit world, let's cooperate. >> that would be great. thank you. >> we want that to be facilitated. we have too many lives at stake and the concerns of families in america. this is central. this is core. i know i'm out of time. you are going to be recognized now for five minutes. >> thank you, i appreciate it so very much. i want to thank everyone here on the panel for the technology and leadership that helps keep us safe. that's where our top priority is here in the united states congress, at least it's mine and i know many others on this panel. we are here to find a balance between security and privacy and not continue to pit them against each other. i think you will agree with that.

how quickly does one life cycle of encryption last as a secure system until vulnerabilities are found and exploited? will this continue to be a game of cat and mouse or software and processes are strong enough to make end-to-end encryption a stable system? >> systems are attacked and exploited almost instantaneously once computer systems, mobile devices are put on the internet. once crypto methods are publi publish publishes, there's a research community that goes to work depending on the strength of the encrypti encryption. vulnerability is discovered quickly or decades down the road and all the information is at risk while the system was in use. frequently, the exposure and the exploitation of crypto systems isn't based on the strength of

the algorithms themselves but how they are implemented and how the systems are inner connected. i might not have the key to get information off a particular device. because i can break into the operating system, because i have physical access to it and i can read the chips, i can get information or get the key. it's a very complex system. it all has to work perfectly in order for the information to be protected. >> thank you. the next question is for the entire panel. we have known for the past few years any significant threat to homeland includes a cyber attack. would you agree on that? can you elaborate on the role that encryption plays in this process of continued national security? certainly the military used forms of encryption for decades. can you give us a contemporary snapshot of how encryption used by government or nongovernment users protect us against cyber

attacks today? we can start here please. >> i will answer the question, but i'm not at all the expert in this space. the other panelists are more expert than i am. the notion of encryption prot t protecting infrastructure. the one thing i will say that i tried to emphasize is we shouldn't forget about the changes happening in terms of the way it can be accessed. we sometimes lose sight of the fact phones are being used as authentication devices if you can break the encryption and get into the phone, that may be a very easy way to get into the power grid, to get to the transport systems and water system. it's not a question of the firewalls or the access, it's what is the instrumentality you use to get into it. >> thank you. >> i believe fundamentally security is on the same side as privacy and economic interests.

it's fundamental. it's fundamental in the national security community but also mandated by law to protect data in other infrastructures and systems such as financial services, health care records and so on and so forth such that even folks that might not gain an advantage by having strong encryption available like admiral rogers, director of the nsa and james clapper, the director of national intelligence believe it's not in the u.s.'s best interest. >> anyone else wish to comment? >> encryption is used in protecting political infrastructure like other as spekts of our society. it protects sensitive data when it's transmitted and stored, including on mobile devices and over the internet and so on. i just want to add that critical

infrastructure systems are largely based and built upon the same components we are using in consumer and business devices as well. there aren't, you know, critical infrastructure systems that depend on mobile phones and operating systems that you and i are using in our day-to-day life. so, when we weaken them, we also weaken the critical infrastructure systems. >> could i add briefly that i actually thought his answer was pretty good. but, what's critical about those systems that we rely on to protect our infrastructure is when we find flaws in them, we have to patch them quickly and fix them quickly. as he said, the systems are constantly being looked at. i'm concerned if we impose requirements on our security infrastructure on our encryption tools, we impose requirements. the process of identifying flaws, fixing them and putting

out new versions rapidly is going to slow down to figure out whether those comply with whatever the surveillance requirements are. i think that's the wrong direction to go in. we want to make these tools as adaptive as posz zable and be fixed as quickly as possible, not caught in a set of rules of what they have to do and not do to accommodate surveilness needs. >> thank you very much. thank you for allowing me to participate. i yield back. >> thank you. i asked unanimous consent that the letter from cta be admitted. >> i'd ask unanimous consent. there's a letter from tech net dated april 19th that we would like to have put in the record. >> thank you. i ask that the contents of the document binder be introduced and redemptions. with any they are stamped

appropriate. in conclusion, i want to thank the witnesses and members that participated. they have ten business days to submit questions. i ask you respond promptly to the questions. thank you so much. we look forward to hearing from you. we'll get you together. >> thank you, mr. chairman.

>> we proudly give 72 -- the next president of the united states.

coming up on c-span 3, the supreme court oral argument in harris versus arizona independent redistricting commission, a case about voting districts. then the highway safety administration on new road laws followed by a hearing on new technology to improve water supplies. later, securities and exchange commission. the supreme court ruled unanimously that arizona's legislative districts created by an independent commission are valid and comply with the voting rights act and the constitution's one person, one vote principle. next, the hour long december 2015 oral argument in the case. it's an hour. >> argument first this morning, in case 14-232, harris versus

the arizona independent redistricting commission. >> thank you, may it please the court, the one person, one vote principle of the equal protection clause requires an apportionment authority to make a good faith effort to equally apportion the population as practically as possible. while deviations are tolerated, they are only minor deviations of a rational state policy intended not to be discriminatory or arbitrary. here, the arizona redistricting commission mall apportions arizona state legislature by almost 10%, 8.8% and the district court below found it did so for two reasons. the first reason was to obtain a partisan advantage for the democrat party. the second reason was a

periseved belief that mall apportions districts were necessary to obtain approval. neither of these reasons justifies a devuation of the constitutional principal of one person, one vote. >> do you want us to overturn the factual finding that that compliance was the real reason? do you want us to overturn that as a factual finding? >> no, i don't as a factual finding. when you say the preclearance obtaining voting rights at compliance, we have said, as we've noted in the briefing, it was not necessary to underpop late districts to obtain compliance with the voting rights act. >> may i ask you a question? it's odd that you're making this charge that there was an

impermissible effort to increase a democratic authority power in the legislature. but the end result was that the arizona plan gave republicans more than their proportionate share of seats in the state legislature. and i think the numbers are, in total, republicans won 56.6% of the state senate seats. 60% of the state house seats. and that exceeded the republican party statewide registration share of 54.4%. it was an attempt to stack this in favor of the democrats, it certainly failed. >> we would say, your honor, an incompetent gerrymander is no

less a gerry mander that obtained the department objective. i think the objective that we are trying to achieve here is the one person, one vote stamp. and that's why whatever the ultimate political outcome, i don't think that vindicates the fact that these are unequally proportionate. >> it's still not clear to me what you want us to say about the commission's rationale. that it was wrong as a matter of law? if you don't overturn the factual finding that they had a good faith belief of what they're doing is correct, then you have a problem, it seems to me. or do you have a problem? >> i don't think i do. what the district court found, was their adviser told them, you can depop late districts up to 10%. and, in fact, you should do that because you need to create the underpopulated minority districts to obtain preclearance. that is wrong. the voting rights act does not command or require under-populated districts to obtain pre-clearance. the solicitor general noted that

as well as in their briefing in the justice department guidelines. >> how confident are you of that? the preclearance process at the department of justice is famously opaque and the states and municipalities have to go through or had to go through several layers of back and forth, years of proposal, it's sort of a bargaining process. i don't know how confident you can be that it wasn't necessary. >> we certainly said it was very opaque, as you said, mr. chief justice. it's like reading chicken in trails. no one really knows what you need to do or don't need to do to obtain pre-clearance. fundamentally, the voting rights act, prior to shelby county could not compel an authority to underpop late districts. so the advice given, pop late the districts was flawed as a

matter of legal advice. it doesn't justify malapportionment. so they could achieve, in the first map, they had two maps, a draft map and a final map. the draft map had a 4%, roughly devuation. their own expert said this map satisfies the voting right act. then they populated further the 8.8 devuation. >> they were mistaken. they could have done it without this disproportioning, but they thought that that was okay. they thought they were doing this in order to comply with the justice department. what's the test? is the test what they intended? or is it an objective test? >> i think you have to look at both. look at the objective test, does the voting rights act require you to depop late districts? >> let's assume the answer to

that is no. >> right. >> but the people who made this were mistaken. they thought it allowed and indeed may require dwrou do that. so, that doesn't show a bad motive on their part, does it? >> no, but i don't think this court held a bad legal advice. >> that's different from impermissible motive. >> we have -- >> what is the tester? >> i would say this case of the district court had all three judges split on what the burden of proof was is a mixed motive case. you have a partisan advantage and another motive, which is, oh, it's okay because we needed to do this because our adviser said it was necessary for preclearance. then i think the task falls to the commission to justify under this court's decisions and mount healthy and arlington heights

standard of a mixed motive case to justify, oh, this was necessary, in fact, to come ply with that. >> more than mixed motive. it was a finding of dominance. a dominant purpose of this was to attempt to meet section 5. >> two of the judges did find that that was a predominant motive. >> that's a fact finding. you have a burden, you're seeking to overturn it. >> but they also found that there was another illegitimate motive that they assumed. judge silver didn't necessarily agree, but she assumed for purposes of decision this partisan advantage was illegitima illegitimate. you have a case where the body is departing from a person and vote, come forward with two explanations, one illegitimate, one legitimate, based on legal advice.

on the basis of that, the court split on what the burden of proof was. >> just to pin this down a little bit, mr. hearne. you are not contesting the factual finding that the predominant motive was to comply with the voting rights act, is that right? >> we take the factual finds. for the district court. we don't protest those. but what we do believe is that the court applied the wrong burden shifting standard in their analysis of those facts. when they have a mixed motive, the proper response would have been to say, okay, you've shown, we found illegitimate motive. >> you keep on saying mixed motive and people come on back to you trying to figure out whether you are in fact or are not in fact, contesting that the predominant motive was the voting rights act. >> when we say the voting rights act, i want to make it clear --

>> and the court found, and it is a factual finding, that that's the predominant motive. i don't want to harangue you on this. i just want you to understand what the argument is. >> to be very clear, yes, we accept the factual finding that that was what they said was a primary motive. but they errored when they did not shift the burden in a mixed motive case. i think footnote 21 with a healthy kind of standard. secondly, they errored when they gave a justification when there was not a legal need to do what they did. the voting rights can't compel vote delusion. that justification, even in good faith, does not excuse a constitutional violation of one person, one vote. so at minimum, it would need to be remanded for the commission to explain why they can justify these population deviations. and that is our position, justice kagan.

>> i'm even further confused. i understand that you gave up any racial or political gerimand case. this is just a voter delusion case. >> that's absolutely correct, justice sotomayor. >> there's a case that was affirmed. is there any other case from this court that ever said that a deviation of this amount is significant? i think we've always called it anything below 9%, day min mus, correct? >> what the court has said, i read the jurisprudence is that a deviation of over 10% is pry ma fascia. if it's a deviation of less than 10%, the obligation is on the party challenging it to come

forward and present some evidence showing that it is done for an arbitrary or discriminatory purpose. that's what we understand that stands standard to be out of brown v. thompson. again, that was a plurality of opinion. >> i don't actually understand. i don't know of any case where we've required an explanation under 10%. >> two responses to that. there was a summery of fir mans. -- and the -- deviations from the constitutional standards are tolerated. so, for example, that decision said we specifically don't want to set some line because the minute we do that, legislature or redistricting authorities

will immediately use that as the new standard. >> well, in fact, they have. they've pretty much used 10%. we have not discouraged them from doing that. >> it has appeared in some of the district court decisions that they have looked at that. >> what it says, actually, in brown v. thompson, is that our decisions have established that as a general matter with a maximum population deviation, under 10% falls within this category of minor deviations. what we held previously was that minor deviations, for mathematic equality under state legislatures are insufficient to make out a pry ma facia case of discrimination. so that's the holding of the court. and this seems to be within the category of minor deviations where you have to do something

more then you would have to do if it was larger than 10%. now, what do you think you have to do? >> i think we have to do what we did, which is to come to the court, come to a district court and present to them evidence that we have a daeviation that was done through minor for an illegitimate purpose. and there was another issue that required additional scrutiny. we satisfied that burden. >> don't you think this will lead every single plan to be challenged as voter delusion? >> no, i think you would have to have a showing of an illegitimate purpose behind the deviation. >> you didn't just establish it by the fact of the deviation.

what kind of evidence did you present to the district court? >> well, i think in this case, this case is a very unique case because as judge wake found in his decent, the chart shows statistically there was systematic partisan mall apportionment done for that partisan reason. just looking at numbers. >> is that the chart at 112-a of the appendix? >> yes. i think that it is the chart that is in color. i think we've also provided. >> i've got the colored chart. >> yes. it shows the districts were systematically, statistically mall apportioned for that purpose. that shis the kind of showing justice scalia -- >> i thought, mr. herron, that you were saying that the thing that you 45d presented had to do with an impermissible motive? and the impermissible motive was that they didn't have to do all of this for voting rights act

compliance. is that right? >> there's two -- the first impermissible motive or illegitimate justification is partsonship, to gain an advantage. but you said you weren't challenging the finlding, that was a subsidiary part of the redistricting. you want to undermine the voting rights compliance rationale. but then i'm stuck on the same question. what evidence did you present that there was an impermissible motive with respect that, as opposed to different views, as to what the voting rights act compelled. >> two quick answers to that, justice kagan. first is, legally the voting rights act couldn't compel them to do what they did. so that justification is legally invalid.

secondly, the burdenship where we've shown and illegitimate partisanship than the task cals the commission to justify that. and i would reserve the balance of my time. >> thank you, council. mr. brnovich. >> thank you, mr. chief justice. may it please the court, fortunately or unfortunately in this case, there are many fact that is are not in dispute. addressing justice kennedy's questions, the state does not dispute that the independent redistricting commission did draw districts on equal population. all sides say they were not random or incidental. we also know, and the record shows and no one disagrees, this pattern to underpop late minority districts was done to help create further eighty to elect districts. and we also know they did it intentionally. so why are they here today?

in the background, this court has always held that equal protection is not a criteria under the factor when it comes to redistricting. but it is, essentially the background which all redistricting takes place. the statement of arizona, the secretary, do not dispute the compliance with voting rights act was a legitimate or illegitimate state interest. and we don't dispute that maybe there was a good motive on the part of drying these districts. the problem is, those motives don't matter when what you have is an undermining principle of one person, one vote. so in this case, what we have is a violation of equal protection cause. by intentionally underpop ewe minority districts the irc violated the clause of one person, one vote. so, essentially, what happened was by overpopulating the other districts, the voters of the other votes diluted. and by diluting those votes, it violated the constitution.

