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96–194 PDF 2004

S. HRG. 108–640

THE ADMINISTRATION’S PROPOSAL FOR

REAUTHORIZATION OF THE FEDERAL

PUBLIC TRANSPORTATION PROGRAM

HEARING

BEFORE THE

COMMITTEE ON

BANKING, HOUSING, AND URBAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

ON

THE REAUTHORIZATION OF THE PUBLIC TRANSPORTATION TITLE OF

THE TRANSPORTATION EQUITY ACT FOR THE 21ST CENTURY (TEA–21)

WHICH EXPIRES ON SEPTEMBER 30, 2003

JUNE 10, 2003

Printed for the use of the Committee on Banking, Housing, and Urban Affairs

(

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

RICHARD C. SHELBY, Alabama, Chairman

ROBERT F. BENNETT, Utah

WAYNE ALLARD, Colorado

MICHAEL B. ENZI, Wyoming

CHUCK HAGEL, Nebraska

RICK SANTORUM, Pennsylvania

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

JOHN E. SUNUNU, New Hampshire

ELIZABETH DOLE, North Carolina

LINCOLN D. CHAFEE, Rhode Island

PAUL S. SARBANES, Maryland

CHRISTOPHER J. DODD, Connecticut

TIM JOHNSON, South Dakota

JACK REED, Rhode Island

CHARLES E. SCHUMER, New York

EVAN BAYH, Indiana

ZELL MILLER, Georgia

THOMAS R. CARPER, Delaware

DEBBIE STABENOW, Michigan

JON S. CORZINE, New Jersey

KATHLEEN L. CASEY, Staff Director and Counsel

STEVEN B. HARRIS, Democratic Staff Director and Chief Counsel

SHERRY LITTLE, Legislative Assistant

RICHARD STEINMANN, FTA Detailee

SARAH A. KLINE, Democratic Counsel

AARON D. KLEIN, Democratic Economist

JOSEPH R. KOLINSKI, Chief Clerk and Computer Systems Administrator

GEORGE E. WHITTLE, Editor

(II)

(III)

CONTENTS

TUESDAY, JUNE 10, 2003

Page

Opening statement of Chairman Shelby ................................................................ 1

Opening statements, comments, or prepared statements of:

Senator Johnson ............................................................................................... 3

Senator Enzi ..................................................................................................... 4

Senator Corzine ................................................................................................ 5

Prepared statement ................................................................................... 38

Senator Bunning ............................................................................................... 6

Senator Stabenow ............................................................................................. 7

Prepared statement ................................................................................... 38

Senator Miller ................................................................................................... 9

Prepared statement ................................................................................... 39

Senator Santorum ............................................................................................ 9

Prepared statement ................................................................................... 40

Senator Reed ..................................................................................................... 10

Prepared statement ................................................................................... 40

Senator Sarbanes .............................................................................................. 11

Senator Carper ................................................................................................. 13

Senator Bennett ................................................................................................ 26

WITNESSES

Norman Y. Mineta, Secretary, U.S. Department of Transportation Accompanied by Jennifer L. Dorn, Administrator, Federal Transit Administration,

U.S. Department of Transportation .................................................................... 15

Prepared statement .......................................................................................... 41

Response to written questions of:

Senator Reed .............................................................................................. 72

Senator Sarbanes ...................................................................................... 75

Senator Dole .............................................................................................. 77

William Millar, President, American Public Transportation Association ........... 29

Prepared statement .......................................................................................... 48

Response to written questions of:

Senator Shelby ........................................................................................... 79

Senator Reed .............................................................................................. 82

Senator Sarbanes ...................................................................................... 84

Jeff Morales, Director, California Department of Transportation, on behalf

of The American Association of State Highway and Transportation Officials 31

Prepared statement .......................................................................................... 52

Response to written questions of:

Senator Shelby ........................................................................................... 86

Senator Reed .............................................................................................. 88

Senator Sarbanes ...................................................................................... 89

Robert Molofsky, General Counsel, Amalgamated Transit Union ...................... 33

Prepared statement .......................................................................................... 54

Response to written questions of:

Senator Shelby ........................................................................................... 89

Senator Reed .............................................................................................. 95

Senator Sarbanes ...................................................................................... 96

Tab No.

IV

Harry W. (Woody) Blunt, Jr., President, Concord Coach Lines, Concord, New

Hampshire on behalf of the American Bus Association .................................... 35

Prepared statement .......................................................................................... 64

Jim Seal, Former Consultant, Federal Transit Administration .......................... 36

Prepared statement .......................................................................................... 68

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

The Benefits of TEA–21 Funding Guarantees by the Jeffrey A. Parker, December 2002 .......................................................................................................... 101

(1)

THE ADMINISTRATION’S PROPOSAL FOR

REAUTHORIZATION OF THE FEDERAL

PUBLIC TRANSPORTATION PROGRAM

TUESDAY, JUNE 10, 2003

U.S. SENATE,

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,

Washington, DC.

The Committee met at 10:01 a.m., in room SD–538 of the Dirksen Senate Office Building, Senator Richard C. Shelby (Chairman

of the Committee) presiding.

OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

Chairman SHELBY. The hearing will come to order.

I am pleased this morning to welcome Transportation Secretary

Norman Mineta. Mr. Secretary, it is always good to be with you.

I am very glad you could come and be with us today. I appreciate

that you and other panelists took the time to come before the

Committee.

I asked Secretary Mineta to share the details of SAFETEA, the

Administration’s proposal to reauthorize the surface transportation

program. Obviously, this Committee is most interested in the transit title of the bill. TEA–21 expires on September 30 of this year,

and I have made transit reauthorization a high-priority item for

the Committee’s consideration. This is the second hearing, Mr. Secretary, we have had on transit at the Full Committee level, but it

won’t be the last.

We had the benefit of hearing from Federal Transit Administrator Ms. Dorn, who is with us today, on March 13, when the

Committee invited her to come discuss the details of the 2004

budget proposal for FTA. Embedded in the budget were many of

the Administration’s ideas for reauthorization, so the Committee

got an early opportunity to digest many of the central components

of the proposal. When the SAFETEA proposal was formally conveyed to the Congress in late May, months later than it was expected—but better late than never, as we say—we were already

armed with some advance information about its content.

As such, we have had the opportunity not only to learn some of

the details of the proposal, but we also have had the chance to

react to them as well. Many of you have already heard that the

Ranking Member and I are opposed to reducing the Federal match

for New Start projects from 80 percent to 50 percent while maintaining the 80 percent Federal share for highway projects. I believe

that would be a mistake and would create an imbalance between

2

the two modes. I think our goal should be to remain mode-neutral

and allow communities to make decisions about what best suits

their needs and maintain a level playing field.

I am most concerned, however, about the idea of eliminating the

Bus Program. To many people, bus service is the lifeblood of the

transit system. In the majority of communities, bus grants are an

invaluable resource and buses the sole mode of public transportation. Eliminating the program would be detrimental to mid-sized

communities who need lump sums to make bus purchases and

build bus facilities.

Another item I want to mention is the overall inadequacy of the

total funding level. This is an argument that I anticipate that you

will hear several Members of the Committee comment on. Mr. Secretary, you may be aware that the Senate passed an amendment

to the budget that would increase the overall number for highways

and transit. That amendment, which was passed with the support

of 79 of my colleagues, bumped up the number for transit to $56.5

billion. Certainly that vote is reflective of the growing demand and

need out there for more resources. Unfortunately, the $46 billion

proposed in SAFETEA doesn’t address the concern. The level proposed by the President is a current services budget and, I think,

it is insufficient. Mr. Secretary, that gives you a thumbnail sketch

of what about the proposal concerns me and others, so let me now

move to tell you what I do like about your bill.

I am pleased that rural transit is finally garnering the attention

it deserves. I have seen value in fostering rural connectivity in

communities all over the country. Currently, 40 percent of rural

counties offer no transit service at all, and increasing the opportunities to provide essential bus service in rural America I think is

a very positive step.

I also like the idea, Mr. Secretary, of expanded eligibility for bus

rapid transit in the New Starts category. We need to have discussions about how exactly this would work in practical application,

but I am favorable here. I think this is a good proposal. The Committee will be holding a hearing on just this issue on June 24. As

it is an emerging technology that was not a viable option during

the time of the TEA–21’s writing, I think it is especially important

that we look at it and look at it closely.

I am pleased that you have put a focus on fostering coordination

between the providers of social service transportation. This is an

area long disregarded, and I think your proposal responds to a

need, first identified by the GAO, to make human service coordination of transportation services a priority.

There are several other areas I think represent progress and others where the basic idea was sound but the details may require

some tweaking. I am intrigued by the idea of performance incentives for ridership increases. And I want to learn more about how

you envision that working.

I would like to make sure that there is an equal focus on building efficiencies, both in capital investments as well as operational

expenses. Transit agencies should be held accountable for their cost

and ridership projections for New Starts projects and, certainly,

transit agencies should be making the utmost effort to identify

areas in need of reform that drive up the daily cost of doing busiVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\DOCS\96194.TXT BANK1 PsN: BANK1
3

ness. Addressing both of these items will be useful in ensuring that

transit resources are carefully spent and are spent for the benefit

of those to which it is intended—the riders of public transportation.

With that, Mr. Secretary, we will see if there are any more opening statements. Senator Johnson.

STATEMENT OF SENATOR TIM JOHNSON

Senator JOHNSON. Thank you very much, Mr. Chairman. I appreciate you holding today’s hearing to consider how to improve our

transit programs.

Welcome to Secretary Mineta, Ms. Dorn. Secretary Mineta is a

long-time friend and a former colleague of mine in the golden days

of the House of Representatives.

Secretary MINETA. We all are.

Chairman SHELBY. All of us have served in the House. We are

all colleagues.

Senator JOHNSON. That is true. I am very appreciative of his continued public service to our country.

As we work to develop a bill on transit funding, I want to work

with the Committee to address the particular needs of rural States

such as my own, South Dakota. I appreciate that when people

think of transit, they largely think of urban areas, and properly so.

I have been a long-time supporter of Amtrak and light-rail development, and I recognize the transit needs of our urban areas. My title

is U.S. Senator, not South Dakota Senator.

But at the same time, in the past rural areas have not received

all the attention that they deserve. Many of my fellow South Dakotans rely heavily on transit. We have very low-density areas in our

State, and yet they need adequate transit service, particularly for

senior citizens and disabled. My State, with an increasingly elderly

population, is home to a significant transit-dependent population.

Although the transit program should always have considerable emphasis on large urban areas, current transit formulas frankly do

not adequately meet the needs of rural States such as mine.

Mr. Chairman, I want to address the needs of my State as part

of a plan that is good for the country as a whole, and I want to

help the Banking Committee grow the program. Unfortunately, in

my view, the Administration’s SAFETEA program does not grow

the program, and I share the concerns of many over the Administration’s plan to reduce the Federal match for New Starts. I believe

that rural transit does not receive a sufficient Federal match, and

I certainly intend to work with my urban friends on the match

issue for all of us.

I want to make a few more points on rural transit. First, it is

not enough to just increase funding for the rural program. The current rural formula just doesn’t get enough money to States that

need it most. We need a per-State minimum in some categories.

Mr. Chairman, to do this will not cost very much. It is also important to remember that none of the New Start money goes to South

Dakota.