>> it sounds fundamental that a statute cant authorize a constitutional violation. so that even an attempt to comply with the voting re ining rights act is not compliant. have we ever said that in the context of the voting rights? >> your honor, this court has always held that the concept and the principle of one person, one vote. any attempts to undermine that outside -- >> so we have said that even minor deviations are not permitted if they are statutorily required? >> no statute can trump the constitution. the votes rights act, whichever way it's read, can't be read in a way to violate the one person, one vote clause. that is the state's position. we don't dispute or we're not

saying to comply with the voting rights act may, indeed, be a legitimate state interest. what we're saying is when it's done in a systematic way, where you have a one way ratchet where you have consistent minority ability to elect districts, using folks based on racial ethnic classifications and overpopulating other districts and what you have done is undervalued or violated the one person -- >> would you say it's correct that compliance with the voting rights act, a desire to obtain preclearance is, at least, like other traditional districting considerations like respecting county lines, respecting municipal lines, having con tig would you say districts. do you agree with that? >> yes. >> so if that is the case, is that what you're asking us to say with respect to the voting rights act? the things that were really

necessary to obtain preclearance are legitimate. but they went further. they went beyond what was necessary. we would have have to determine whether it's true or not. some court has to determine whether it's true or not. >> in this instance, because of the systematic way the deviations occurred, we have all of that evidence. however, we do believe that the voting rights act is like any other criteria. so if you get these population deviations and they're incidental, not intentional, and that is the key, i believe, is when you intentionally under-populate and systematically under-populate these districts. >> what if the only way that a state could obtain free clearance when section five was

still in force was to underpop late some districts, would that be permissible? the only way you could respect municipal lines or county lines was to underpop late some districts to some degree. >> justice, the irony is in the draft maps. seven of the ten to elect were underpopulated. however, when they went from the draft maps to the final maps, there was a one-way ratchet. they intentionally and systematically underpopulated those districts. >> but what he's asking you whether or not a deviation is permissible for protecting communities of interest. whether some slight deviation is permissible. >> yes, justice kennedy. if it's incidental and not intentional. >> i'm not sure what that means. >> i had thought -- i thought you were saying that it doesn't matter whether you were doing it

to obtain justice department clearance. you cannot do something that is unconstitutional. if, in fact, you don't have equally apportioned districts, it goes beyond what is tolerable. it's a violation. regardless of whether you're actually trying to comply with the justice department. isn't that what you were saying? >> yes, justice scalia, but i think it's important to know that we look at this as a qualitative, not quantitative analysis. there isn't some magical number. the state's position is that compliance is like other neutral criteria, protecting communities of interest, geographical boundaries. so, in considering that, you may have incidents where you get some districts above or below the line. the fact that a district may be below the line, in and of itself, is not a constitutional violation.

the harm occurs when the independent redistricting commission systematically underpopulates those districts and overpopulates other districts. there by diluting the votes of the people. >> i guess i'm just not really sure. let's say that there's a policy that says we want to respect county lines. we know we want to do one person, one vote, but we have basically some leeway up to 10%. and there's a policy. we want to respected county lines, even though that's going to cause a little bit more deviation on the one person, one vote metric. are you saying that's impermissible? >> justice kagan -- >> it's a policy. it's an intentional policy. >> i guess the road to hell is paved with good intentions. our position is regardless of their intention, if they are doing it in a systematic way, intending to overpopulate

certain districts, underpop late certain districts, that is unconstitution unconstitutional. the voting rights act. >> -- everyone though it takes you from 4 to 5% or 7 to 8%. you're not crossing the 10% threshold. but as long as you're going up and you're doing it purposefully in the sense of we have a policy to maintain county lines, that's impermissible. >> yes, justice kagan. the position of the state is when it's done in a systematic and intentional manner, when you create burrows of certain folks and overpop late other districts that violates the court's win person, one vote principle. >> as a matter of curiosity, how do you end up on this side of the case. you were a defendant in the district court, weren't you? >> the secretary of the state thought the principle of one person, one vote and upholding that principle was very, very important. that's why we felt compelled to

be involved in this case. >> only on appeal. you didn't argue this side in the district court, did you? >> that is correct. >> what happened? was there an election in between or something? >> yes. i won overwhelmingly. >> i knew it! >> thanks. thank you very much. i will be up for re-election in three more years. anyway -- >> did you agree with your colleague, it doesn't make a difference that in the end result, the legislature, the republicans were disproportionately advantaged and disproportionate share of the seats? >> yes, justice. our position is that that really is irrelevant as far as the numbers and ultimately whether the percentage -- >> they would have ended up in greater disproportion of republican representatives. >> ultimately, the number --

this is not a line drawing case. this is overpopulation and underpopulation case. how the lines are drawn and the republican and democratic representative is not important or not key to our argument. our key to the state's argument is this intentional and systematic one-way ratcheting of underpopulating the ability to elect districts. what makes the actions of the irc unconstitutional. >> thank you, counsel. >> thank you. >> mr. smith. >> mr. chief justice, may it please the court, there's no basis that the modern population along the arizona map violate the protection clause. >> you accept the fact --

accepting fact finding that at least part of the motive was partisan? >> i don't think that's a fair characterization of what the district court found. >> why? >> they found the motive for the population -- >> dominant motive. >> it said there may have been two of the five commissioners who as to one district had mixed motivesnd did not find the commission as a whole acted even in that one instance. that district is not one of the ones that is significantly underpopulated. moving the population around to make it more competitive, even if it was motivated by partisanship has nothing to do with the 8.8 deviation. >> i would be very upset if there was any motivation. i wish this case came up before the case we had last term, which

approved your commission despite the text of the constitution because this commission was going to end partisanship, get politics out of redistricting. here, the very next term, we have this case, which asserts there has been a lot of partisanship on this devine commission. >> not a fair characterization of what happened. what it found after giving them a full opportunity to try to prove their claim is that simply not what happened. instead, what happened is that they had these population deviations emerged in the final part of the process as they work to make sure that their map would pass preclearance on the first try, something the state of arizona failed to achieve. >> the district court found, this is on 79a of the appendix to the jurisdiction statement,

partisanship played some role. you want us to interpret that if there was no partisanship, everything would have come out exactly the same way, no effect whatsoever? >> the court said it was largely republican leaning district, two of the commissioners may have had mixed motives thinking of aiding the preclearance argument and thinking of bringing the democratic party up closer to parody. still didn't get the parody. i think to say -- that's a red herring. we don't need to discuss the issue of parody. if you have a system of proportional representation and you get 55% of the vote, you need 55% of the representatives. in the system we have in the united states, with single member districts and winner take all, a neutral district will never produce exactly the same breakdown of legislatures as the

breakdown of the votes in the election. that's -- i mean that's a side issue. what do we do with this statement, partisanship played some role. >> your honor, partisanship by itself cannot violate the constitution. if you inflate that far beyond what was intended by the judges who wrote that opinion, the case of gaffney versus cummings -- >> this is what interests me about the case. if we assume, as the district court did, that partisanship is not a legitimate consideration and not like respecting county lines, and if we interpret the district courts opinion as finding that partisanship was part of the reason for the plan that was adopted, then is the

test the test which my understanding is, what we normally apply in a mixed motive situation. if an illegitimate constitutional consideration is one of the reasons, the burden shifts to the defendant to show things would have come out the same way, even if that factor had not been in the case or is it what the court said in bush versus vera and other cases in this context, that's not the test. the test is whether the illegitimate -- >> accepting a lot of premises in the question that are counter factual in the opinion and what was found here and all of that. if you are going to make partisanship illegitimate, which seems like a fool, frankly, it ought to be predominant. you wouldn't want to say the

line drawers have to have complete purity of heart. >> are you saying it's permissible to use, as one factor an illegal standard if there are other factors that are also in play? that it's permissible to use an illegal standard in part? is that what you want us to write in this opinion? >> no one thinks it's illegal. >> that's one of the issues in the case. we'll talk about that later in bipartisanship. if you want to say it doesn't make a difference because partisanship is valid, fine, that's your point. my question is, it sounds to me, response to your answer to justice alito, you are saying it's all right to use an illegal standard, in part, to reduce equal representation. >> for all the same reasons that the court has many times said we are not going to say racial consciousness is enough to

validate it. i would think you would want to follow the same approach, even if you are going to adopt the parody and partisan considerations which makes no sense. it's about trying to decide whether it's race or party. when you come to the conclusion that it's party, then it's okay. >> can i put in my notes, you are arguing partisanship is a valid -- >> you can, your honor. you said it last year in the alabama case. one of the legitimate redistricting criteria they can consider. >> there is -- i'm suddenly waking up here. >> your opinion, your honor. >> how do we write this? two areas that are difficult to write. one is, i know this 10% rule. but it doesn't say we don't look at it at all. we institutionally can't review thousands of pages of record in every redistricting case.

so, what are the words there that describe the standard we should bring to this? the second, which is a direct application of the first, is you are quite right. how can we say that partisanship can't be used at all when doing one person, one vote. but the sky is the limit. when, in fact, the sky is the limit when you are drawing boundaries. now, how do we reconcile the institutional ability with the need to have policing here? and how do we reconcile what we say in this case with what we held in the growing area. those are two questions in the back of my mind. i would like to have -- >> can i answer the second question first? >> 50 words of less. >> seems it would be not defensivable to adopt a rule in -- effect in terms of

biassing the map. in line drawing, you have always insisted there not only be a bias effect, but very large. >> i didn't ask what we shouldn't say, i asked what we should say. >> apply the rule in all cases about deviations. is there a rational policy that the state can articulate, the reason why they arrived at this difference. here we have the voting rights, the rational and legitimate. >> let's talk about that for a second. if action in redistricting or overpopulation would constitute illegitimate can the answer we are doing it to comply to get preclearance legitimize that? >> yes, your honor. the court said a number of times it's a compelling state interest. >> my question is, if the action that is taken would otherwise

constitute illegitimate -- in other words, it's an issue of, you know, we said in a case that it's not an excuse, not a complete excuse for intentional discrimination that you are trying to avoid liability under title 7 for diskrigs. i'm wondering if it's different. if the justice department is insisting on conduct that would institute a violation, if they are insisting on more than they should be, is that an offense? >> the one thing that -- >> i understand that. it doesn't say all bets are off. >> no, your honor. the line the court has drawn is between map that is go too far and maps that don't.

where they predominate and subordinate principles here. what you have in this case is the quintessential map where it's not true. >> you are avoiding my question. what are the requirements the justice department asks for for preclearance go too far. >> if the justice department reads the voting rights act in a manner that requires them to do something that would go too far in a predominant sense, there's a constitutional problem. there's no indication that's what happens. >> so, whether or not preclearance is a defense depends on whether upon the justice department is asking too much? >> it could be, your honor. there's no indication of anything like that here. this is a case where they said -- this is not like the '90s, where you had to create new districts. >> look at the findings. while partisanship played a role in the increased population

deviation associated with changing district eight, so, too, did the preclearance goal play a role in motivating the change. it's the first half of the sentence, which is raising the issue that i think people are trying to get you to say how we write that, you know, because it says it played a role. so, we are going to be asked here, by the other side to expand on what that means, play a role. we have to write an opinion. if you win this case, they will have to be words that support you. so, how do we take this thing? what would you say about the word play a role? >> i would say two things, your honor. first of all, it's a tiny role in this case. seconds of all, even if it were the only reason for a population deviation under 10%, not defensible to say that, by itself, is unconstitutional. the effect on any interest from

this difference of population absent in bias in the way they elect a cant. it's not a problem you want to recognize. even if pure motive with partisanship, it's not something that ought to be taken seriously as a constitutional problem. here, the motive is to make sure the districts pass preclearance. less than 50% of the commissioners may have one district where they increase the deviation slightly, like.2%. not one of the ten that were offered to the justice department. that's a tiny, tiny, tiny sliver of partisan effect. >> if there were a case where the commissioner or whoever was responsible for producing the plan produced or chose between two plans, plan a has a deviation of.1%.

plan b, 9.9%. they write a report. it came down to these two plans, we chose b to maximum the representation in the legislature of republicans or democrats. you would say that would be constitutional? >> i think, if that's the only thing that was problematic about the map, you might say it's constitutional. that's not this case, obviously. >> no, it's not this case. >> you said a map that's a gerrymander. plus, the intentional abuse of the 10% rule at 9.98%. all of that together, you affirm the finding. by itself, i don't know that i would say -- >> that's because there's no constitutional criteria where you draw the district lines. there is a constitutional criterion for how you -- how you weigh voters district by

district. there is. one person, one vote. there's no such criterion for where the location of a district line has to be. >> this court said over and other again to give court leeway because representation is better if you give them a chance to make districts within the 10% band. if you allow them to do what's being suggested here, to accuse and bring partisanship in, they can get to court and get to trial by that. exactly what you said is going to happen. everybody with a political motivation to try to do something to undercut a map is going to come in. itis easy enough to elect partisanship. the only evidence they have and the story of district eight is a pattern. the hispanic districts they underpopulated and the native americans happened to vote democratic. you have this pattern. the chart on 112-a. ice not evidence. it's equal with what the court found happened.

they wanted to make the districts more persuasive to get preclearance. they got preclearance. this is a case where you wonder, where's the beef. what are we here for? there's no problem with the map. it's not a partisan gerrymander. everything that is complained about here, it was done unanimously by all five commissioners who adopted the goal of getting preclearance and adopted the idea that they had to get ten districts, not eight districts. every single change to the ten districts was unanimously voted by all five commissioners. this is a case where there is nothing seriously being argued here that could possibly have gone to a constitutional violation. it seems to me we can talk about whether a pure partisan case ought to, byis isis istself, ify

problem is deviation. not do that for the reasons you said. boy, this case is so far from that. i mean, the republican commissioner, appointed commissioners are voting for everything they complain about. they, too, want to get free clearance. the state of arizona wants to have its map go into effect for the first time since the 1960s, when it's covered by the voting rights act rather than the federal court put it in effect because preclearance was denied. they hire lawyers that work in the justice department. told them, if necessary, redoing the lines go down to the 10% limit. they tried hard to minimize that. one of the things that's important to recognize here is you could have equalized the population here and gotten districts to the same level of hispanic population. you have to draw the kind the court has many times criticize zed. there are lots of hispanic

people in the state of arizona not in these districts. they are spread all over the place. if you are going to draw compact districts that represent bounties and communities of interest, something has to give. what gave here was a modest, tiny amount of population variation. it seems not a serious candidate for a constitutional validation on the facts of this case that aren't challenged here. court has no further questions. thank you. >> thank you, counsel. miss hairington. >> thank you, chief justice. the question in this case is not weather question five compels deviations, the question is whether deviations are permitted by the constitution.

this court made it clear when state districts plans are 10% of total deviation from a perfect population quality standard, they are presumed to be constitutional. itis a rule of three principles. if i can take them off, the deviations do not, by themselves equal protection. a 10% leeway enhances citizen zs fair and equal representation by allowing states to have districting principals. limiting it in deviation cases protects the state's sovereign right -- >> is 10% the minimus. it is misleading. >> it's the term this court has used. >> i know. >> i have never accused the court of being misleading.

the point is these 10% deviations from qualify don't have an effect to effect citi n citize citizens? >> i don't think that's contested here. the other side is willing to concede that it's presumptively okay, which means they have to come forward to show that there were invalid reasons why there's this discrepancy. >> that's true. in our view, justice scalia, our view is the plaintiffs did not make a case of discrimination in this case. the factual findings about the motives aren't relative at this point. -- it means you have to bring in other evidence. it doesn't mean you are out of court. >> it means the state doesn't have to justify the reasons for deviations. so, in this context, to make it

in any context to make a case, what you have to do is put in enough evidence from which the discrimination can be made. what that generally requires is the challenger has to put in enough evidence to rebut the presumed reasons for the challenged action. in this case, the arizona constitution sets forth the redistricting criteria to use in drawing district lines. at a minimum, the plaintiff should have come in and said the deviations they observed were not explainable as in service -- >> let's assume the opinion of the district court found that partisanship was a consideration. so, are you saying that that finding can't be sustained because it wasn't based on sufficient evidence brought forward by the plaintiff? >> point of clarification, part of the opinion you read is talking district eight. itis not a finding that partisanship played a role. if you read on in the paragraph,

the district court said that the amount of deviation atrip uted to make it more competitive was less than 1%, i think it was.7%. it's really a small, very think .7%. >> was it a factor or not? was partisanship just irrelevant, it played no role, everything would have come out the same wam without partisanship? >> the district court found with respect to one district, two of the five commissioners were motivated in part bipartisan ship motives. our first position is that this court doesn't need to get to what the actual findings were as to the motive. because what the plaintiffs needed to do was come in and demonstrate at the front end that the lines on the map couldn't be explained as an effort to comply with legitimate criteria. >> is the deposition -- what is the position of the united states on the question of whether it's permissible to intentionally take partisanship, to use partisanship as a guiding

principle in redistricting. is that permissible or not? >> we haven't taken a position on that. >> i know you haven't. i makes it difficult to address it. >> it's certainly -- there are lessons that can be drawn from the court's cases. in gaffney the court indicated that certain consideration of politics and partizan ship does not necessarily make a plan unconstitutional. but again in this case i think in order before you get to the question of what the state's actual motives were, there has to be some demonstration that the motives were not the announced motives in the constitution. >> you're unwilling to tell me whether intentional use of partisanship and redistricting is acceptable or not. >> i think this court's decision in gaffney indicates that it can be permissible. the districts body in gaffney was driven by a desire to equalize partisanship. >> i took it that the position

of the united states is at least, since many commissions are nonpartisan because they have two people who are more part zan on one side, two people on the other side and one neutral. so at the least where the commissions -- commissioners don't account for a majority. the partisan motive is not held by a majority of the commission, then it is constitutional or some members of the commission to take partisan consideration into account where they're not a majority and where the result is under 10%. >> i think that was the district court's conclusion. >> is your conclusion as representing the united states. >> well again we haven't taken a position on how one would analyze a partisanship if there was a finding that you get there -- >> i read the finding as saying well, two members of the

commission out of five did have a partisan motive in part. >> yes, sir. >> so i have to -- you have to, i think have to say whether you think that is that situation is constitutional or not. >> well, let me make the pitch one more time for having a robust prema fascia case. the plaintiff needed to come in kourpt and say here's a map, it can't be explained by the criteria identified in the constitution. the very first criteria includes compliance with the voting rights act. if you lock at the map and kp districts are underpopulated and which are the ability to elect districts there's a perfect correlation. that was a legitimate explanation for why there are deviations in the case. >> i don't understand this two out of five. do you think in four of the justices of the court voted a certain way in the case because they were racists, the opinion would still be valid because after all five of us weren't. would you even consider that?