Mr. Chairman, South Dakota does participate, most years, in the

Discretionary Bus Program that you have alluded to, and I share

your discomfort with the elimination of that program. To illustrate

my point, South Dakota’s share of discretionary bus funding last

4

year was greater than the additional funding that the

Administration would send to my State each year through increases in the Rural Transit Program.

In conclusion, last year I cosponsored S. 2884, which provided a

reasonable floor per State under the funding level for the Rural

Program, for the Elderly and Disabled Program, and for small

metro areas. And I was pleased that Senators Allard, Crapo, Hagel,

and my friend Mike Enzi are Members of this Committee who also

cosponsored that measure. That bill also clarified the ability to use

Elderly and Disabled Program funds for operating assistance and

would increase the Federal match for operating costs in the Rural

Program.

Western States do not have transit match parity with highways

as the highway match in Western States is over 80/20 due to the

Federal lands adjustment in the Highway Program. This adjustment should also apply to the Transit Program, at least for the

Rural Program, the Elderly and Disabled Program, and small

metro areas such as Sioux Falls or Rapid City.

I want to work with the Chairman and Ranking Member to

strengthen public transportation as a whole, and I believe that the

key concepts that others have joined me in advancing last year

should and can be accommodated in our work this year.

Thank you, Mr. Chairman. Thank you, Mr. Secretary, and I look

forward to hearing from our panelists today.

Chairman SHELBY. Senator Enzi.

STATEMENT OF SENATOR MICHAEL B. ENZI

Senator ENZI. Thank you, Mr. Chairman, and thank you for holding this hearing.

Over the weekend I was in Cody, Wyoming, and mentioned that

I would be at this hearing, and State Senator Simpson sends his

greetings to you.

Secretary MINETA. I will see him on July 4.

Senator ENZI. A lot of times people, when they think of Wyoming, do not think of transit. But we and South Dakota and some

of the other Western States were the early developers of Share-aRide. That means two people on a horse.

[Laughter.]

Senator ENZI. We are interested in getting from one place to another, and that is how that came about. So despite our small

population, we have some very real transit needs that need to be

addressed. Unfortunately, the current funding distribution model

for transit programs leaves behind the States with smaller populations like Wyoming, and a lot of these comments will be an echo

of what Senator Johnson said.

This year, Wyoming entities received approximately $5.1 million

in transit funds. That equals approximately seven one-hundredths

of 1 percent of the transit program. Of these funds, 50 percent

came from a $2.5 million one-time allocation from the Discretionary

Bus Program because of the fine work of Chairman Shelby on the

Appropriations Committee. I did want to acknowledge and express

my appreciation for your efforts in that matter. It was a tremendous help to Wyoming.

5

Unfortunately, the Administration proposes in SAFETEA to end

this critical program which may result in even fewer dollars for

Wyoming. Although there will be an overall increase for rural programs, it does little to ease my concerns about the need to provide

adequate transit funding for all States. Simply throwing more

money in the pot will not yield the results we are hoping to

achieve; rather, I fear it will produce some big winners and some

big losers. Although each State may receive the same percentage

increase, that won’t help States like Wyoming that start out with

only seven one-hundredths of 1 percent of the transit budget.

Last year, Senator Allard brought in a witness from rural Colo- rado who recommended a minimum of $5 million per State annually for the Rural Transit Program. That was picked up in the bill

S. 2884 that Senator Johnson mentioned that a number of us are

cosponsors of that kind of approach to this problem. We need a

small-State minimum for both the Rural Transit and the Elderly

and Disabled Program. Small-State minimums are common for a

number of formula-based programs because certain costs are

present regardless of the location or the population. A little does

go a long way in these small States, and that is why I cosponsored

that bill. It was a good bipartisan effort to address rural issues at

a very modest cost.

I am very pleased we are taking a closer look at these issues in

this hearing today because rural States do have transit needs, too,

and the current rural formula does not work for the rural States.

We need more vanpools and other systems to help seniors and disabled and others in small communities. In addition, we also have

to find ways to get seniors, disabled individuals, and other community members more strongly connected to the world beyond the city

limits.

I was pleased to learn the Administration included in its proposal a section on intermodal transportation. Intermodal transportation will be particularly beneficial for people in rural areas who

have limited access to air and rail transportation, and that, again,

kind of defines Wyoming. Connecting these systems will provide

some real efficiencies that will save both travelers and the Government real money.

I am looking forward to working with you, Mr. Chairman, on the

Committee’s bill and on problems I have outlined today. A number

of us will be vigilant as we will show our interest in the transit

projects that are very interesting and critical to rural and urban

America.

Thank you, Mr. Chairman.

Chairman SHELBY. Senator Corzine.

STATEMENT OF SENATOR JON S. CORZINE

Senator CORZINE. Thank you, Mr. Chairman, and I appreciate

your holding this hearing, and I, like all my colleagues, welcome

Secretary Mineta, who is a terrific voice for transportation in this

country and a terrific voice in general of a servant for our Nation.

That said, I have strong doubts that SAFETEA will be sufficient,

in at least my perspective, on meeting the needs facing our Nation’s mass transit infrastructure. Challenges posed by increased

ridership and aging of the rail and bridge network require a strong

6

level financial commitment from the Federal Government, and, unfortunately, I find the level not consistent with what the needs are

being defined. I am quite positive all of us can talk about more resources, but I think that if we are to deal with the kinds of transportation problems we have in my State, the most densely populated State in the Nation—actually, more densely populated than

India—we need to have the development of these mass transit systems for quality of life, environmental, and economic bases that

are important. I just think the amount, the $45 billion plus in mass transit

spending over the next 6 years is just not adequate, in my view.

By our perspective, it is a 1.2-percent cut, if you take into account

inflation, under the authorized amount under TEA–21 and falls

well below the Senate’s $56.5 billion that we talked about.