and why is it any different for a commission like this, the mere fact that two of them are -- if partisanship is indeed bad. >> i think we don't have a positionen how would one analyze that question. >> this isn't racist. number two, it's not this court. i don't know any court like that. and number four, if you're going to say, if you're going say that no members of a redistricting commission can ever have partizan views, i don't know where you're going to get your membership from. i mean, that is that many of these commissions, i would think, would balance people who know about districting and who are also republicans with people who know about it and are also democrats and then you have someone of undoubted neutral -- >> which is not the case here. >> it's not. >> that places a lot of weight on selecting the fifth person who is lily white pure, right?

and if that person deep down is partisanship one side or the other, the whole thing goes. >> this court -- >> and that is the allegation here, by the way. >> this court has repeatedly said that politics is always going to be a part of redistricting. >> right. >> you can't -- >> i agree with that. that's a different point. >> you don't have a position on whether that's acceptable or not. because the difference between saying something is a necessary evil and saying it's evil. >> i think this court's decisions have told us that it's fine to have partisanship play some role in redistricting. that's the lesson in gaffney. >> i'm sfriurprised by the way read the opinion. >> can you give me the page please? >> it's on 63a, running over into 64a. and in the final paragraph that begins at the bottom of the

page. the majority of the panel have concluded that plaintiffs have not demonstrated a partisanship predominated over legitimate redistricting consideration. doesn't that mean that they found that there were some ill legitimate consideration or at least -- and they assumed that partisanship was an illegitimate consideration? >> from where you're reading from earlier, it's clear that what they're talking about partisanship played a role only with respect to district 8. in this court allows the plaintiff to come in and point to deviations -- >> just to clarify your answer. you think what they said in footnote ten only applies to one district? >> yes. that's my reading of the opinion. i haven't heard the other side disagree with that. in this court makes it too easy for the plaintiffs to come in and point to deviation, it's going to wipe away the 10% leeway. >> thank you, ms. harrington.

general hearn, you have four minute remaining. >> thank you, mr. chief justice. >> what about footnote ten. you agree with the characterization that the other side has made? >> well footnote 10, no i do not. the portion i would quote was not limited just to district 8. partisanship was rank in this redistricting process and is demonstrated objectively with the chart and by the fact of district 8 which was not submitted for preclearance. >> i want a finding. i want a finding. i don't want to look at a chart to make my own factual determination. what factual finding other than footnote 10 is there. >> from the appendix of 107a where the statements judge clifton correctly finds that the irc was actually motivated bipartisan advantage and hope for voting rights preclearance.

we have a majority finding for that fact. that is two members of the court specifically found that partisanship was tw one of the two motives to explain these deviations from one person, one vote. clearly it was a motive, at that point, as even judge silver noted. >> to what extent? the other side is going to say yeah, that's true, but it's only true as to that one district discussed in footnote 10. >> if that's so, then they would have stopped a adopted the additional map and not continued to deviate from 4% to 8% for the final map. the initial map, the draft map was a 4% deviation. dr. king, their own expert said that this map complied with the voting rights act and yet they went after that and continued deviating in underpopulating district to get to the 8.8%. that included the mass nations with district 8. if the only legitimate reason

was to obtain preclearance, when they would have accepted the draft map and it would have been game over. but they didn't. >> i thought i was because they wanted to make super sure that they complied with the voting act. i think that's why they said they kept going. >> the explanation that was made is that they're quote strengthening the districts by continuing to underpop late districts because their consultant said that does help us get voting rights act preclearance approval. that was the explanation made. but if their own expert said the original map, the draft map satisfied the voting rights act and the only reason to depopulate the districts, then that shows that partisanship was a very -- i understand two of the members said it was not the primary motive but i certainly was a pervasive motive in the process by choo these districts were drawn. and our position is a very

narrow one that we ask the court to hold is that partisanship does not def vat from one person one vote and a mistaken belief that preclearance was necessary to underpopulate certain districts also does not justify deviating from one person, one vote. >> where is the district in which or the state in which partisanship does not play a role in redistricting? >> we think partisanship is always going to play a role. but there's an outer limit certainly as just sis scalia noted, an articulatable standard of one person, one vote. that's a rule that we can cabin the part shzanship. even if this fifth member ended up being partisan interest for the democrats. that's fine. the problem here isn't that they had partisan motives, they deviated from the one person one

vote principle to further the partisan voters. >> if i can ask the question that ms. harrington left with. i'm sorry. >> please. >> if you're saying within the 10%, to go from 1% to 2% or 2% to 3% and then somebody can come in and say that's partisanship, it means that every single plan will be up for grabs in every single place, doesn't it? >> i don't think it does. and the answer would be it doesn't because in this case there were no other legitimate reasons to explain it. if that is the reason and the only reason to deviate only other legitimate reason to deviate from one person one vote, it is not a constitutional plan. but that is not present in all of the other cases. >> thank you, counsel. the case is submitted. monday the supreme court heard oral argument in united states versus texas on president obama's immigration executive

orders. the case stems from a texas courts injunction against the order allowing some undocumented immigrants to stay in the u.s. you can hear the oral argument friday at 8:00 p.m. eastern on c-span. ♪ c-span's washington journal live every day with news and policy issues that impact you. and coming up friday morning, politics reporter for the new orleans advocate will join us by phone to discuss the debate over the removal of confederate memorials in new orleans. however, the city remains divided on the issue. and then hannah smith, senior counsel will be on to talk about the recently argued case. the case deals with religious liberty and the affordable care acts contraceptive mandate.

>> and founder member of the band nirvana will join us to discuss the role of fair vote which advocates for a variety of electoral forms. be sure to watch c-span's washington journal -- -- to the middle east and europe. friday mr. obama is in the uk where he meets with british prime minister. you can see it starting at 11:50 a.m. on c-span. saturday night at 10:00 eastern we'll take a look at some of the speeches by president obama during his two terms at the white house correspondents dinner. this year will mark his final attendance at the dinner. >> turns out jeb bush identified himself as hispanic back in 2009. but you know what? look, i understand.

it's an innocent mistake. reminds me of when i identified myself as american back in 1961. join us saturday night at 10:00 eastern. tune in for the live coverage on saturday april 30th, beginning at 6:30 eastern on c-span. next, national highway traffic administrator rosekind. this was part of a house committee oversight hearing. it's an hour and 25 minutes.

ail ask all of our guests to take their seats. we'll now come to order. i'll recognize nifl fmyself for minutes for an opening statement. it's always good to have you here. we look forward to your testimony today. there are a lot of important things that we need to discuss, some things have changed since our last visit here with the passage of the highway bill. we're grateful you're here today. your ad, the national highway traffic safety administration was established by congress in 1970 to reduce deaths and injuries from motor vehicle accidents and to help make our nation's roadways safer. the important of the agency's mission cannot be understated. 50 million vehicles recalled and a surge in traffic fatalitiefat it's clear that your work has

implications that affect the lives of virtually every american. the life saving nature of nhtsa's mission require congress to ensure compliance with the standard and processes. it also requires us to monitor the agent sit's ability to keep pace with technology, keep pace with advancements that promise greater safety and mobility. we've seen over the last few years failure to comply with the safety standard or a misunderstanding of the vehicle construction design can lead to delays in safely recalls, roadway fatalities and preventable deaths. we've included many reforms in the safety title for which this subcommittee was responsible of the fixing america's surface transportation act passed by congress last year ansigned into law last year. among those reforms include to the national traffic safety

administration was to implement the 17 recommendations issued by the department of transportation off of inspector general following a comprehensive audit of the agent sit's internal processes. those recommendations are intended to improve nhtsa's collection of vehicle safety data so that safety defects can be identified earlier and faulty cars can be removed from the road faster. the recommendations are also intended to help the national traffic safety administration keep pace with complex vehicle technology. nhtsa pledged to implement all 17 recommendations by june 30th of this year. following this hearing i will send a request for a full breakdown of your administration's progress towards implementing all 17 recommendations. the recently passed highway bill also contains a number of other measures intended to protect the driving public, including improving nhtsa's safety recall processes, increasing the

availability of vehicle defect information to consumers and keeping congress apprised of the agent sit's activities through the submission of an annual agenda. each of these reforms work together to ensure that the agency remains focused and dedicated to its mission of saving lives. and that the cars american motorists are driving are indeed safe. we also must ensure absolute compliance with safety standards and processes from vehicle manufacturers, suppliers into the automotive industry. their role in advancing roadway safety is as critical to the goal of reducing traffic fatalities. to that end the recently passed highway bill contains provisions that strengthen remedy and repair obligations among auto makers for vehicles under recall and requires greater accountability from dealers and rental car companies to ensure

that consumers driving away from the lots are driving safe cars. in addition to the implementation of the fast act, there is much more to consider today and i certainly do look forward to discussing the status of the ongoing takata air bag recall. back home in texas there was another tragic fatality tied to these air bags. the national highway traffic safety administration established a coordinated remedy program in 2015 to accelerate the replacement of defective that data air bag inflaters. despite this program, the take rate or the percentage of people issued a recall that take their vehicle in for servicing remains low. always i commit to you that we will do whatever possible for the public service campaign to make sure this word gets out to consumers. i hope to hear about your coordinated remedy program and what additional action nhtsa is planning to solve this problem.

i also look forward to discussing how the agency is working with auto maker to protect vehicles from cyberthreats and how the agency is preparing for the agent it's future of vehicle to vehicle communications, autonomous cars and beyond. we provided for a significant increase in resources for the national highway traffic and safety administration in the recently passed highway bill. some of those are contingent upon meeting the performance set forth in the oig report. finally i would like the say that you have been good about coming in when we ask, you've been good about being straightforward with us in your answers. for that i'm appreciative. it goes without saying everyone should know where their vehicle identification number is located on the car, lower left hand windshield and the driver's post that number can be entered into your database, safe car.gov and find out if that vehicle is

subject to a recall. it's important information. our subcommittee vice chair actually had two recalls on his vehicle an it was delineated that way. i encourage people to check the cars yourself or your loved one of your child, someone for whom you're responsible. because it is the responsible thing to do. and i will yield to the ranking member of the subcommittee for an opening statement, five minutes, please. >> thank you, mr. chairman. and i appreciate that really important public service announceme announcement. seriously. we need to encourage our constituents and our american citizen to do just that. so i look guard to hearing today ou nhtsa is addressing ongoing and emerging safety challenges. last summer i know you administrator road kooisekind we

to testify. the fallout from the air bags continue. toyota announced the recall of another 60,000 vehicles this morning. so these recalls keep oncoming. just last week it was a 17-year-old in texas that died when her air bag ruptured during a low speed accident. and consumers are rightly concerned by the expanding class of vehicles impacted by this and other defects that drove 2015 to be a record setting year for auto recalls. in 2015 traffic fatalities also increased by 9% reversing years of progress. we can't have another year like 2015. nhtsa has made progress in important areas, for instance under a new rule, heavy vehicles will be required to have electronic stability control, at the same time i would like to see more progress in other areas such as rear seat belt reminders.

as we work to improve safety, that's why i'm concerned about reliance on nonspecific voluntary standards. the proactive safety principles released earlier this year set out some broad areas for imt improvement. i agree that the industry and nhtsa should be more proactive in examing early warning within increasing recall participation and enhancing cybersecurity. but i worry that progress in these areas will be limited if we don't have ens forcible standards. the lives of drivers, passengers and those sharing the road are too important to rely on broad principles. we need to ramp up our approach to safety. aalong with the full committee have introduced the vehicle safety improvement act. and our bill would increase penalties for violations of safety standards, double

nhtsa -- last year congress considered a surface transportation bill. while i'm glads that we finally passed a long term transportation bill on safety. this bill, i think, was largely a missed opportunity. but we can fix that. bills like vsia are what the subcommittee would be advancing if we want to make meaningful progress toward reducing vehicle deaths, in addition to current safety challenges, nhtsa and the subcommittee must think about the next generation of vehicles, vehicle to vehicle technology, automated driving have the potential to improve highway safety but there's a lot to test and figure out. and let me just say that consumer privacy and strong security need to be built in to

these technologies from the get-go. and nhtsa needs to be provided sufficient resources to adequately review these technologies before mass deployment. that gets to a broader point. nhtsa needs adequate funding if we want adequate safety. we get the government that we pay for. and when our consumer watchdogs don't have enough resources, we shouldn't be surprised when they don't keep pace with our safety needs. we need strong standards coupled with the resources to develop and enforce them. and without that we aren't going to make the progress we need. e i welcome our witnesses and look forward to your testimony. i yield back unless someone wants almost a minute. i yield back. >> the chair recognizes the chair of the full committee five minutes for an opening statement. >> thank you, mr. chairman. auto safety, it's a matter of life and death.

yes it is. there are not a lot of issues as important as keeping americans safe on the road. oversight of nhtsa is an essential part of this committee's work in protecting drivers across michigan and across the country. with over 250 million vehicles on the road, today's hearing offers an important opportunity to evaluate nhtsa's efforts of fulfill its core mission in making sure that our nation's roadways and vehicles are indeed safe. we've seen nhtsa face many challenges. the agency has struggled to collect and take information on meaningful safety data and major recalls have come sometimes way too late and often with unclear messages on how to fix the problem. we have sadly all too familiar with the tragic consequence of safety failures. fixing american surface transportation act signed into law last year included numerous

reforms sponsored by members of this subcommittee to address the challenges and improve accountability, transparency and efficiency at the agency. i thank chairman burr gas for his efforts. i would know that while the fast act represents a positive step forward in improving auto safety practices within nhtsa, there is still more that we can do and should do. with low recall of come pleex rates, the ongoing takata recalls and cybersecurity issue suhs, other reforms have to be considered to prevent further tragedies. one problem that we've seen repeatedly is an agency struggling to keep pace with the next generation of automotive technologies. being from the auto state i understand how innovation and technological advances is developed and introducing greater complexities in today's vehicle. it's tougher. it is.

however it is nhtsa's responsibility and obligation to stay on top of the developments to protect the driving public. part of the problem is a lack of good testing and research facilities for connected and autonomous vehicles. facility like michigan american center for mobility will run, critical policymakers, preparation and understanding of these advanced technologies with faster consumer adoption. until we have an accident and defect free vehicle and roadway system we can never put too much emphasis on safety. you can't have safety without testing and i want to explore how to move forward with critical testing facilities which can see cure america's continued leadership in advanced automotive technologies and also protect american facilities and families on the road. the automotive industry is vital to michigan's economy, as well as the country's. robust auto safety is fundamental to that progress.

we have to continue to work together to enhance vehicle and roadway safety for our nation's motorists and i yield the balance of my time. >> it is a prime sporimportance us. we know that government can't guarantee 100% safety but we know it's a goal we all should be striving toward. and we appreciate your willingness to work with us on safer vehicles and a safer environment for those. chairman burgegess mentioned th takata air bag hearing and we look for an update on that. we're continuing to lock at that and hear about this issue. the driverless cars, the vehicle-to-vehicle communication, i'm hearing more about that, and the automatic braking systems. we know that these are items

that have the potential -- my constituents are concerned about the decisions that you make, the actions that you take and we welcome you to the committee again. i yield back. >> gentle lady yields back. the chair recognizes the ranking member of the full committee, mr. pallone from new jersey, five minutes for opening statement, please. >> thank you, chairman were calling this hearing so we can discuss nhtsa's critical mission of making our road safer and how congress can best support that

mission. it's an exciting time in the automotive world right now from vehicle-to-vehicle communication. while some may want to focus the hearing on the future of the automobile, and i do want to hear that nhtsa industry has the tools necessary that deal with the are changing landscape, we must address the deficiencies plaguing the industries. we've seen massive recalls for general motors ignition switches, that data air bags and toyota unintended acceleration. just last night we learned that yet another death had been linked to a faulty takata air bag. while some recalls may occur, industry must take responsibility for its own failures and do more to prevent

safety deficiencies from putting the public at risk. we start with having the willingness and conviction to effect real change within nhtsa and throughout the city. last year we also unfortunately saw a rise in traffic fatalities last year. according to nhtsa projections, deaths increased 9.3% to 26,000 people in the first nine months of 2013, compared with the same period in 2014. there was also a 30% rise in serious injuries in the first half of 2015 compared with the first half of 2014, up to nearly 2.3 million serious injuries. in january the deposition of transportation announced an agreement on safety principles between nhtsa and 18 major manufacturers. it's severely lacking in meaningful details. it's mo nothing more than agreement to agree in the

future. i have serious reservations about the closed door process by which was agreement was drafted and finalized. it lacks ens forcement to make sure that the oauto makers follows through. now is the time for greater accountability, greater transparency and better communication between auto makers and the agency charged with regulating them, as well as the public, not just a set of voluntary principles. last year congress passed the transportation funding bill, the fast act. that legislation was a missed opportunity to address accountability, transparency and communication. it should have dealt with used car safety, speeding up the recall process and eliminating regional recalls among other things. the vehicle safety improvement act of 2015, a bill that was mentioned and that i cosponsored last year would make those changes and a lot more. our bill is a starting point to

make sure that the millions of drivers and passengers on our roads are kept safe. this year is the 50th anniversary of the national traffic and motor vehicle safety act of 1976, the law created nhtsa. the auto alliance stated that the tafatalities are down 80%. we need to continue the legacy. we' on our way to incredible advances but we need to ensure that consumers get there safely and i look forward to continuing our discussion about how best to move forward. thank you, mr. chairman. >> chair thanks the gentlemen. the gentleman yields back. the chair would like to remind members that all member's opening statement wills be made part of the record. again, thanks to our witnesses on both panels for being here today and taking the time to testify before the subcommittee.