I think you are all aware of the Conditions and Performance Report, and the difference between what is requested here and the

additions just do not match. We should be doing more both for the

rural States, obviously, some of the needs that my colleagues have

mentioned are important, but in no way do I think that can take

away from the fundamental needs of our urban communities in, as

I say, the most densely populated State.

We have been very fortunate in New Jersey in the sense that we

have been treated well in the New Starts Program, but that is only

because we are catching up on huge gaps in investments that need

to be made, and we have argued long and hard about light-rail

projects which would significantly change, as I suggested, the quality of life, environmental considerations, and economic development

in the region. I also would mention in that context that we are

number 49 in the dollars sent off to Washington of the 50 States

and receiving it back. It is a hard argument not to deal with in my

State that such a fundamental need as mass transit is not talked

about.

I am deeply opposed to this proposal that would cap new Federal

funding at 50 percent instead of the 80/20 Federal-State split. It is

going to be an unbelievably burdensome change with regard to our

States, wherever you are, with regard to their current fiscal situation, the long-run fiscal situation as we see. So while I know of the

Secretary’s personal commitment to transportation, there is a lot of

work for us to improve this. I would like to be as cooperative as

possible and work closely with the Chairman and the Committee

to make that possible.

Thank you.

Chairman SHELBY. Senator Bunning.

STATEMENT OF SENATOR JIM BUNNING

Senator BUNNING. Thank you, Mr. Chairman. I would like to

thank all of our witnesses who are testifying today, and I would especially like to welcome my good friend Norm Mineta, Secretary

Mineta, excuse me, to the Committee.

As we all know, Congress will be working on a transportation reauthorization bill this year. This is a big deal to all of us, and we

all have very many transit needs. We have been hearing from the

communities in our States about their transit needs. Primarily in

Kentucky, the needs are for rural transportation. We do have needs

7

for buses in Lexington, northern Kentucky, and Louisville. Louisville is also interested in a light-rail system. They are very far

along with their studies and would like to start the new construction phase. I would like to concentrate on the rural needs today.

Kentucky has 30 rural transportation providers who receive Federal assistance. We also have three small urban systems serving

largely rural counties: Henderson, which also serves Henderson

County; Owensboro, which also serves Daviess County; and Ashland, which also serves Boyd County. Federal assistance is critical

to these agencies. Without it, they would cease to operate, leaving

hundreds of thousands of Kentuckians immobile.

Many of the riders are elderly or disabled, and rural transit is

their only way to shop, visit the doctor, go to church, and interact

with others. Rural transit also provides transportation for our

workers to their jobs in some of the most economically depressed

areas of the State and the country.

Rural transportation is vital to our Commonwealth and yet only

requires a handful of new buses or vans statewide each year. And

operating costs for the whole State are just a fraction of what any

large metropolitan area needs.

Finally, since this is my only shot at Secretary Mineta this year,

I think I would be remiss if I did not mention some other transportation needs. We are a State that is bordered by two major rivers,

so we have a lot of bridge needs. Louisville has a request in for two

bridges, which I am sure you have been made well aware of. But

northern Kentucky/Cincinnati, which also needs a bridge to replace

the Brent Spence Bridge, that allows I–71 and I–75 to cross the

Ohio River. The Brent Spence Bridge was designed to carry 80,000

vehicles per day. Presently, it is carrying 150,000 vehicles during

rush hour, and it is nearly impassable and is a great safety hazard

because of truck congestion and deterioration due to the very large

volume.

Because I–71 and I–75 are both major North-South interstates,

it is truly a national project. It serves the busiest trucking corridor

in the country, and these highways are the main routes for four

major international airports. Kentucky and Ohio are united in

their support for the replacement and are moving forward together,

but we must have Federal assistance soon to ensure that a suitable

replacement is constructed before the Brent Spence Bridge becomes

unsuitable.

Once again, thank you, Mr. Secretary, for being here and all the

other witnesses that are going to testify.

Thank you.

Chairman SHELBY. Senator Stabenow.

STATEMENT OF SENATOR DEBBIE STABENOW

Senator STABENOW. Thank you, Mr. Chairman, and welcome to

all of those who will be testifying. Secretary Mineta, it is wonderful

to see you again.

Mr. Chairman, I do want to speak for a moment but have my full

comments in the record.

Chairman SHELBY. Without objection, your statement will be

made part of the record.

Senator STABENOW. Thank you.

8

Ensuring safe and efficient public transportation is one of the

most critical issues that we will face as a Committee, and I know

we all share a great interest in this, and I look forward to working

with you, Mr. Chairman, and with the Committee.

Michigan is known as an automobile State, and we take great

pride in producing and driving our automobiles. But we also have

tremendous mass transit needs. And in the year 2002 alone, Michigan buses carried over 88 million passengers, so this bill is a big

deal for Michigan and for our citizens.

There are bus systems operating in every one of our 83 counties,

from urban Wayne County to rural counties in the Upper Peninsula. And despite covering all the counties, service in many of our

areas is minimal, creating a hardship for working families who

cannot afford to own a car. I share the concerns of my colleagues

regarding rural communities, and northern Michigan and other

parts of our State, as well as my colleagues who talk about urban

areas, we have both and have needs in both.

Last month, a Detroit News series chronicled how underfunded

our transit systems are and how they impact our working families.

The article focused on following Detroiter Karen Gholston, who

stands at the bus stop every morning at 3:30 in the morning with

her 2-year-old daughter in one hand and a can of pepper spray in

the other, waiting to catch a bus for her 6 a.m. class. This is not

unusual among those who are working and trying to get ahead as

part of working families.

Despite the fact that her class is only 12 miles away, it takes

Karen 21⁄2 hours to get there because the bus only runs once an

hour and is often late and sometimes doesn’t come at all. This is

an example of what we in Michigan are facing, and given that fact,

I have serious concerns about the Administration’s SAFETEA proposal and am looking forward to your comments.

First, SAFETEA not only fails to grow the transit program to

help us and help the woman that I just spoke of, but it also cuts

funding from the prior TEA–21 authorization. The Administration’s

proposal only provides $37.6 billion in guaranteed funding, which

is a 7.6-percent cut from TEA–21’s guaranteed funding level when

adjusted for inflation. And this is of great concern to me.

The SAFETEA proposal also eliminates the guaranteed funding

for the General Fund portion of the transit program, and, again,

limiting this funding is forcing transit to compete for 20 percent of

its funding in a very tight, difficult budget is of grave concern to

me.

Finally, the Administration’s proposal eliminates the 5309 Bus

Discretionary Program, and as a representative of a State that relies almost solely on bus systems for its public transit needs, even

though we are looking to options for light rail, we predominantly

use our bus systems right now, I find this particularly alarming.

According to the Michigan Department of Transportation, Michigan’s estimated transit capital and operating needs total nearly

$1.5 billion over the next 6 years. And much of this capital investment is needed to simply keep existing service going, even though

ridership is increasing.

Under TEA–21, Michigan received over $124 million under the

Bus Discretionary Program, but our capital needs have exceeded

9

$600 million. So there is a huge gap there. This shortfall exists despite the significant contributions by Michigan taxpayers. Michigan

ranks sixth behind five States with rail in direct support for our

public transit systems, and we unfortunately already rank last in

Federal transit funding among the Great Lake States and only receive 43 cents back on every transit dollar that we contribute to the

Highway Trust Fund.

These are serious issues for us. I am looking forward to working

with you to address these. The people in Michigan are counting on

us to be able to do a better job for them, and I look forward to

working with my colleagues on the Committee.

Chairman SHELBY. Thank you.

Senator Miller.

COMMENTS OF SENATOR ZELL MILLER

Senator MILLER. Mr. Chairman, I would like to thank you and

Senator Sarbanes for organizing this hearing, and I would certainly

like to thank Secretary Mineta and the other members of the panel

that we are going to be hearing from. I have some prepared remarks that I would like to ask unanimous consent be made part

of the record.

Chairman SHELBY. Without objection, so ordered. It will be made

part of the record in their entirety.

Senator MILLER. I would also like to say this for a few minutes.

I was around as a Governor in 1991 when ISTEA came along, and

I was still around in 1998 when TEA–21 came along, so I know

very well the benefits of these programs to the States of our Nation. And there is no doubt that in transportation, like in so many

other areas right now, the needs outpace the resources, and we are

going to have to deal with that. So I am interested in listening and

hearing about the funding level of SAFETEA, but at the same

time, Mr. Secretary, I am also interested in retaining the important

flexibility and the minimum guarantees and what I call the firewalls that State transportation planning organizations enjoy today.

Thank you.

Chairman SHELBY. Senator Santorum.

COMMENTS OF SENATOR RICK SANTORUM

Senator SANTORUM. Thank you, Mr. Chairman. I just also would

like to submit my statement for the record.

Chairman SHELBY. Without objection, it will be made part of the

record.

Senator SANTORUM. Thank you, Mr. Chairman.

Just a couple of things that I wanted to stress, and that is, the

idea of transportation, public transportation, and the role in welfare and the role that it has played and the important role that I

hope it continues to play in getting people to jobs who are

transitioning off of welfare. We have programs that we passed in

the 1996 welfare bill, and I want to continue to see those programs

grow as a way for us to get some of these intractable problems that

we have, not just in our inner cities but in our rural areas. And

I look forward to working very closely with you, Mr. Secretary, and

the Department in making sure that those programs are expanded

10

and create better access for those people in need of transportation

to get to their jobs, again, to transition themselves off welfare.

I, too, want to express concerns—at least I have some concerns

about the New Starts at 50/50, and I just see that as a real prejudice with any kind of major projects. In a sense, the closer you get

to funding these projects at 50/50, the harder it is, obviously, for

the locals to come up, and that means these big projects, some of

which are very, very important and transformational for our cities

in particular, tend to get pushed back in favor of smaller projects

that are easier for those communities to budget for.

I am not too sure in the long run that you end up with better

transportation networks as a result, and so I think that locking in

that number is not going to be beneficial for the efficient use of

transit in our urban communities in particular. And having two

large urban communities in my State, both of whom have major

projects in the pipeline, I want to put my marker down as expressing a very deep concern about that allocation.

Thank you, Mr. Chairman.

Chairman SHELBY. Senator Reed.

STATEMENT OF SENATOR JACK REED

Senator REED. Thank you very much, Mr. Chairman. It is good

to welcome Secretary Mineta and Administrator Dorn. They both

do an extremely good job for us.

I am pleased that you are here today, and I think your presence

and the fact that the Chairman is holding this hearing signifies the

importance of transit all across the country. Last year, in the Subcommittee we listened to representatives from cities like Salt Lake

City, Atlanta, and other major communities across the country, and

they all spoke to the critical importance of transit, not just in terms

of moving people around but in making sure there is a quality of

life and an economic vitality in their cities.

I am pleased that in the proposal the Administration has put

forth, principally, I think, through the leadership of both of you,

that there is a preservation of the share of the transit funding from

the gas tax at the levels of 20 percent of the fund. I think this reflects your longstanding support for balanced national intermodal

transportation policy. But I have three major areas of concern with

the bill that has been proposed.

First is the failure to provide new resources for transit. I think

everything you have heard today from every Member is the need,

the growing need, for more resources for transit, and that is not

just in the traditional Northeastern or West Coast urban centers,

but it is in places like Atlanta and Albuquerque and Denver. More

resources are necessary, and I do not think there are sufficient resources to do the job.