we will have two panels. each panel of witnesses will have an opportunity to give an opening statement followed by questions from the members. once we conclude the questions on the first panel, there will be a brief underscore brief recess to set up for the second panel. and our witness pnl for today's hearing includes on the first panel, dr. mark rosekind, the administrator, mr. rosekind again thank you, we appreciate you being here today. we appreciate your willingness to be able to members of the subcommittee. appreciate your making available the coming to your facility and looking to see what your and your fine folks do on a daily basis. you're now recognized for five minutes for an opening statement. [ inaudible ]

>> chairman burgess, ranking member and others. thank you for allowing me to be here. last year was one of the most eventful in this five-decade histy and this year promises to be just as significant. in road safety we face a large and tragically growing challenge. we lost 32,675 lives on american roads in 2014. and as you've cited our 0 early estimates show that the traffic fatalities have appeared to have grown, up 9% in 2015. i believe that the only acceptable goal is zero traffic deaths. every american should be able to drive, ride or walk to their destination safely every time. that is a goal that drives or work. el this year secretary fox announced the president's proposed $1.2 billion budget for nhtsa that includes important investments in nhtsa's behavial safety efforts and vehicle automation.

this funding will further support the ertz to build on the progress we've already made. i strongly urge your support for the president's budget proposal. i'm going to begin with the tappic that receives far less public attention than is due. human behavior on the road. hugh mar error is responsible for 94% of all crashes. we know there are hiefly effective methods to combat these behaviors. but doing more of the same will not get the job done. in a series of traffic summits we challenged stakeholder to develop new ideas. those efforts will continue as we develop short and long term strategies to eliminate traffic fatalities. nhtsa is acting on multiple fronts to raise the safety of vehicles already on the road. nhtsa requires electronic

stability control on heavy vehicles and to upgrade rear impact guard on trucks and trailers. we're working on a rule to require the installation of speed limiters on heavy vehicles and a rule on vehicle-to-vehicle communications, a technology that could prevent tens of thousands of crashes every year. we're leading on vehicle safety beyond the regulatory process. last month we announced an historic commitment to put the automatic braking in all new cars by 2022. this agreement will make this standard three years faster and that the agency had tried to achieve the same goal through the regulatory process. our proposed update to the five-star ratings program will put more information about vehicle safety into the car buyers. the updates will rate vehicles on crash avoidance and how well

they mitigate the harm of pedestrian impacts. this year we'll offer manufacturers operational deployment guidance that outlines out the autonomous vehicles should perform on the road. we'll work with partners to provide model authority and make sure that we meet the goal of encouraging safe innovation. while we look to the future, we must maintain focus on safety today. in 2015 nhtsa had nearly 900 recall campaigns affects 51 million vehicles. nhtsa's launch unprecedented effort to accelerate the takata recalls. a coordinated remedy program issued to takata accelerated the recall recommendty process by two years or more. this is the most aggressive approach in the history. while identified defects and

recalling vehicles is an important safety mission, we prefer to avoid the problems in the first place. in january secretary fox announced an historic agreement on a series of concrete commitments to safety including targeting 100% remedy completion rates. this could change the safety conversation from reactive to proactive, helping us catch the issues soon are or preventing them. we were tragically reminded how urgent this work is. two weeks ago today a 17-year-old driver lost her life as the takata air bag in her car ruptured. the local sheriff said if it weren't for the rupture she would have been able to walk away from that crash. the inflart in her vehicle had already been recalled but the repair had not been complete. we all play a role in making sure another tragedy like this doesn't happen again. you're going to hear nhtsa talk a lot in the next year about proactive safety.

about the need of all of us in a role of protecting the public to make safety our highest priority. doing so requires new ways of thinking for nhtsa, dealers with safety advocates and for the public. i appreciate the opportunity to testify and i'm pleased to answer your questions. >> chair thanks the gentleman for the testimony. begin by recognizing myself for five minutes for questions. again, i appreciate you being here today. can you tell us since this last incident was so recent, and i don't know that i've seen any sort of official write-up of what occurred, but the air bag unit in question was under recall but what was the difficulty in getting the recall information to the end user? >> specific to that case, that was a 2011 recall, actually for a different manufacturing defect. the manufacturer reported

sending at least six notices to the family, the family reports not receiving any of them. so that's being investigated right now. >> well, certainly seems like we've uncovered a weak spot in what is -- should be the vehicle notification and the user getting back to get the problem taken care of. is in is problem because this was a second or third owner or was this the original owner of the car? >> we believe it was a used vehicle. so multiple owners of the vehicle. and you've hit on it, which is as much as is currently being done to notify people, it's not enough. so we have been working with the out mo to makers with had our own programs, we've just established with the independent monitor 19 new strategies, more robust ones for the auto makers and takata to go after people to inform people they're available. we have a dozen activity going

on with nhtsa including a new national campaign, safe cars save lives. in spite of those what we know is it's not been enough. i do want to thank you because every time you've been good about mentioning safercar.gov. in we saw a spike of 150,000 to 175,000 checks of people's v.i.n. numbers. every time we make people aware, they pay attention. i thank you. you've been so good about doing this. >> this was in a recently highway bill that we did about state notification to consumers. state of texas i've got to take my car somewhere and the guy checks the turn signal. i'm happy to comply with it because i can drive my car another year without getting a traffic ticket. is there any way to ade the

compliance with the recalls at the state level as part of the things that they check along with pollution and turn signals and tire wear? is it possible to have this information as well? >> yes. thank you for the f.a.s.t. act. this is one example of one of the elements that could help promote better recalls. what you're identifying is a pilot program. right now there is no procedure, there's no technology or funding basically to figure out thou go do this. when you get your car registered is the way to notify people. it's great about the pilot program, up to six states with work with us to figure out what the procedures need to be, what technology need to be in place and basically how the procedures are going to go to make sure that happens. to give you a feel, the v.i.n. lookup is for consumers with, one person at a time. here you're looking at hundreds of thousands of lookups potentially daily to get the work done. we have to figure out how to do

it. a great touch point to inform people. >> somehow when you make it important to people, it can involve money and instead of making a punitive, if there was a proactive way -- this is a question i need to ask the manufacturers, actually an incentive program to comply with a vehicle safety recall if someone has been identified, then i would encourage if there are any manufacturers who are listening today to consider that approach as well. i got to ask you this, because a little known fact because i'm chair of the motorcycle caucus and you mentioned novel motorcycle helmet problems. i was not aware of that. >> there's a group of manufacturers that put out a novelty helmet that does not meet the standard. so basically people put the mel met on thinking they're protecting themselves and it does not. >> these are sold as motorcycle helmets? >> absolutely. if you didn't know what you were buying and you thought it looked

different and cool thinking you were getting the same protection, you would not be. >> is there a requirement that a motorcycle helmet be placarded? would there be any way for a consumer to know this is a nhtsa approved or a safety approved? >> there is a d.o.t. label so you would know it is correct. these are manufacturered and put out there in certain places. >> but no label would be affixed to those. there's no label? >> it's different depending on how people are producing them. most often there's no label. if people don't know they should be looking for that, they think it's a helmet that should be protecting them. >> i learned something new today and i hope our motorcycle public is paying attention and only buy official helmets. i recognize the ranking member of the subcommittee for five minutes, please. >> thank you, mr. chairman, and thank you dr. rosekind. the math of ongoing recalls of

takata recalls have remained a huge and complicated problem. and as was mentioned just yesterday nhtsa announced 85 million more takata air bags could be recalled unless takata can prove they are save. dr. rosekind, questions about takata inflaters are endless. for example, consumers want to know how we can get accurate information to better understand which inflaters are going into what cars. and recently nhtsa stated that if a car company cannot meet the requirement to acquire a sufficient supply of remedy parts, the company should continue its quote like for like unquote program replacing older air bag with newer but identical bags. so my questions are these. does that mean that the company will be putting a potentially defective air bag into the car with the hope that it is better just because it's newer and is the consumer told this important

information at the time that the air bag is replace snd. >> i need to begin by making smur everybody understand. since their inception, 42,000 lives have been saved by air bags. a piece of safety equipment is putting people at risk. what is now known based on testing is there are at least five different factors that create the risk about a rupture. that has to do with temperature, moisture, time, the driver versus passenger side and whether it has deaf can't or not, which is a moisture a absorbing ad tif that can be placed in there. at this point we're only seeing ruptures at 7 1/2 years and that is with all of the other risk factors involved as well. so what you're talking about is right now with supplies there are a certain number that have are being replaced that has at least a 7 1/2 time year span available to protect the people in the vehicle.

>> is the consumer promised a later date to come in and get a permanent remedy? >> absolutely. when we announced the recall, the hardest part is you've hit on one of the most difficult things. you're talking about people potentially have having to come twice. what you're describing is an interim remedy that will provide more safety but they're going to have to come back for a second time. this is why we emphasized the 100%. you don't want people to get the first one and think they're done. >> there's news reports that indicate that companies other than takata are making replacement air bags. are those suppliers making the inflaters to the old specifications or the new ones and are the companies required to make the inflaters without ammonium nitrate? >> there are three other manufacturers, producing 70% of the inflaters that are being currently produced for replacement. none of them use ammonium

nitrate. none of them have had any safety problems identified. >> and how does a consumer know if her car's replacement air bag is a replica of the air bag. and how does the consumer know whether the new air bag she got in the last two years needs to be replaced? and how does she know whether the new one contains ammonium nitrate propellants? >> go to safercar.gov. see if your vehicle is under recall. if you go in and the dealer tells you it's the interim remedy, you know you have to be called back for the second fix. >> safercar.gov. >> some automobile manufacturers may be selling new vehicles with potentially defective takata inflaters. what is nhtsa doing to ensure

that all new cars are free of the air bags? >> it would be illegal to sell a known defect in a new car. so if you're aware of anything, let us know. that's something we would go and investigate. so there should be no vehicles -- again there are some that are getting like for like. right now the recalls i think are back to 2014. but all of those are being tracked because of the 7 1/2 rupture time line. >> you're unaware of any reports that some auto manufacturers are doing that? is that you're saying? >> you're saying i should inform you. have you heard that at all? you have not? >> unless it's something we know about. again there are some that haven't been recalled because of the time. >> okay. >> otherwise we're not aware of? >> thank you. i yield back. >> chair thanks the gentle lady. chair recognizes the gentleman from illinois for questions for five minutes. >> thank you for being here and

thank you for serving the country in your capacity. chairman, thanks for holding this hearing for us to continue our committee's oversight of nhtsa and the review related safety issues within the automotive industry. i would especially like to thank the chairman and their committee for their support to include my amendment in the f.a.s.t. act. it takes an important step forward to improve vehicle safety by requiring auto to makers to provide more information, sharing defective part numbers and other identifiable information will improve safety. section 24116 of the f.a.s.t. act requires auto makers to supply additional information in their 575 reports such as the name of the component, a description of the component and the part number. do you have any information about what's the status of implementation of the section?

>> important component of this act, name description and part number under way to include that according to what's in the f.a.s.t. act. >> does it require a rule making or not? >> yes. >> has nhtsa reached out to stakeholders such as the automotive repsych hers association for technical assistance and implementing the section in. >> they've been forthcoming. they've come to meet with us to help us be more explicit about what needs to get done. >> a good relationship? >> very productive interaction. >> has any information been received from oems from this new section of the law? >> any? >> new information received from them? >> we're still in the produce it phase. we'll interact with them to make sure that what we produce is something they can put through. >> do you have an idea of the time line? >> i'll tell you for sure we'll meet the fast act requirement. >> okay. and then how will the

information supplied through this section of the law be available to the public or stakeholders? ideally are you going to have it like a static pdf form, electronic database? until you foresee. >> that's the part that's trying to be figured out. that's not just with the re recycle recyclers. that's the part that's being worked on now. >> i appreciate y'all working on it. my office will continue to ensure that, you know, everything is going correctly and appreciate your service. mr. chairman, that's all i have for this witness. i appreciate it. >> chair recognizes ms. clark from new york. five minutes, your questions please. >> i thank the chairman, i thank the ranking member, thank you dr. rosekind for coming in today. am i pronouncing your name correctly? >> rosekind. >> rosekind.

okay. that was the brooklyn pronunciati pronunciation. i think it's safe to assume that cars are going to come equipped with more technological functions going forward, such as on star and built-in entertainment and navigation systems. but as we've heard in numerous hearings in this subcommittee, covering different aspects of the internet, in f the product can connect to the internet, that is going to be a target for hackers. what is nhtsa doing to ensure that the growing factors don't become new entry points for hackers? does nhtsa have plans to pursue a rule making on cybersecurity? >> let me start with the consequences. last july there was a highly visible hack of a jeep which was at least planned. so there has been known malicious pack. but it's no longer a concept.

it's real. and i point that out because without any change in our authorities et cetera within days, defect was call and a recall was under way. we're going to act aggressively and get on those when possible. you're bringing up an issue which is the more connected everything is, the more cybersecurity becomes critical. we've been on this since 2012. this is my chance to thank everybody for their support in the f.a.s.t. act. we have seven engineers on this. the f.a.s.t. act is going to allow us to add 20 engineers to deal with this. they're looking at a broad range of how you protect things, to researchers looking at what are the data elements you have to collect to see that the hacking attempts were ongoing. an active research program going on. we published a cybersecurity piece in our policy. january we held a meeting with over 300 folks coming together,

manufacturers as well as independent and researchers to get to look at these sorts of things. specifically to your question, this is an area where we need to figure out how to sort of cut that middle line, which is we talked about nimble and flexible for cybersecurity. if you come out with a rule today, tomorrow it could be kout of date. yet at the same time you need best practices and potentially rules to establish certain kinds of hard protections. i think this is an area that you're going to have to see a variety of different techniques used to get the full protection that the american public expects. >> very well. as you referred to the jeep experiment with the two researches, dr. rosekind when it comes to cars, cybersecurity isn't about data. it can really be about safety issue, can't it? a joint bulletin that nhtsa we leased with the fbi a month ago said that consumers should take appropriate steps to minimize risks with respect to hacking. can you explain what some of those steps might be?