The second point I would raise would be the failure to guarantee

the transit funding in SAFETEA. There has to be a strong guarantee that transit funding will be there, that it won’t be subject to

rather innovative financing mechanisms or other ways to do it, but

it will be there guaranteed.

And, finally, I am concerned also that there is insufficient specific funding for transit security. We had several hearings last year,

and, indeed, Senator Sarbanes and I asked the GAO to do a report.

11

They looked at just eight transit systems, and they determined

that those systems alone would need $700 million to effectively protect them from terrorism. And that is just an example of the kind

of resources we will need as we prepare ourselves—we hope it is

just simply preparation and never an eventuality, but prepare ourselves for possible terrorist activity.

I look forward to working with you, Mr. Secretary, and with Administrator Dorn, Chairman Shelby, Ranking Member Sarbanes,

and Chairman Allard to craft a TEA–21 successor bill that will provide the resources and the flexibility to continue our success in

transit.

It is good to see you are well, Mr. Secretary, after your operation.

I knew your anesthesiologist who was my classmate at West Point.

That was my only concern.

[Laughter.]

Chairman SHELBY. Thank you.

Senator Sarbanes.

STATEMENT OF SENATOR PAUL S. SARBANES

Senator SARBANES. Well, thank you very much, Mr. Chairman.

First, I want to commend you for holding this hearing and also for

your indication that other hearings on this important issue will be

following.

Chairman SHELBY. Absolutely.

Senator SARBANES. I want to thank Secretary Mineta for appearing, and Administrator Dorn, we are pleased to have her back before the Committee.

Actually, sometimes people say, you know, all those opening

statements by Members of the Committee, what purpose do they

serve? But I have been sitting here this morning listening very

carefully to my colleagues, and I must say I think they have laid

out a lot of very serious and important concerns. We are getting

this reflection from the grass roots, so to speak, with respect to the

transit programs. So, I think it is serving a very important purpose

here this morning to put before the Secretary and the Administrator the challenges that are ahead of us.

As Senator Reed commented, we held hearings in the last Congress. In fact, the full Committee and Senator Reed’s Subcommittee, held a series of eight hearings on transit issues. Secretary Mineta, you kicked off those hearings, actually, last year.

And the witnesses included elected officials, business leaders,

transit operators and riders, consumer users, and they gave us

some very thoughtful testimony, which I think, frankly, can be

summarized by saying that TEA–21 has worked. That was the general view.

Investment in transit over the last 6 years has increased by almost 50 percent. As a result, we have seen increased ridership all

across the country. Transit saw the highest percentage of ridership

growth among all modes of surface transportation in the period

from 1993 to 2001, experiencing almost a 30-percent increase. More

and more communities are now considering transit investments,

and this is a record of success which needs to be built on.

We also face a struggling economy. The unemployment rate is

the highest in 9 years. With TEA–21’s reauthorization, we have an

12

opportunity to support a program with a proven record of job creation. The U.S. Chamber of Commerce estimates that each $1

billion invested in transportation infrastructure creates about

48,000 jobs. Transportation investment has a broader economic

benefit as well. The U.S. Conference of Mayors has pointed out how

much of our Nation’s economic output and jobs are in the metropolitan areas. Increasingly over the last decade, congestion is

threatening the economic viability and livability of these areas,

costing millions of Americans time and money that could be put to

more productive use.

Earlier this year, when Administrator Dorn was here to present

the Administration’s fiscal year 2004 budget request, I outlined

three basic principles that I believe any reauthorization bill must

include if we are to address the challenges we face. And some of

those have already been enunciated by others, but I very briefly

want to reiterate those principles.

First, we need to enlarge the transit program. I think virtually

everyone recognizes that. I am concerned that the Administration’s

proposal not only fails to grow the program, taking into account inflation, but it also cuts guaranteed funding over the 6-year period

so that the guaranteed level in fiscal year 2009, $6.6 billion, is

actually less than the program level today at $7.2 billion. This is

the guaranteed level. We need to increase the overall amount,

but within that, we need to make sure that we sustain the guarantee levels.

DOT itself has identified $14 billion a year in capital needs simply to maintain the condition and performance of our transit systems, $20 billion to improve conditions and performance. And some

of the witnesses on our second panel today have estimated even

greater needs.

Second, we need to maintain the funding guarantees which have

been very important in enabling local and State governments to

plan effectively. As I understand it, while the Administration’s proposal maintains those guarantees around the portion of the transit

program that comes from the trust fund, it eliminates those guarantees from the portion of the program that comes from the General Fund, which accounts for about 20 percent of the program. So

there is a shrinking back of the guaranteed level, which is a source

of great concern.

Also, one of the points made last year at the hearings was that

the funding guarantees must be preserved. It has been, I think,

fair to say that the guarantee level has effectively established the

size of the transit program under TEA–21.

We need to preserve the balance established by ISTEA and TEA–

21 between highways and transit—I know the Chairman made reference to that in his opening statement—both in terms of overall

investments and in terms of Federal matching ratios for the highway and transit programs.

We have worked out an accommodation between highways and

transit over the last several authorizations. It has stood us in good

stead, commands general support, and yet the Administration has

proposed to lower the Federal match for New Starts Transit

projects but has not proposed a corresponding change for highway

13

projects. And Senator Corzine and Senator Santorum and others

made specific reference to that.

Just to underscore the point, when John Inglish, the head of the

Utah Transit Authority, was before our Committee last year, he

said:

Without an 80/20 match, our North-South, our original line, would not have been

built. As a relatively poor system, of the quarter-cent in sales tax at the time,

we could not have done it with any other match. As it happened, that line so

transformed.

Senator Santorum used the word ‘‘transformation.’’