>> yes. thank you. you're right. our focus is primarily on the safety. and that hack that was done on the jeep last july specifically dealt with control systems of the vehicle. and that's where the safety concern comes. and yeah, thanks for acknowledging the collaboration with the fbi and putting that out. and that added a lot of straightforward things that we can do. be careful what you hook up to your entertainment system. that jeep hack went through the entertainment system, for example. all of us can think about all of the things that we attach to our vehicles, whether you're nowadays a huge number connected to the web. if you're out there searching, you have a chance not just for a virus to come and be difficult for you but literally to get in your systems. there's a nice list of things in that press release that was put out basically cautioning people. if you think about it, you would want to do the same thing that you do for your home computer to protect yourself. think about your car in your same way. >> i thank you, mr. chairman.

i yield back the balance of my time. >> recognize the gentle lady from indiana, ms. brooks, five minutes for questions, please nls thank you, mr. chairman. i consider my district actually the auto auction capital of the united states, car auction services which is headquarters in my districts is the second largest auto auction company in north american, selling over 4 million vehicles a year, employ es 14,000 people in all 50 states. and i also, in north of indianapolis, i have next gear capital just expanding their headquarters in caramel. i've been to their facility where they serve over 20,000 auto dealers who depend on them for $13 billion in capital to fund their auction. they want to help protect people by ensuring that they know that their customers know of car defects before they buy. but right now safercar.gov only

allows customers to search vin numbers at a time to check for recalls. with over 9 million cars sold at auction every year, auto auctions simply don't have the s simply don't have the manpower or the resources to tediously input every single number. and so by allowing auto auctions to run every car in their lot for recall notices in one query, the consumer would be more equipped to make better decisions, higher successful recall rates and ultimately fewer accidents on the road. and obviously we've been talking about the fast act passed last year, and it studied the feasibility of searching multiple vin numbers at the same time and the fezability of making the search mechanism for the event. can you give me an update on the progress you've made, nhtsa's made with respect to the search of multiple numbers at once and what hurdles you still face. >> and actually, you've just described them, which is the nhtsa lookup is a tool for

consumers. and we don't actually even maintain the data base. that's really just tapping the auto manufacturers who control their vin data bases. so we know there's a great need and interest in having batch or bulk look-ups so you can do it as a group. the auction house, new dealerships, all kinds of folks would benefit from that. so we've met with folks and i think the biggest thing we're seeing is the technology challenge. is you're talking about the creation of some mechanism as i just said, ours -- we don't even keep the data base. we go to the manufacturers. how would you create a mechanism basically technologically to have those bulk requests going to multiple manufacturers in a very short time frame and providing that answer basically to whomever the requester is. i think at most at this point it's a technology challenge and clearly how it would get funded is unclear as well. everybody's sort of pointing to that. there are three commercial entities that exist that do that.

car fakz x is one of them. i can get you the other one. we met in july to talk about what might happen. i think technology's the biggest piece right now because no one quite quite has the answer to pull that off. >> but isn't one of our challenges that we have so many people who do purchase vehicles that are moving through the auto auctions and so there are -- so consumers it's very, very difficult for them to know if they are getting one of these cars that has one of these problems? >> absolutely. just two things. one is when i say there's a technological challenge, that doesn't mean we aren't off of it. it actually means we're trying to be more aggressive to figure out how could you fix that issue. and you've hit on another issue, which the fast act addressed for rental cars but in used cars people can still sell those without having the recalled remedy. that's one of the ways to get to those. and that's why i say we met in july and we're still meeting with them to see if we can figure out what the technological solution could be. >> okay. i certainly hope that some of your engineers working on cyber issues maybe with all of that brain power of those engineers maybe can also be tasked to have

that as a topic. i want to turn to a different topic right now. last year, or this past month, rather, griffith high school boys' basketball team was traveling to a state championship. a driver sideswiped their bus and the bus flipped and overturned as they were on the way to their semi-state game. none of the children were seriously injured. however, it reminds us all about the importance of getting seat belts on school buses. and last september you announced a series of steps designed to move the nation toward providing more seat belts to students on school buses. can you please tell us about the research projects, the data collection, stakeholder outreach? what's going on with respect to this project. >> i can't thank you enough for raising that question. there are so many headlines that people want to talk about. that's one for four decades

there's been debate about putting seat belts on school buses. and yes, it's a clear departure for nhtsa to come out and basically say three-point belts would add -- the big yellow bus is the safest way to get to and from. can you make it safer? absolutely. so we've already had one-day meetings to talk about how to make that happen. we've identified the fact that it's not just about seat belts on the bus, it's around the bus. so we're looking at everything from the red lights on the arms to guards that help people pass in front. we're looking at all those different things including our most recent meeting good b. a month ago where we polled the six states that have laws with seat belts in to figure out what they're doing and how we can scale that to the rest of the country. we're on that trying to figure out what we can do to support three-point belts on school buses. >> thank you for your time. i yield back. >> gentle lady yields back. the chair recognizes the gentleman from new jersey. member of the full committee, mr. pollown. five minutes for questions, please. >> thank you, mr. chairman.

as others have mentioned today, in january d.o.t. and 18 automakers reached an agreement known as the proactive safety principles and i'm glad to see auto manufacturers and d.o.t. try to work proactively on vehicle safety but frankly i have doubts about these principles. the principles are simply a promise to try to work together in the future. there's no substance. and even if there were, there's no enforcement to make sure the automakers keep their commitments. so i wanted to ask you can you assure me these principles are meaningful in some way, that these principles are more than a pr stunt to shift the focus away from the major safety crisis of the past few years? >> and you're absolutely correct. it's not a regulation, and they're not enforceable. and i can tell you in april we had a meet for the very first time to discuss with the automakers 100% recall completion rate as a target. that is now included in that proactive principle.

never before has -- everyone's ways talked about let's get 75% because that's the average. we're now talking about 100% should be that target. that's in there. can everybody do more? absolutely. but now we have a new target that's already in there. i think the automatic emergency braking that we've seen happen is another proactive one. and in the cyber security area chrysler actually in may is having their own two-day just industry meeting to focus on things. it wasn't intended to be a regulation. it wasn't intended for enforcement. we're going to use all the enforcement regulatory authority that we have. we're not giving anything up. my concern is the 32,675 and that we're looking at a 9% increase this year. and we all know if we continue to do the same thing we cannot expect a different outcome. so we will continue doing everything we know that works. we'll figure out ways to do it better. but nhtsa is looking for every other tool that we can find that could help save a life. >> all right. in addition -- and i appreciate that because i think that tha

even though you're admitting there's no enforcement mechanism per se that you're going to try to use other measures that you have to do that. in addition to the lack of enforcement, know, i also have reservations about the closed door process that nhtsa has been engaging in recently. with regard to the proactive safety principles. were any other safety advocates directly involved in crafting the principles? >> that process started on december 1st when secretary fox called all the c.o.s in because of all the recall and safety problems going on in the industry. it was clearly beyond just breaking records, an issue of the safety culture in the industry. he called them in and said we need to do something different. and six weeks later that agreement emerged among them basically to come up with these principles in those four areas. so that started with a meeting with the automakers. six weeks later through the holidays, frankly, is when it actually came together. so there was, again, no -- there

was not a public process. there was not what are you going to change. that was an agreement that came together. and i'll say it again. it's not intended to be a regulation. it's not intended to be enforcement. but everybody's watching. and we already have some concrete things like that agreement looking to target 100% completion. activities already going on. cyber security already being advanced. we have a safety meeting coming up next week basically where we are going to be looking at how to take aviation lessons learned and apply them to the auto industry. so in that agreement it talks about anonymous sharing of safety data. that meeting to start that process is actually happening next friday. we're watching. >> there weren't any auto safety advocates directly involved. but how are you going to try to get them involved? what are you going to do? >> that principle -- that agreement is public. it's out there. the activities basically are aware. so anybody can have input into what's going on.

and that again was an agreement of the manufacturers to proactively move things forward. >> so there wasn't any public comment period for the proactive safety principles. >> it was not a regulation. it's not intended to be enforced. >> no, i understand. i appreciate your honesty about lack of enforcement, you know, lack of involvement of the auto safety advocates. lack of a comment period. i don't think that's good, but i appreciate your honesty. how are we going -- we don't want to have a similar agreements like this in the future. i think it's important to involve the public safety advocates. it's important to have public comments, a public comment period prior to finalization. so, i mean, can you make some sort of commitment to us that in the future you'll try to do that? or what can you tell us that makes me a little -- feel a little better about the lack of all this? >> nhtsa's going to look for all the tools that are available.

and that means we're going to have as much interaction with a full range of safety advocates for all the activities that are going on. and frankly, some of the processes have clear elements where, you know, notice and comment for rule making. there are opportunities for everybody to get involved for the public docket, et cetera. there are always going to be other activities that go on that certain groups aren't going to be involved in. >> i mean, i guess my concern -- i know my time has run out, mr. chairman. is that these voluntary good practices on the part of business are certainly something we hope for. but the rulemaking process exists for a reason. and mandatory safety standards have prevented more than 600,000 deaths since the 1960s. i don't want the agency moving away from mandatory standards. that's my concern. >> and that's why i can state absolutely emphatically we will continue to regulate and enforce as we need to. and we are looking at and. we want to expand and add to our tool set that we can try to see progress on safety. >> thank you.

thank you, mr. chairman. >> chair thanks the gentleman. the gentleman yields back. the chair recognizes the gentleman from kentucky mr. guthrie. five minutes for questions, please. >> thank you, mr. chairman rosekind for testifying. it's my understanding that what is sometimes called the one nation program, referring to fuel economy regulations, was intended to coordinate or harmonize various federal, state -- and state regulations as much as possible. since there are effectively three sets of regulation, epa nhtsa and state regulation, it's come toto my attention that differences even between the federal programs make compliance more difficult. first you agree that the development of the one nation program was to provide consistency and certainty for automakers? >> yes. among those three groups that you highlighted, nhtsa, epa and especially the california air resource board. >> are you aware of the differences between programs that affect stringency and possible compliance? >> are there specific ones? >> well, one that -- if i'm not mistaken, epa credits can have a

usable life of up to ten years versus nhtsa credits having up to five year of life. so because of that difference somebody can be -- an epa credit can be compliant with epa but not compliant with nhtsa. is that a conflict? do you see that? or is that something you -- >> if there's a specific instance where somebody's questioning where that inconsistency is i would love to see that so we can see what's actually going on there. the other question to the question of consistency more generally, there is a midterm review coming up where we'll be putting out a technical assessment report where we can basically take a look at how that's doing and a draft report will come out for exactly those kinds of comments that people can address. >> somebody came to me and said they have been written up for one or the other but they look at the statement saying there's a potential of being in compliance with the epa and what nhtsa's asking for. that was an example of what i

wanted to bring out. so we'll have an opportunity during the comment period to comment on that. that could be an inconsistency if that's the case, right? >> again, if there's a specific intans they should let us know because there is sort of one rule out there they should be going by. if there's a concern they can let us know, we can absolutely take a look at it. but more importantly in that midterm review there will be a draft that everybody can comment. >> we'll follow up specific on that, then. so shifting to recalls and focus on the millions of motorists and occupants who are driving or riding vehicles under open recall, what is the status of the new media recall campaign you announced last september? >> there have actually been a variety of activities going on. that one is safe cars save lives. and we're doing media buys. and nhtsa's the agency that has click it or ticket, drive sober get pulled over, you drive you text you pay, we have these national campaigns we do. this is a new one focused specifically on recalls. the other two things i'll just mention quickly are -- besides our activities going on. the automobile associations

doing research and looking at other mechanisms. things like contacting the insurance companies so when you not just register your car but your insurance company, another touch point. and the independent monitor is also working with takata and all the manufacturers affected. as part of the consent order they're required to give us their outreach plan. we've come up with 20 robust strategies for them to pursue along with the about dozen things we have under way. >> takata is a case -- the recall obviously is different but there are a lot of recalls for a lot of different reasons. do you look at rehab fatigue, your door handle needs to be adjusted -- i've never seen one. but people say if it's a typo in the owner's manual you get i a recall notice on that. i haven't seen one. but i do see recalls that come through cars that i have. and i'll get around to that one because it's a screw in the chair seat or something like

that versus obviously takata that's a safety. is there a way you can concerned about people continuing to get recalls and all of a sudden one's more serious than others and i guess recall fatigue? >> absolutely. and i think that's been the problem with the headlines, is people get so many notices potentially when you're looking at -- i mentioned the number. but last year, 2015 was 900. beat the year before. we're talking about 51 million vehicles being affected. so yeah, just consumers -- just knowing that that's something they need to pay attention to is a challenge. then if you're getting multiple ones for different cars, that's a real problem. that's why we're trying to come up with new strajs, new approaches. there's a lot of activity going on. i think the tragedy from a couple weeks ago shows we've got to do more. >> absolutely. i only have 19 seconds. but one, you said publicly and your staff has said that auto safety technologies may have environmental benefits that would reduce greenhouse gases.

can you give a couple examples of that? in eight seconds. sorry. >> engines that are more efficient. >> the chair recognizes the gentleman from oak mr. mullen. five minutes for questions, please. >> thank you, mr. chairman. sir, if ythank you for being he. very impressive, your command and knowledge of nhtsa. i think the whole time you've been here i haven't seen you even look back at anybody behind you or even look at a note. so i will commend you for that. i'm not capable of doing that. i just want to run a little bit on the recalls. unfortunately we heard of the young lady that lost her life and that's been brought up, talked about. there were some questions about how the vehicle was registered. i get that too. but i have owned multiple

vehicles over time and i still get recalls from vehicles that i owned years ago. unless i'm mistaken i thought dmvs were supposed to notify or help notify individuals when they were registered with them of recalls. but is the dmv's communicating with manufacturers to let them know the vehicle's changed hands, some way to get the notifications farther out there? what we're having is obviously -- it's not being effective. and i understand the responsibility of the driver. but at the same time when you buy a vehicle new or used you assume everything's perfect on it. you're not looking for recalls. if you're looking for recalls you would never purchase the vehicle. if there communications with the state, with the manufacturer, with the dmvs? what is that communication like? >> there should be. but you've just hit on a -- besides things like fatigue

recalls -- recall fatigue, you're hitting on another issue. which is where in the communication did that break down? because one of the concerns you're just raising is when there's a multiple buyer, you know, you've had multiple -- the used car's been bought by multiple buyers over time, there is the assumption that somehow that transition of ownership has been taken care of, that all the appropriate information has been passed on. that's not always tracked. so now you're looking at the whole system. dmv, the manufacturer, where the notices go out p even if they have updated information on the owner. and make sure that they're sending it to the right address where you actually live. so you just hit on another issue you're trying town ralph to sort of figure out where those touch points could be. that's why there's the interest in the dmv pilot. because that's something if you're going to register the car we could get you again. and i would actually like to use you in an ad because you've got it. if you buy a new car, used car, rent-a-car, your assumption is that it has no outstanding recalls. >> right. >> not the case.

>> the other breakdown too, i have a fleet of vehicles and several mechanics that work for us in our companies. and you can't work on a car anymore without plugging it in to a computer. you would seem that there would be a way for notification to come up on the vehicle and everything connected the way that it is if there's a recall, regardless if the manufacturer is -- it's working at a certified gm mechanic or the mechanic down the road. you would think that would be a way for it to communicate because everybody's got to take their vehicles in and get the oil changed. very few people are changing their oil now in their driveway. that might be a way. and i'm open to discussing it farther with you of maybe some simple ways that we might be able to come up with more communication, more ways for just the average consumer to be able to get the technology or the information they need. i want to go back to miss

brooks, bring up the school bus issue. i have five kids. go to public school. from 12 to 5 years of age. they're going to be there for a while. and they're on a school bus all the time. the question is, though, i don't think any school is arguing the fact they want to put seat belts in the school buses. it's that they can't afford it. so is nhtsa looking at a program to help the schools? because if we just mandate for the schools to do it, they can't -- schools are being -- having issues with revenue left and right. we continuously put mandates on the school systems and you're not going to find a teacher or superintendent or someone elected to the school board that's going to argue the point they don't want seat belts in the school buses. but we've got to have some type of program to incentivize them to be able to do it and funding that goes along with it. >> and we're looking at those possibilities. and to your point, we don't want school districts to make the choice to not provide that safe

school bus because of their concerns about the seat belts. that's one of those fine lines we have to tread. that's why we came out with the policy but without the mandate trying to figure out how other states and school systems have done it. and we've met folks where they didn't have the funds but they made a decision in the district to only order new buses with three-point belts. they found a way to pull it off. >> you can order new buses that way. it's the old buses. and we know how expensive the new buses are. how long is it going to take to get the old buses off the road? you're talking about years at that point. i'm out of time, sir. thank you for being here. really do appreciate it. i yield back. >> the gentleman yields back. the chair thanks the gentleman. the chair would recognize miss schakowsky from illinois for a redirect. the chair will recognize himself for the opportunity for

redirection with the administrator for the national highway traffic safety administration. there is something that has come up relatively recently that i hear on car shows on saturday morning and that is the issue of the seat back integrity. we put our children in car seats. we put them in the rear seat. but in some crashes the seat integrity of the seatback is what fails, putting the adult then in the compartment with the child where the child is then injured. is this something you're looking into currently? >> yes. and fortunately, severe rear impacts, severe, are fairly rare and then when someone's injured trying to determine the seat back strength is more rare. which just means trying to get the data to figure out the safety benefit and other benefit

determinations and things can be challenging. but we're looking at that from a potential regulatory standpoint. and from a research standpoint. so even if we don't have the real world data we're looking at actually a new test dummy that would allow us to collect better data to make that kind of determination, which we would have to do to come up with a regulation in that area. >> very well. then another unusual thing that happened in the north texas area. the day after christmas. we had a very severe tornado. blew up suddenly, came at nightti nighttime, difficult to let people know it's coming. the greatest loss of life occurred on a tollway overpass. not people getting under it to get out of the path of the storm, which we recognize is a bad idea because of the venturi effect under the overpass. but these are people traveling over the overpass. and they got pulled off the road and obviously there were multiple fatalities.

department of transportation has ghted signs that they put up. and as you alluded to, the click it or ticket or don't -- drive sober, get pulled over. sometimes there will be traffic warnings. is there any thought to providing timely weather warnings, hail storm that we just had a few days ago in my area? this tornado the day after christmas. people that are -- i know we'd like to say people are listening to their weather warning stations at that point but they're not. they're listening to their sound systems. people literally sucked off the overpass and thrown into the lake and again, with great loss of life. >> you've just said it, we use those signs for a lot of different things. and i will go and talk to greg nadeau, who's administrator of the federal highway administration, and see if that kind of information could be added to what's transmitted to the drivers.

>> i appreciate that. do you mind if i go to mr. bilirakis first? >> no, that's fine. >> the chair recognizes mr. bilirakis, five minutes for questions. >> thank you so much, mr. chairman. i appreciate it. administrator rosekind, where do we stand currently with the v2v? if you can tell me that, and elaborate a little bit how it's going to work. >> sure. let's start with people talk about either or. connected vehicles or autonomous self-driving vehicles. department of transportation thinks of this as connected automation. it's really both. they both give you sort of added safety. connected vehicles or basically v to v, vehicle to vehicle, vehicle to infrastructure, v to x or anything else, basically they're all going to be able to talk. what we know is studies so far suggest that even two applications of v to v could prevent 600,000 crashes and save 1,000 lives.

so it has huge opportunity overall. potentially 80% of crashes that don't involve an impaired driver could be prevented with v to v. so we have actually introduced a rule making which has been accepted by omb for review just to try to set up a consistent piece of equipment that would be used for the whole system in the united states. >> okay. when do you anticipate this being online? or you know, are constituents -- the availability. give me a timeline on that. >> right now it's been accepted by omb as under review. that's kind of where we are, answering their questions. >> one year? two years? any kind of an estimate? >> i can tell you the proposal is to have it out. i'll check the final proposal. we have a specific in the proposal for when it will be on the road. my caution's just to say that our piece has it out proposed, currently under review at office of management and budget. >> thank you. next question, nhtsa has

announced several initiatives and workshops on numerous issues over the last six months and plans to complete work on these topics prior to the end of the administration. is that correct? >> yes. >> how are you ensuring adequate work and thorough stakeholder engagement is done on these important issues before the final -- before the final actions are taken? >> well, for a variety of activities they are in fact open public meetings. retooling recalls was open. we had others, cognitive distraction, live webcasts for things. right now the secretary's announced in six months nhtsa's going to put out several things if you'd like to talk about autonomous vehicles. we just held the first public meeting for that. there's an open docket for that. so for activities leading to specific products, there's both some transparency and involvement from stakeholders. >> very good. thank you. >> what are the key takeaways from the cyber security round table that nhtsa held in

january? >> fascinating exchange. because we had manufacturers in there with independent researchers and pretty much the whole mix. and i would just say, one, it was fascinating to see that everybody thought you needed nimble and flexible. cautious about regulations. because they could be outdated cybersecuritiwise before they're even in place. and the other is everybody identified this as critical not just for protection but for the trust of the american people to see this automation as things get on the road. >> very good. thank you. thank you, mr. chairman. i yield back. >> the chair thanks the gentleman. the gentleman yields back. the chair recognizes the gentleman from california for five minutes. >> thank you very much. thank you, dr. rosekind, for coming forth and answering our questions. and you're welcome to ask questions as well. but just wanted to thank you for all the work that you do and please if you would translate that to all of the good workers that you are surrounded with.

my first question has to be speaking of workers and the people you're able to surround yourself with, do you have as many people in your organization that you would need to address all the issues that you recognize you somebody addressing or getting in front of? >> no. >> i had a funny feeling that would be the answer. >> but if you'll let me, i will just say -- >> please. >> well, thank you. because this committee and the fast act is helping us get there. so office of defective designations, which we've talked so much about, has the potential now for us to hire 57 new people and address that issue. so thank you so much because that's a huge difference for us. >> 57 new people. i'm glad we were able to make sure. congress has the power of the purse. so that's up to us to give you their budgets, et cetera. i'm glad you did that. but being an engineer myself and someone who understands how the best way to get in front of an issue is to be proactive, and an

organization that has to do with traffic safety like yours, it's very important that people understand that unfortunately it's not that often that the united states constituents receive the benefit of other countries' good work on issues like this. we tend to be the leaders. isn't that the case? not always, but tend to be the leaders more often than not. >> and i try and preface this by saying i am biased. but i'd like to say certainly in a lot of the technology innovation the u.s. is a leader. >> yes. and i believe that's the case both on the issues we're talking about today and in many, many things. it's something we as americans should be proud of. but with all due respect, government does have its place, especially when it comes to safety of the american public and anybody who comes to our great country and assumes that safety is a priority for us and that we're continuing to make it a priority. so once again, thank you, doctor. i'd like to ask you, as i'm sure you're aware, in february the center for auto safety filed a lawsuit against the department

of transportation alleging that by failing to public technical service bulletins, or tsbs, in their entirety, online for consumers, d.o.t. was in violation of map 21s finally, on march 25th, d.o.t. announced that it would publish tsbs, and it has been brought to my attention that full tsbs are now available on the website. i look forward to ensuring they're all up as soon as possible. however, members of this committee worked very hard to have tsb publication included in map 21. and while i'm pleased that htsa is beginning to finally comply with the requirements, i think it's unfortunate that it took a lawsuit to get nhtsa to make that happen. i'd like to ask you about the early warning reporting system. that system was put into place in 2000 after the highly publicized ford firestone tire recalls, early warning

reporting, intended to alert nhtsa to vehicle defects as early as possible, ideally helping to identify major problems and minimizing risk to the public. however, last year's audit by the department of transportation office's inspector general, highlighted some problems with the current early warning reporting system. it says that safety defects are often miscategorized and that manufacturers have wide latitude on what information they're required to provide. dr. rosekind, what improvements or changes if any is nhtsa making to the early warning reporting system to respond to the findings in the i.g. report? >> so this came up in opening comments. this is an opportunity to give everybody an update. there were 17 recommendations that the inspector general identified. early warning reports. ewrs were one of them. we made an aggressive commitment to finish all of those recommendations within a one-year period. so by the end of june 2016.

and the inspector general was very clear nobody ever does, that actually give them a schedule. we have six of those closed ahead of schedule and the other 11 already identified and on schedule to finish by the end of june 2016. we've also done one other thing that nobody ever does. we've actually set up technical meetings with the i.g.'s office to tell them what our plans are to meet those recommendations. so we have an ongoing discussion with them to make sure we meet them in an appropriate closed way. >> so 11 out of 17 have been addressed ahead of schedule? >> 6. first 6 ahead of schedule. we're working on the other 11 which are on schedule. >> on schedule. >> yep. >> it sounds like you're not only a good listener, you're a good action department. so i wanted to thank you so much for doing that. ahead of schedule's great, on schedule's good. and i hope you're able to do that. not that 50ud want to opine but i hope that on this side we're as good a listener as you are. thank you, mr. chairman.

>> gentleman yields back. the chair recognizes miss schakowsky from illinois for redirect. >> thank you. just a few weeks ago the new chairman of the national automobile dealers association, or nada, said that -- or maybe it's nada. nada sounds dpsh i don't know. i don't know which it is. said we shouldn't have legislation requiring dealers to fix all recalls on cars before they can be sold because only 6% of recalls are hazardous. i have a letter that we received today from callie houck, mother of raich sxl jacqueline houck, and alexander bringman, father of jewel bringman, and it says as parents of precious, beautiful, talented daughters killed by recalled cars with lethal safety defects we are appalled that you, it's a letter directed to jeff carlson, chairman of the national automobile dealers association,

that you would claim that "only 6% of recalls are hazardous." our daughters were driving or riding in cars that were the very defects that you claim were not hazardous and therefore acceptable for your car dealer members to sell to the public without repairing the defects first. so dr. rosekind, i think it really is important to clarify this point. does nhtsa require manufacturers to recall vehicles if a defect is even not safety-related but all defects? >> we've been at this before, haven't we? >> we have. >> yes. and a defect that's an open recall needs to be fixed whether it's new, used, or rental. and we just heard the congressman say the assumption in any one of those circumstances is that there is no open recall, there is no defect. >> so do you plan to reply at all to the notion -- i mean,

first of all, is that accurate in your view, that the deaths of these girls, women, was caused by something claiming to be non-hazardous by the dealers association? >> this is one of those ongoing challenges of individuals trying to sort of split. that's why we're pretty straightforward. any open recall needs to be fixed, period. >> so are dealers prohibited, then, and should be prohibited from selling or leasing used cars until all recalls have been repaired? >> that was in the grow america act. and we believe any new, used, or rental should be free of defects. >> i hope that is really strongly communicated. i feel an obligation to the people from whom we received this letter and to the lost daughters of theirs that we make that perfectly clear. thank you. i yield back. >> the gentle lady yields back.

and that concludes questions for the first panel. dr. rosekind, thank you very much for your forbearance in staying with us today. we'll take a two-minute recess to si to set up for the second panel, at which time we'll reassemble.

♪ c-span's "washington journal" live every day with news and policy issues that impact you. and coming up friday morning, jeff adeleson, politics reporter for the "new orleans advocate" will join us by phone to discuss the debate over the removal of confederate monuments in new orleans. new orleans mayor mitch landrieu has backed the city council's efforts to remove a number of confederate monuments on public land. however, the city remains divided on the issue. and then hannah smith, senior counsel for the beckett fund for religious liberty, will be on to talk about the recently argued zubic v. burwell case. the case deals with religious liberty and the affordable care act's contraceptive mandate. sxris nove zellic, founding

member of the '90s band nirvana and author of "grunge and the government let's fix this democracy" will join us to discuss fair vote which advocates for a variety of electoral reforms. be sure to watch c-span's "washington journal" beginning live at 7:00 a.m. eastern friday morning. friday a discussion on the challenges and benefits of integrating women into military combat units. a panel of military and foreign policy experts talks about the issue at the council on foreign relations starting at 8:30 a.m. eastern on c-span 2. saturday april 23rd is the 400th anniversary of william shakespeare's death. and on that day the folger library here in washington, d.c., which has the largest collection of shakespeare documents and memorabilia in the world, will be hosting an event commemorating his life and his impact on our literature, our

language, our politics and our history. book tv will be covering that event live. it begins at noon eastern time. and afterwards we'll have a live nationwide call-in with shakespeare scholars. so you can join in the conversation as well. henry folger was the president of the standard oil company and a shakespeare buff. so he and his wife spent many years and many dollars collecting shakespeare artifacts, documents, memorabilia. it's the world's largest collection of shakespeare-related documents. so join us on saturday april 23rd. we'll be live beginning at noon from the folger library for 400 years of shakespeare on book tv. >> next a hearing on improving water supplies through new technology. the senate environment and public works committee hearing is 45 minutes.

our meeting will come to order. we apologize for being a few minutes late. we had a vote at 10:00. as i said, that's our daytime job and we have to do it. drought conditions is still -- well, they have and they still affect many regions of the country. california and oklahoma have been dramatically affected. this morning we have witnesses which represent orange county, california promising new technologies of desalination.

and the u.s. army corps of engineers. for the vast majority of the past six years, oklahoma suffered from a devastating drought event having nothing to do with global warming, i might add. as the drought reached its worst in the summer of 2014 more than 60% of oklahoma was in the u.s. drought monitor's extreme category. more than 30% of the state's land area was experiencing exceptional, and i'll put that in quotes, drought or worse category. communities were rationing water. some communities in the hardest-hit areas look to reuse voice water and tapping unconventional sources, those for non-potable used. evaporating lakes and ponds in oklahoma forced cattle men to

sell their herds and oil companies to search for increasingly expensive technology to increase production. abundant rainfall occurred nearly a year ago which caused dangerous situations throughout oklahoma but greatly improved our water supply, at least for the time being. our water supplies are also overtaxed with old and failing infrastructure not able to pace with demand. these problems affect communities all across the nation. it's not exaggerated to say that water supply issues limit growth and pose a real threat to local and regional economies and people's quality of life. however, in oklahoma communities have started planning with business groups, agricultural interests, and the energy sector on the local level to develop regional water action plans to resolve their mutual water problems. the foundation of the water action plan model demonstrates

that water as the key element in state and local economies, it focuses on unifying and forcing stakeholders to develop near, short, and long-term regional strategies to maximize reliability and diversify the supply of water. the severe drought conditions oklahoma encountered forces us to identify new sources of groundwater and further develop our existing underwater supplies to address our overreliance on surface water to build infrastructure and pipelines to reliable underused water resources. building new wells, and we've tried it all. city planning and regional planning has been the most efficient way of preparing to address any water supply problems. but there are supportive roles for state and the federal government to assist our communities, and there are roles for the corporate citizens as well.

for example, one area in oklahoma, hardest hit by the drought, is the city of enid, oklahoma. one innovative example by the coke industries is their nitrogen plant, one of the largest fertilizer production plants in north america, uses the city of enid's treated wastewater for implant cooling water. eventually this reuse project will free up almost 5 million gallons of water each day. that's almost 1/2 of enid's total current usage. the federal government can have a role to play in assisting the regional infrastructure planning among states. an example of that are the chloride control actions on the red river between oklahoma and texas. these projects were specifically authorized by congress, dating back to 1966, with chloride control studies beginning at the red river as early as 1959. chloride control actions in

oklahoma and texas has and will provide new drinking water supplies, increased irrigation and improved downstream water quality. in fact, mr. dalton and i are currently working with the tulsa district office to develop a general reevaluation and review and record a decision for the elm fork chloride plant in oklahoma. at one point some reservoirs in oklahoma were less than 20% capacity. now many are nearly full with multiple year supply. although presently the drought has subsided plans must continue so we know it's going to be coming back. it's kind of funny when you talk about this issue. for me anyway. because this was an issue in oklahoma way back when i was in the state legislature. the big issue at that time was transporting of water from eastern oklahoma and -- to western oklahoma. and dp-- it's one of these

situations that made everybody mad. this is not a new issue. it's not just local to oklahoma. it's across the nation. senator boxer. >> i really want to thank you so much for this hearing. we have some contentious hearings. i don't think this lunn will be such. because we're going to discuss innovative technologies to improve water supply. and this is something very dear to me and significant for my home state of california. and i'll tell you, i have gotten into some pretty heated conversations. i was telling the chairman, in my state because i really do support these technologies. others just turn away, say it's too expensive or you know, we shouldn't do this, there could be unlimited supplies of water for growth and all the rest. to me this is a moment in time. whether we believe climate change is causing these droughts or not. what's the difference? we don't have to fight about that. the fact is we're dealing with

these droughts. so i know this issue is deal to me as i see what has happened even though we've had an el nino this year it didn't live up to expectations. it certainly has done a lot to help us. but we know we're looking at long-term problems. we have horrible arguments between all the stakeholders, whether -- you know, between the agricultural people and the fishing industry and the urban users and the suburban users, and they fight all the way to the courthouse door. and mr. chairman, you and i know when you get to the courthouse door one thing happens. delay kufrks. we don't know the rules of the game. we need to have a water supply that is there for us. now, i'm so pleased to have denis bilodeau here from orange county water district. you've been engaged in the development and implementation of innovative water supply technologies for many years.

roger county my notes say, tell me if i'm wrong, is the sixth largest county in our nation. and we have 2.4 million people. just in orange county alone. is that about right? >> we have 2.4 million -- we have 2.4 million in our service area. there's 3.2 in total. >> 3.2 million. 2.4 in your service area. so we are literally talking about, you know, making sure people can live comfortably and have the water that they need. this has forced our governor to declare a drought state of emergency. we have water restrictions. and again, even though el nino has done better up north, it's not done that well down south. we know that we can expect more droughts in the future. so we do face many challenges associated with this ongoing drought, including overtapped aquife

aquifers, mandatory water restrictions, threats to our bay delta ecosystem, to our fisheries, to our agriculture. and when you mention water in california, it's just -- everybody just, their back goes up because there are so many arguments going on over diminishing resource. and my view as a united states senator, i don't take sides between the jobs in the fishing industry and the jobs in agriculture. they're all jobs. i don't take sides. i'm trying to get everyone to the table. and i believe, and that's why i'm so proud and my chairman shares, this that we need to look at ws to avoid these terrible battles. and that means a bigger water supply. and you know, when you get into where do you put a dam, and that starts the march to the courthouse door. but if we were to be able to move forward with desal, move forward with recycling, move forward with conservation that makes sense, we don't have to fight over these supplies. we need to work together to

expand the pool. by using our water more intelligently and making sure we can tap into these technologies. so we're very fortunate, mr. chairman, to have two excellent witnesses. we probably have three excellent witnesses. i know two of them. who will offer thoughts on how the government can help. and the orange county water district will explain how it converted waste water into 100 million gallons per day of clean safe drinking water. enough for 850,000 people. and mr. price will talk about his experiences with desal in the middle east and particularly in israel, where so much truly innovative water supply activity is occurring. so when people look at desal and they say, oh, what are you thinking? they should just talk to the folks who have been living with this technology for a very long time. and i'm also pleased that the core is here because we have such an important responsibility for managing water around the

country. the corps operates 30 dams and reservoirs just in california. the corps must employ the latest technologies to ensure these reservoirs are operating efficiently and can meet the growing water supply challenges. i think today we can look for these opportunities to invest in new technologies. we can also learn from our international partners such as israel, who has confronted the supply challenge. in closing i would say this. we have a chance in this werda bill to make some more history, mr. chairman. to take a look at this and start a new way of looking at water supply because drought faces us. it always has and it always will. it could get worse. we're not sure. but we can't take a gamble on water supply. thank you. >> you know, one thing, senator boxer, that neither one of us mentioned and that is the significance of the water in

terms of our military. it happens that right now in the audience we have bill burgess and several of them from the city of -- from forest hill, which is the city of lawton. and right next door to it altus air force base. and it's something that really is critical because the needs of those two, we've gotten to the point where they always have to shut them down from time to time. that's a huge issue also that is affected by this. we welcome you to observe. you're observing a hearing where barbara and i love each other, we don't have any disagreement. it's rare. but i hope you enjoy it. now, we'll start, we have three witnesses -- >> remember this moment. >> we have three witnesses, mr. denus -- help me pronounce this -- bilodea snuchlt. >> bilodeau. >> first vice president and director of the orange county water district as senator boxer said. mr. james dalton, we know him.