‘‘As it happened, that line so transformed our community, that within a year they

doubled the sales tax to expand the public transit system and the program has continued to grow.’’

If you weigh it so the highways are at 80/20 and the transit is

at 50/50, you are going to lose that transformation effect. And I

thought Senator Santorum made a very important point. People

will shy away from the major projects that really change the whole

transportation network. They will be more inclined to do the small

incremental things, and we will lose a major impetus for transforming the transportation infrastructure.

Having said all of that, I want to take a moment to commend the

Department for including the Transit and Parks Program in your

reauthorization proposal. This has been a pet of mine, legislation

I have introduced now in the last couple of Congresses to alleviate

traffic congestion, improve the visitor experience in our national

parks and other public lands by providing visitors with alternative

transportation options when they visit these national treasures.

What is happening now, you know, families line up in an automobile, a huge line, emitting pollution. They all edge up to the admission kiosk. Then they get there and are told the park is full,

and they cannot come in, there is no more parking and away they

go. And we need to develop systems where they can put their cars

somewhere else and everyone can be brought into the park. It is

being done in some places across the country, and it is working

with great success.

We have a big challenge here ahead of us. The interest of the

Committee is obviously manifest. You have a quorum already who

have come today in order to be here for this hearing, and we look

forward to working closely with the Department. But it is my own

view that we need to strengthen this proposal in a number of significant respects, and I hope we will be able to do that in the weeks

to come.

Thank you, Mr. Chairman.

Chairman SHELBY. Senator Carper.

STATEMENT OF SENATOR THOMAS R. CARPER

Senator CARPER. Thank you, Mr. Chairman.

I was in your State of California 2 weeks ago, Mr. Secretary, and

flying into an airport down around LA, not LAX but John Wayne

Airport, as I recall. I thought, ‘‘Well, I never knew him.’’ Then I

flew into San Jose, and I was walking around, and I see everywhere I went, it said Norm Mineta Airport. I said to a lot of people,

‘‘I know him.’’ Good looking airport. They remember you fondly,

and almost every day, I am told.

14

Senator SARBANES. That is a preliminary to getting a Thomas

Carper Airport in Wilmington, Delaware.

[Laughter.]

Senator CARPER. In Delaware we do not have any commercial air

service. Amtrak used to have a marketing campaign and the theme

of the marketing campaign is, ‘‘Maybe your next flight should be

on a train,’’ and in Delaware all of our next flights are on trains.

Maybe I can get a train station named after me if I am lucky. Although, Senators Johnson and Stabenow both told me since I

walked in that in my absence you decided to eliminate funding for

Amtrak. So, maybe we will have to find something else to name

after me. Who knows?

Mr. Secretary, thanks for joining us today, Administrator Dorn.

It is good to see you both, and I am looking forward to this hearing

on SAFETEA. Senator Sarbanes said that he regards TEA–21 as

a success in his State and around the country. I do as well. And

it sparked in my little State about a 20 plus increase in transit ridership since its enactment and that is a very good thing. And we

believe at the heart of the success of TEA–21 is this combination

of several things, the program flexibility, State and local control,

and substantial resources. And SAFETEA, I am generally pleased

to see efforts to expand flexibility and local control so that communities can further define and direct the transportation solutions

that fit their respective needs.

Having said that, I do believe the proposal does lack enough of

a third key ingredient, and I am sure you heard some of that this

morning, and that is substantial and guaranteed resources, and I

am afraid that this may be a fatal flaw. SAFETEA provides, as I

understand it, about $46 billion in total authorization and some

$371⁄2 billion in guaranteed funding for transit over the next 6

years, and when you compare that to what we have provided in recent years, it represents about a little over a 1 percent cut, and

maybe a 71⁄2 percent cut respectively from TEA–21’s total funding

level when adjusted for inflation. I believe in fiscal 2004 the transit

program will be flatlined, the same as that in 2003.

I had a chance to see the highways in your old part of the world,

Mr. Secretary, and I know they look a lot like ours in the Mid-Atlantic. The highways are clogged with gridlock and the skies are

filled with smog. The critical need for transit service across our Nation has become I think clearer and clearer. I believe we need to

spend more, not less, to promote and strengthen transit options in

both rural and in urban areas.

The funding levels put forth in SAFETEA will not allow Delaware or our Nation to tackle our impending mobility crisis. These

low funding levels are the direct result of the Administration’s opposition to increasing revenue measures such as raising Federal

fuel taxes despite an obvious need for transportation investment. I

realize the difficulties associated with finding additional revenues

for transportation in these lean times. As a Governor, I sought to

raise motor fuel taxes. We succeeded once, but a couple of other

times we were not as successful. But the money we raised, we put

it to good use.

But I think it is our job to determine the appropriate funding

level and to provide a fair plan to generate that level of funds, and

15

I hope to work with my colleagues here and in the Senate to do

just that.

Beyond the question of overall funding, I have a couple of specific

concerns with policy changes put forth in SAFETEA. Let me just

mention them. Principally, SAFETEA proposes eliminating the

guaranteed funding or the firewall protection of the General Fund

contributions to the mass transit account of the trust fund, which

would mean reduced funding for transit due to the competition we

all know is going to exist for scarce discretionary dollars. Guaranteed funding is perhaps the most crucial component of TEA–21,

and I will work hard to resist changes to the guarantee that could

negatively affect the transit program. I am also concerned by the

proposed change of the statutory Federal share of funding for the

New Starts Program from 80 to 50 percent. I think Senator Sarbanes alluded to that. I just think we need to maintain an equal

funding level with highway projects, or we risk dissuading communities from making transit investments, even those that make

sense.

I hope to learn more about these issues from your perspective

today, and also about other program changes such as the elimination of the Bus Discretionary program, changes to the job access

and reverse commute program, and the eligibility of nonfixed

guideways projects through the New Starts Program. While some

of these changes may enhance flexibility and simplify the program

structure, I would like to ensure that they do not have unintended

consequences.