chief engineer in the arm can i corps of engineers. and david price, adviser to the middle east desalination research center. we welcome all three you have here. we'll start with you, mr. dalton and work down. try to keep your opening statements to close to five minutes. you're recognized. >> chairman inhofe and ranking member boxer and other distinguished members, thank you for the opportunity to prevent information about the u.s. army corps of engineers civil works program. activities related to drought and drought technologies. i'd like to briefly discuss drought in general terms and then provide some information we've taken with respect to drought and finally touch on drought technologies that we're investigating. drought of course is a deficiency in precipitation over an extended period, usually over weeks, months, or years, resulting in water shortage causing adverse impacts on

vegetation. but drought is a lot more complex than just a lack of water. drought is a relatively common weather-related phenomenon in north america and occurs to some extent every year in some parts of the u.s., affects our agricultural water supply and many other aspects of our well-being. the corps performs water management activities at its reservoirs consistent with the project-specific congressionally authorized purpose or purposes for each reservoir. two missions we often balance competing needs during periods of drought are flood risk management and water supply. it's important to keep in mind that most dams that occur in drought area are solely authorized for flood risk management. for instance, as senator boxer just mentioned, that the corps

orpts operates about 30 dams and 17 in california. 17 of those are mostly for single purport flood risk management. 13 have multiple purposes. generally speak the corps will not construct a project for -- solely for water supply but may include water supply as a purpose in a project constructed primarily for one or more of the three main missionaries of the corps of engineers, which are flood and storm damage risk reduction. number two, commercial navigation. and three, for aquatic ecosystem restoration. the corps's water supply authorities recognize that the states and non-federal entities have the primary responsibility in the development and management of their water supplies. water rights of course are the responsibility of the states. the corps does not own or sell water. water supply storage in a corps reservoir may be a key component of the water supply plans for

non-federal entities. and so non-federal entities that do not have storage in corps reservoirs may request that the corps study and consider reallocating existing storage from another authorized purpose to water supply. the corps reservoirs are operated according to water control manuals, which by policy include reservoir rule curves and where appropriate it includes drought contingency plans. the purpose of the drought contingency plans is to provide a basic reference for water management decisions and responses to a water shortage in a basin due to drought. the corps is working on methods and web tools to assist in understanding the projected droughts and how will this impact corps projects. the results of this work will serve as a guide for developing a strategy to update the existing drought contingency plans. the u.s. national climate assessment published in 2014

reported that climate is changing and is projected to continue to change. the expected changes vary regionally and include warming temperatures, resulting in altered precipitation patterns and increasing heat waves and changing snow patterns and droughts. two current efforts that we have under way to try and assist with our ability to manage water resources for climate preparedness and resilience. the first effort is developing and implementing methods to update our drought contingency plans to account for climate change. a second method is to enhance reservoir sediment information to assist in climate preparedness and resilience by helping to identify current and future reservoir sediment volumes which can affect food and water supply. and the third effort we have ongoing is the forecast in

foreign reservoir operations research at lake mendocino, which is a pilot study that would use atmospheric river forecasting to inform water management decisions in a manner which reflects current and forecasted conditions. the results may indicate whether this technology can be applied in actual operations of certain projects. in summary, the combinations of water control manuals and the deviations we can have with those manuals provide a great deal of flexibility to respond to short-term or long-term needs based on best available information and science consistent with each project's congressionally authorized purposes. thank you. >> thank you, mr. dalton. mr. bilodeau? >> thank you, mr. chairman, ranking member boxer and members of the committee. i am denis bilodeau and i am the first vice president of the board of directors of the orange county water district. i'm deeply honored to appear

before you today to discuss the most pressing issues of our time, a provision of a safe and reliable water supply. the orange county water district is located in fountain valley in southern california and provides ground water to orange county, including 19 cities and water agencies serving 2.4 million people. our main source of surface water continues to decline. imported water supplies from colorado are restricted.

pacific ocean. over a five-year period 20 million in federal funding from the bureau of reclamations title 16 program leveraged over 72 million in state, local and private funding to provide for the overall $481 million construction of the groundwater replenishment system and we greatly appreciate that. the gwrs has allowed our region to take control of our future.

there's no one size fits all solution. the gwrs establishes a technology foundation to design and build individual approaches to sustainable water needs. therefore i encourage the committee to include funding for water reuse in the worda reauthorization. secondly our district is currently exploring purchasing more than 50,000 acre feet per year of desalinated sea water or enough water for more than 400, people. from the proposed huntington beach project as a way to increase local water supplies. the proposed project will be built and operated in the city of huntington beach. the project is scheduled for a final hearing later this year. if approved, my board will consider moving forward a a purchase agreement for the water. finally, one of the most cost effective solutions includes water conservation.

conservation through reduced demand is not going to solve our overall need assure we have adequate water supplies. in order to supplement our water program -- a region and a core made on the santa ana river. rather than using prado dam for a single purpose, flood protection, we recognize the potential for saving water that could be put back into our aqua forfor reuse. senator, boxer, you were instrumental in assisting us in the negotiations with the army core. and we have secured feet due to your efforts. and chairman, we thank you for your effort towards the passage of the bill and we facilitate --

our recommendations to the committee arise from our experiences over the past few years working with the core to implement a long-term agreement to store water in a public safety and environmentally protected manner. clearly stated a clear statement on the priority to approve and implement water conservation activities needs to be made a part of reauthorized word up. also, we need a clear statement to insure costs are fullied a quated to make sure it's allocated to the local water agency. the ability to facilitate an equitable agreement may seem like a cost effective solution but we need a strong statement on the matter and we stand ready to support the community. again, i thank you for the opportunity to appear before you today. >> thank you very much. and mr. price.

>> chairman, ranking member boxer, i'm kevin price, senior science and technology advisor. i have the new application of nonconventional water to reduce the risks of drought, increase jobs and standards of living and to assist in resolving conflict around the world. i'll focus my remarks on desalination and indirect requotable water use. earlier in my bureau of reclamation career, during one of my trips, i was asked by a television reporter why someone from the u.s. was attending the israel desalination society meeting. i explained that the problems and solution that israel was currently solving would be

important to the u.s. as it faced similar problems in the future. i currently work for medrik. which is an international institution created in 1996 as part of the middle east peace prau process and hosted by the sultan and as well as the u.s. department of state. they work to address two grand challenges, water and peace. this is done through capacity building and training and research. there's an important technical distinction that must be made. water pureification means a number of things depending on the audience. for many, this means removing suspend particles, and very large molecules from helping them stick together followed by filtration. this will not work with many nonconventional sources because a major portion of the

contamments is dissolved, and the removal of dissolved materials is a fundamentally different process than filtration and it's a critical component in indirect and direct water reuse. no long r is it necessary to think of drinking waste water as separate entities. they are all water looking to have the desired elements removed to get it to a desired level. humidiation, dehumidification, closed circuit desalnations, forward aosmosis and a whole bunch of other technologies people continue to develop. israel's water supplies have been limited from its creation. they've had to learn how to conserve through public education, reducing water losses and appropriate pricing.

because the need was so immediate, a new membrane technology, which was invented and commercialized in the u.s. would work and decided to move forward without perfect information. they had good knowledge from the experience of others and their own research on how to manage the environmental effects, such as reducing chemical edition. reducing impitchment of intakes. in discussing this with odet fixler, the deputy director general of the israel water authority, he said technology is only technology that already works. the broader work is the cost of water, which crops and who will subsidize. by developing are salination as part of their water resources, they were able to develop an industry that can compete

internationally. the differences between california and israel. california is much larger than jael. israel has a population of round 8,000,000 in 8,000,000 square miles. and california is 39,000,000 and 164,000 square miles. some of the lessons i learned with my colleagues. invasion should follow a progression related to risk taking and project size. consistent funding is imperative to have strong initial reviews combined with ability to accept risk when studying the unknown. a strong technology transfer

must exist to pull invasions into the laboratory for use. it provides the opportunity to involve all parties at an early stage. more detail can be found in my written statement and i'd be pleased to answer any questions at this time. sgl thank you all three very much. let me state that in california, the goal is to reduce the natural chlorides in the red river. multiple studies dating back many, many years and designs have been completed, many about the core of engineer. we're talking 1978 was one of -- yet a single project hasn't been constructed in area 6. now, my question would be to you, mr. dalton of all these

designs, full federal experience have been completed over the last five decades and why is the core asking for yet another study for the project to determine feesability of building projects to reduce the chlorides in the red river? >> mr. chairman, that study that we're looking at now for area six, which started outads you mentioned looking at the opening remarks. i think it was around 2005 or so that we looked at it and started recognizing the study. at the time we ran out of money to do that and since that time

we've been looking and talking with the state, the county for a nonfederal partner to coshare in that. >> there have actually been studies. they completed studies. we're talking about a period of over 40 years. how do i go back to oklahoma and ask them to spend more money on a new feesability study. not a shovel has been in the ground yet. did you listen to mr. price's testimony? is this something, mr. price that technology is moving in desalination right now and there are krar areas i refer to in southwest oklahoma that might be able to benefit from these? >> yes, chlorides can be removed through desalination. >> if it's as simple as that, is

it a matter of cost then is this. >> it's a mat of cost. in the past 30 years, it's had a dramatic improvement. >> is anything going on right now that we may be over looking in oklahoma? >> i could discuss it with the core of engineer. >> have you kept up with all the technology, mr. dalton? >> i'm not familiar with exactly what chloride removal we're look at for this particular projict. it's something we looked at as part of our other prajects, i believe. what i would like to respond to members of chairman is that we don't know how much is requeered to complete the study, how much more work is required. as far as talking to the nonfederal sponsor or citizens

about why they should co chair, we plan on taking advantage of the work that's already been done. there's been a number of ports of that study that have been completed. and what we need to do now is take a look at what has been done and determine what needs to be done so we can provide you with the work that we think is remaining and the cost and schedule to do that. >> that would be helpful. and i remind you and everyone else here that next week senator boxer and i planned to start the markup and so we need this stuff now. i want to make sure that anything that can be done and these are the kind of projects we're dealing with in this bill. so, we want to stay on top of this thing and i'd like to be sure and i'm sure that the core has a lot of research and all that. but make sure that there isn't

something looming throughout that would help us resolve this problem. because right now we're getting into the word of bill. and our intengsz is to not let these things side. i think we're on schedule. but this is the type of thing that we are wanting to do. senator boxer. >> that is music to my ears and i hope we can avoid on either side any kind of poison pill amendments that don't belong there and i think we've shown we can do that. so, do you view desalas a potential component as a co comprehensive water supply? do you think it shd ould be a component? is cost a concern? could federal water infrastructure loan programs have helped address some of these cost issues.

senator boxer, the answer is yes to all those questions. we're looking very closely at having that part of our portfolio of sources and we have the santa ana river, which is our free source and the ground water replenishment system and desalination would be the third leg to the stool. >> it's the most expensive of the sources. but federal loan programs could certainly help with the cost of that. we're fortunate in that there are invasions taking place with brem brainal technology and looking forward to break throughs. >> can you explain to us in short what that means in terms of technology. >> you're pulling the water molecules across the membrane and i believe lockede martin is

developing a -- we want to push that forward and hopefully drop down the cost of that water. the water we produce and our ground water replenishment system, the nonsubsidized cost is about $850 an acre foot. whereas the cost of desalinated water is about $1200 an acre foot. so, it's about 50% more expensive. >> and i would just note and i think my colleague agrees. everybody needs clean water. so, when you're faced with a situation where maybe you have a water emergency, if the cost diminishes because we need it. it's not like we can -- it's the staff of life in so many ways. so, what we're trying to do is

work with my colleague to get a lot of my water 21 legislature in this and so far it's been great. and we want to reenact required development of drought resilient guide lines to help communities deal with drought. that would be helpful. i hope we could support new grant grants for innovative technology and change or modify the program to better support innovative technologies. those four things, would you agree, would be a good start for us? >> absolutely. one of the bigger challenges we have is the distribution of the water. this will be a new plant at huntington beach.

and the distribution system alone e -- a loan program would be a tremendous help to us. >> and the chairman and i worked together to get tifia which would allow you to pretty much get interest free loans -- would that be helpful as well? >> interest free, yes. we certainly could use that. >> it's extremely low interest because it's set bases on the chance that you might default spoep, it's very low and orange county has proven to have some trouble. you did a worst situation after the market crashed. how well i remember that and how hard that was. so, let me turn to mr. price. do you think the u.s. should have a greater roll in water supplied technology because you discuss the historic role of the u.s. government in developing

desalination and other treatment technologies but say we're not parpisitating in new research as mufrp as we were. >> that is correct. and one of the wayed i invest gated that was to get oo feel for how the number of scientific publications have changed for probably the last 30 or 40 years. and basically sophia was a pioneer and now 30 years, it's an order times 10 times the less in terms of public patience than in the past and i think that's probably due to the federal funding more than anything else. >> well, thank you. i don't have any other questions for the panel. i just want to say again this is

an area where i think the work of this committee could really spafrm an entire new effort to recountal the new decknologies. i just think a little park from this committee could drive chav and allev yad wup of the billest prop hadded that we made a a naegd. and i know wk oklahoma, wh you think back in history, the problems and california over the years with drought. and this is like buying a really good insurance policy and while we're doing it, become a leader in the world in these technologies. so, i'm excited to work with you mr. chairman and i think the committee can really light a fire under this desaland and

repsycholiresie recyclin recycling. >> i know there's a simple answer to this. mr. price, you have barbara and me, the big ocean there out there and we have the little red river. is your restefrp 92 tegnology would equally apply to both or focus on one area tats arer a more advanced looming technology or is it the same? >> the toeknologies remain the same but it's a lot less expensive because it takes less energy to remove the dissolved spots. >> we will submit a question for the record to get more details on how to make chloride control construction a reality in area six we're so concerned about.

well, anyway, the timing's right. we're get nothing to our bill and that's what this is all about and it's been a problem in my quit for a long time. so, i think any other comments that any member of the panel might like the share with us on this committee. we have steph from all the tloefs committee and they're very interested in this issue. all right, in that case, we are acern journed and thank you very much for your coming. >> thank you very much, everybody.

friday, we bring you more from the republican international committee live from florida. it begins 10:30 eastern on c-span 2. >> kyle cheney of politico has been following today's rnc rules in california. thank you for being with us. >> great to be here. thanks for having me. >> nothing changed today. why? >> well, there's been a lot of pressure and scrutiny on the prart of the process that is usually very much ignored by campaigns because it's such a pro form of exercise in thoes years. this year the rules could play a big part in how you're alive. there's been a lot of worry thought the they make too many

changes, thal they decided to let the whole thing go, pretty much. >> as you and your colleagues have been reporting over the last couple of days, there's been an all out inturnl struggle and all of this trying to be tamped down by chairman and he obviously succeeded today. what was happening? >> so, essentially there's a push by some members of the rnc to change the actual rule book and get red of the convention as it's currently been run and typically the speaker of the house chaired it and to use robert's rules, they made it much more driven by the delegates themselves. they're more trance paernt. it would reorient how the convention was run. so, that's where the struggle

has arisen from is entertaining of not understanding. and now he's cosh these rule changes. >> and about a hamp a dozen members about changing any of these rules. how much pressure is on? >> i think that pressure is there. it's more of an existential one. i don't think he's saying if you don't change this, it's going to be a problem. they're aware of the skrautany and perception that there could be this rigging of the system. and the delegates themselves will actually write and change any rules they want to.

the rnc is only making recommendations? >> this is basically punt uddown the read and it will include if the delegates from the republican nathal committee. >> what puaengsally could we expect snooa lot rfrs going to depe depend on who the delegates are. ted cruz has had a lot of success. so, you can suspect the rules might reflect changes they want to see, as opposed to anything the rnc might choose, like insuring that only ted cruz and donald trump are able to seek the nomination. figuring out wads toop limed outside contenders or pressure. >> how much pressure is the chairman under? >> an enrms amount of pressure. you know, a lot of izcrawl

teelgs are tiling fim a ton of credit. and he had to build up this massive data operation and ground game for the eventually nominee, and donald trump, despite all the hostility between them. so, it's a ditch klt puzishz. maybe the thoes difficult in holly wad today. not much happened today. all eyes on cleveland. kyle cheney of politico who is following all of this. his work available online at politico.com. thank you for being with us. >> glad to be here. thank you.

my recommendation is that we focus very much on trying to understand suicide and trying to prevent suicide. so that these things don't erupt into a terrible tragedy. >> on sunday afternoon at 1:30 eastern, book tv will air back to back programs of this year's

pulitzer prize winners. and this year's history recipient recalls general custer in "custer's trials." go to book tv.org for the complete weekend schedule. >> next, seniors secured foilshs on what they were doing to protect investors by maintaining fair market. she testifies on capital markets. it's two hour and 30 minutes. morning everyone.

>> good morning. >> our team is here. going the field alone over here. so, subcommittee on capital markets will be here on call to order. today's hearing is entitled continues oversight of the fc's offices and division divisions. without ubjekz, members of the financial service committee who are not members of this subcommittee may in fact participate in today's hearings. so, today's subcommittee will continue its efforts of vigorous oversight of the fcc and the individual offices that makeup the fcc. we've heard training from

directors of investment management divisions that fcc. they've allowed us to take a more thorough look, enforcement practices so that we can better understand whether the fcc is appropriately carrying out its three-fold mission to maintain fair and orderly markets and last but certainly not least facilitate capital fornlatimati. i look forward to testimony and hope between the four of you here on the panel that we are able to cover a lot of ground in the time we have. if you go back in the year 2000, the fcc's operating budget was about $369 million. today, it's a little over $1.6 billion. the fcc has recently submitted

requests for the budget coming up of $1.8 billion. so, during much of the time when congress has been accused of starving congress, its budget has actually quadrupled and done so in a little less than a dozen years. and funding co insided with an agency that has become four times more effective. instead we're likely to see this time as the fcc was ill prepared for the financial crisis of 2008. and when it failed to properly incorporate economic analysis into its rule making and often times been complicit in advancing the priorities of special interests. so, instead of asking some of the fundamental issues, the daud frank act has created more offices within agencies.

two of which are here with us today. and what the fcc has made strides towards improving the economic analysis, there's still much more work to be done. it's not acceptable to say congress made be do it. raise your rule last year and it's up to the fcc to clearly articulate a problem which the rules are intended to possespos which is obvious. so, i'm eager to hear about the depths the fcc is taking to improve its economic analysis and continue over credit

agencies. broad agreements that certain provisions under dod frank such as regulations were much needed and addressed one of the causes of financial crisis. and i worry that many of the micromanaging rules have had the effect of further stifling in the credit agency. i'll yield to the ranking member for five minutes. >> good morning and thank you so much, mr. chairman for holding this important meeting and all our participants today, this meeting will continue, a series of oversight meetings in the fcc. the office of compliance, inspections&examinations, the office of whistleblower and the division of economic risk and analysis. all four of these offices play a critical role in policing our

nation's securities markets. the office of credit ratings over sees, moodies, f & c and fit. and it revealed the catastrophic effects when they all get their ratings wrong. and dod frank created credit ratings, is to insure that inappropriate conflict of interest at the rating agencies do not influence the ratings if the firm's assigned to different securities. the office thoof the whistleblo was also created by dod frank and intended to help whistle blowers to come forward with timely information about wrong

doing. and for tips saving over a million dollars, it incent vises employees to blow the whistle before they get too large and too devastating. in fact, in 2015, the office received over 4,000 tips from whistle blowers. the division of economic risk and analysis is the data arm of the fcc. it supports all of the other it visions by conducting cost benefit ainalsis, of potential rule makings. and even calculating the inappropriate punishment -- or rather the appropriate p punishment for bad actors.

and finally ocie is one of the largest and most underfunded. offices in the fcc, it has over 1,000 employees who examine registered investment advisors, broker dealers, exchanges, mutual funds and mutual advisors. this sounds like a lot of examiners but it pales in comparison to the number of market participants. over 12,000 investment advisors, 11,000 mutual funds, 800 municipal advisors and 18 securities exchanges. as a result the commission is only able to examine about 10% of alltment advisors have

never been examined. and in 2015, a whopping 77% of the commissions examinations identified deficiencies at investment investmented a visors. and 11% were referals. and that means of the 5,000 investment advisors who have never been examined, a little over foyer,000 have deficiencies that have not been uncovered. this is a scary thought for investered who relyong thesed a add visors to manage their savings. i look fortwoord your team. thank you for your work. thank you. >> thank you very much. the gentleman from virginia, the

vice chairman of the committee for two mines. >> thank you, mr. chairman. irupt virginia's fifth district. i regularly hear from my c constinchent withes. and it makes it more difficult for our main street and small businesses to access capital and be successful. while they've been olaser focussed on easing the access to capital and builden the bipartisan success and then we're leading over executive branch agencieagencies. i do am concerned that the fcc often dev yates its three-part missions too, protect investors and to facilitate capital

formation. >> this allows congress to rick go over fulfilling its three-part mission. look forward to the testimony of our witnesses and thank the chairman for returning this. >> great, so the gentleman yields back and welcome to matters of the panel before us. your full statement will be part of the rukered. in front of you you'll be recognized for five minutes and in frupt of you are the lights which are green, yellow, red. yellow light should come on when you had one minute remaining. so, we ask you have to begin to light up and that's our cue. and with that mr. butler, you are ruk ugunderets for five plints.

thank you for inviting me to testify regarding the office of credit records. it protect investors, maintain fair and orderly markets and facilitate capital formation. it does this by over seeing credit agencies that have been nationally recognized. in 2006, the credit agency gave congress authority to implement a perier myriad of rules. and then the office of credit ratings dedicated to the oversight of rose. and first, examinations, next nrso monitoring and third, policy and rule making.

those questions arose for commission rules accounts for the majority of the office activities. the scope of the annual examinations cover s 8 required review areas. and they're risk' bested approach this improved the eficialancy and they're priortiesed and focussed on higher risk. the office conducts sweeps to address credit market ixus and concerns. the nrso has been -- many have implemented fundmental changes. adding staff to tum plients and over spite stooit sungs pm and

inhnsing disclosure, transz parents and governorance.rehens of requirements. all of which became effective by june 2015. as required by the dod frank act, office sums are rises the findings. the nrso monitoring gather, analyze and aseds dadau and identify trends across the agency. and they have period. importantly --

information obtain booded b monitoring group for guiding any future rule makings. the rule making group within the office is responsible for conducting studies, drafting reports and including those required by the credit rating agency reform act and the dod frank act. new rules adopted by the commission address among other things reporting on internal controls, conflicts of interest, include an absolute prohibition. procedures to protect the rating methodologies. and standards of training, experience and competence were

cretted to analysts. rules also survive as to the effectiveness of internal controls. but no part of the credit rating was influntszed by any other business-activity. while the commission has broad authority to address all books and records and to impose sanctions for violating statutory provisions, the commission is not permitted to regulate the substance of credit ratings and methodologies used to determine credit ratings. thank you for having me. >> welcome to the panel and you are recognized for five minutes. make sure you always push your button on and off. thanks. >> thank you. good morning chairman gared and members of the subcommittee,

it'ser my pleasure to talk to him about the recent faevs of isk analysis. dear supports the commissions's through data driven high quality economic analysis. we have grown from approximately 96 employees in 2013 to a projected work force of 175 by the end of the fiscal year. by that time we anticipate employing 88 ph.d.s and we even have two ph.d. physicists. they'll be supported by 22 research associates by the ownedf towneend of the year and an diverse staff of technical experts. the depth in exper seeds has allowed him tox pand his supported. our most well known function and

you examine, analyze the potential economic effects of the proposed and final rules and evaluate public comments on those rules. we provide theoretical and data driven changes to policies. we look closely at staff, from the earliest stages to the final development. in the course of assisting can other divisions and offices. white papers and other domuments with specific policy issues or rule mageings. last year they produced white papers for open ended mutual funds operation. there's volunteer clearing activity. and another paper on the market

for unregistered security offerings. in asepsh to research with your rules. do they regularly post those and they're posted on the dearau web page to rovide people access to our current research on financial ma financial markets. >> and we provide financial and risk modeling expertise to other divisions and offices. our data analysis helps sec staff with scoping including providing guidance on which intutees to exam. and what to look forbp one is urtool developed in close collaboration with ob staff. it identifies anonilous behavior

and might indelude risk, work force or structure. >> we also had a risk assessment tool. developed in the convention of something elts. it allows the attorneys that hopes them to assess my financial reporting irregators. and they provided expert assist since in over 200 ma h00 matter. they calculated ill gotten gains and evaluate economic bast claps pch he prepare to creage or critique the challenge. and in recent instances, they

have actually testified on behalf of the commission. >> none of this work can be done without high quality data. the oversight fallinize to two deskring and unrelated categories. vera supports the data usage by designing validation rules, data desimination tools to assimulate high quality data. we routinely gen rate statistics given to staff. and i believe deer staff are delivering high quality

ainalicize and we loortk forwar to the futurer. >> thank you. >> good morning and welcome to the panel. >> morning, chairman garret, ranking member maloney and members of the subcommittee. thank you for having me testify regarding the pebltsis sof the pleeler. it's a separate office with five legal assistants and an administrative assistant. all of whom are taszed to the whistle blow program. it was dejiened to provide the commission and the specific testimony toly credible information. enhancing the community's unlt to help those from horm. and anybodies who voluntarily

provietd the n. asz that results in monetary sanctions exeding $1 million. may receive a portion' we continue to receive a significant number of award claims, including over 120 in fiscal year 2015 alone. as of the year of the year, preliminary detep ethe kmeg commission -- against individuals and companies totalling over $400 million in

sanctions. ordered to by paid to investors. the amounts ordered to be returned to harmed investors have not been effected in any way. thanks in prart to the positive astrangd of the show squch the nop of reports have increased each year. 30% increase over the number received in fiscal year 2012. since the program's inception, we haveeceived more than 16,000 tips in every state of the country, including the district of columbia and fum 95 countries in the u.s. ourall saufs was helping to insure that the clothes come pak. without fear of retal yath. in 20 sfraen, they praut their

fir -- sending a strong message that it's unacceptable. we have expressed the view that it extends tothose that report internally, regardless of whether they separately reported the information to the commission. we continue to assist to present a comp ens from possible wrong doing in the commission. and he brought his first action against cris msh frees. rule f 17-a limits any action to impede an individual about reporting a possible violation

from the collection. and report securities violations continue to be our top priorss. you have demonstrated that we can and whil take action who retaliate again or interfere idea with the ability. it was information that leads to successful enforcement actions. give an strong track record. we expect to continue to receive high quality tips to halt fraud earlier and more efficiently. we fully effect it will be a game changer to protect investors and insure the efficiency of the market place. thank you again for the invuivation. >> finally, last but not least, mr. watt, you have five minutes. >> members of the subcommittee, thank you for the opportunity to

discuss my house. oc, through our national examination progreez advances the mission through things that inform quality. with the staff of over 1,000 employ es oop she has registration responsibility. 11,000 mutual funds and atfs. more than 400 transfer agents. over 650 registered municipaled a visors. and you have 18 national securities exskmeempss. then the pcaob. recent legislative changes such as the dod frank act and jobs acts have expanded the responsibility to include swap market participants, including

dealers, repositories and execution facilities. as well as cried fouthing portals. we continue to see the complexity of market participants. in order to maximize our use, we're in the process of increasing coverage to advisors. to meet the challenge imposed, we've adopted a risk-based frame work for examinations' and we prow mote wcompliant through transparency. we have debusiness practices or activities which may harm investors. we external or emd ternl data sources. >> this if ainse allowing areas

reviewed in a past -- we increased our use of data analytics to further refine our risk-based program. and oc developed a new tool, need. that enabled examiners to lan lace a yare's worth of trading datau. our and there are techniques that areas of mun alaundering and high frequency training. they will further enhance and expand our capabilities to monitor fraud and mrisk. through this process we provide restaurants the opportunity to

self assess and meet the noncompliant behavior on their own. for instngs, we have to inform the area the staff believes went to frisk. as out loind in our resant priorities. we are -- in 2015, they launched the retire initiative. focusing on breekerred dealers and the services they offer to investered with retirement accounts. retailer investors are charge would a complex and evaurvling set of risk factors when making critical decisions. another priority is cyber security. over the last two years we have conducted examination to assess cyber security preparedness among brokered dealers and inhad vestment advisors. as another example, prior to

initianisinitiating these exams published a summary of our observations. and we're continuing to conduct cyber administrations. the final priority i will mention is lickidity. oc's examining advisors to mutual funds, etfs and private funds. these examinations include a various controls. trading activity and eval yaugds policies. thank you for testifying today and i will be happy to answer any questions. >> thank you for your testimony, thank you for members of the panel. i'll begin over here. so, one of areas there was

bipartisan support was regard to removal of references to credit rating agencies 939 a. and chairman frnk at the time had the chaps to get include said. and remove rest runts in our throughout. and the purpose of putting that into dod frank was to say that investment decisions should not be what they had been prior to that. simply relying on credit reting agencies. and we've seen that some tension funds are still including them. some are still specifically including the names of two of the large agencies in our their investmentide hines.

and in 30 seconds can you say as far as the contention. >> you speak with are eguards to federal statues and the, the cc hasn't worked. and the offices and divisions completed the work there. p so, all impages have been removed by federal statute. i recognize there are certain pension funds suing to the larger credit rating agency saying their opinions in the past were piledly invanurate but they're still using them for their increstment guide lines. which seems counterintuitive. >> i'm aware that there are pension funds that recall credit raethz, by name or by reference

to the big three. >> and is that a problem? >> i wouldn't character ice it as a problem. i would say we weren't able to do more is there something more that should be done. is it can be or should be directed to? >> it was not in the ambet of the credit ratings overseas. that was the division of investment man. ment. >> with revard to the credit ratings, we're comfortable. >> i got that. >> with regards to the credit ratings, we're comfortable with the authority we have, beyond that i wouldn't want to compliment. >> mr. flanry, when it comes to certain issues, regulations be.

economic pen if the asnsicize is corrected boo ithe ansancy, correct. >> yes. >> when you tame to the issue of the pay rule, that was done. >> yes. >> and in that analysis, is it true that they couldn't benefit? >> yes, i think that's right. ultimately the justification was tied to informing investors about the possible as visibility of their stay on pay votes. >> but at the thoechd day, they could not quantify and a lot of what we do is very difficult to quantify. and so in the decision making proces process, why was this one done?

when you could have quantified? >> deer respond to the rules as they come up, we try to explain and clarify to them what the economic facets of the decision are and then they are free to weigh those benefits and costs against the other considerations. >> is it fair to say this was done bah of a man date as opposed to the scc? >> yes, sir. >> and it's a shell situation as opposed to a may situation. and within a whole gambit of things the scc could be working on, there were other areas you could quantify a benefit, correct? >> we'll probably do more quantification in that case, yes. >> so is there a reason you see areas you can and they go ahead and do so? >> we are, in many ways, a

reactive division in a sense that we're asked to weigh in on a rule to be considered. >> make recommendations at the end of your report? >> about the order of consideration? >> yes. >> no, i don't. >> of course, my time is already up. lady from new york, you're up. >> mr. flanry, i'm a big fan of structured data, especially the use of xbrl. it certainly makes it easier for investors to locate good investments, diamonds in the rough and easier for start ups and new businesses to let investors know that even when you' and you deskicribed as a hub. and can you explain why

structured data is useful for the investor and to the sec and exactly where does the implementation stand now with the scc? >> yes. we have an office of structured disclosure inside of dera and the purpose is to advise where and what and how data should be structured. so, when there's a new rule, these books eval ute what can bead captured. and a good example of what that does for us is we now publish on our website quarterly financial --