In closing, I just want to again say, Mr. Secretary, Administrator

Dorn, thanks for being with us today, and for the work that has

gone into preparing SAFETEA. I believe the proposal provided us

with a good starting place to being our debate, and we look forward

very much to being part of that debate with all of you. Thank you.

Thanks, Mr. CHAIRMAN.

Chairman SHELBY. Thank you.

Mr. Secretary, your entire prepared statement will be made part

of the record in its entirety. You may now proceed as you wish.

STATEMENT OF NORMAN Y. MINETA, SECRETARY

ACCOMPANIED BY JENNIFER L. DORN, ADMINISTRATOR

FEDERAL TRANSIT ADMINISTRATION

U.S. DEPARTMENT OF TRANSPORTATION

Secretary MINETA. Mr. Chairman, thank you very, very much.

Senator Sarbanes and Members of the Committee, let me thank all

of you for this opportunity to appear before you to discuss the Administration’s proposal to reauthorize our surface transportation

programs entitled the Safe, Accountable, Flexible, and Efficient

Transportation Equity Act of 2003 or SAFETEA.

I am pleased to have Jennifer Dorn, our Administrator of the

Federal Transit program, here to help me answer any of the detailed questions you might ask.

The Administration’s proposal serves as the largest Federal

transportation investment in our Nation’s history. SAFETEA

builds upon the principles, values, and achievements of ISTEA of

which I was the proud principal author in 1991. Of course then

16

many of you worked on TEA–21 in 1998, while recognizing the

need to address the new challenges.

As a former Member of Congress and having served on the city

council in San Jose and then elected its mayor, I recognize the importance of this year’s reauthorization cycle to securing the funds

and the framework for long-term investments in our system of

transportation. Because the need for funding predictability for infrastructure investments is critical to our State and local partners,

our Nation cannot afford the uncertainty of a short-term extension

of current law. So, I urge the Congress to reauthorize a comprehensive 6-year surface transportation program before the current law,

TEA–21, expires on September 30, 2003.

Though some might suggest an even greater increase in spending, the facts are clear, the President’s proposal represents a record

Federal investment in surface transportation. From fiscal year

2004 through fiscal year 2009, SAFETEA would invest over $201

billion on highway and safety programs and nearly $46 billion on

public transportation programs which is a 28 percent increase over

TEA–21. Simply put, with more than a 28 percent increase in

spending over TEA–21, SAFETEA represents the largest Federal

commitment to public transportation in our Nation’s history.

SAFETEA promotes common sense transit solutions by reducing

the number of different program silos and distributing all programs

by formula except New Starts. Rather than have States try to

match projects to specific pots of money, the Federal Government

should help States to maximize mobility and to create a seamless

transportation network. Accordingly, our proposal provides States

and localities with much needed flexibility to fund priority projects

in their communities.

Stable formula funds help agencies to do more with less. They

provide financial markets the confidence to support transit investments, provide communities an incentive to commit their own longterm resources and instill confidence in local developers. The

necessary transit commitments to support infrastructure growth

will be honored.

SAFETEA proposes a shift to dependable formula and capital

funding and a larger New Starts Program by restructuring FTA

programs into three major categories from the present five. Under

SAFETEA, urban areas will have increased flexibility and have

more predictable funding to improve their ability to make longerterm investment plans and to acquire necessary financing. We

must ensure that every year each community can count on a share

of these funds. SAFETEA would expand the New Starts Program

by 55 percent and expand capital assistance for new nonfixed

guideway corridor systems and extensions that meet the New

Starts criteria. Today, a fixed guideway is often not the most cost

effective way to provide new or expanded public transportation

service. Today’s rules too often require communities to choose a

more expensive, fixed guideway system in order to qualify for a

New Starts grant. Moreover, some small- and medium-sized communities that might otherwise benefit from the creation of new

transit options simply cannot generate enough riders or travel time

savings to justify a more expensive fixed guideway system. While

fixed guideway projects are critical and will continue to be eligible

17

for funding, worthy public transportation projects with lower cost

nonfixed guideway solutions also deserve consideration.

SAFETEA is also based on common sense transit solutions providing States and localities the opportunity to determine how they

can best service those heavily reliant on public transportation including rural residents, older adults, persons with disabilities, and

low-income riders. Unfortunately, about 40 percent of rural counties today have absolutely no public transportation, while others

enjoy only limited service. Because it is exactly these rural residents that most often rely on rural transit, our proposal increases

public transportation funds for rural communities by 87 percent

over TEA–21.

With stable formula funding, streamlined programs, performance

incentives, and simplified administrative requirements, our communities will be in a much better position to leverage the Federal

transportation investment in public transportation and provide

Americans with common-sense solutions to meet their transportation needs. Mr. Chairman, Senator Sarbanes, and Members of

the Committee, that is exactly what the President’s proposal would

provide.

Again, thank you for giving me this opportunity to appear before

you today. I would be more than pleased to take your questions.

Chairman SHELBY. Thank you, Mr. Secretary. I have heard several times from you and the Administration and the Administrator,

who is here, Ms. Dorn, that one of the goals of the reauthorization

is to reduce program silos that have had the effect of altering local

decisionmaking based on the availability of funds, and I applaud

that effort.

I note an inconsistency in that approach in SAFETEA, however.

If the theory is to remain mode neutral, and not allow the Federal

Government’s program structures inappropriately to influence local

decisions, why change the Federal match for New Starts? Would

that not cause a highway project to look like a more attractive option than a transit project?

Secretary MINETA. Next question.

[Laughter.]

Chairman SHELBY. You can pass that on to Ms. Dorn, but I think

she is leaning toward you, Mr. Secretary.

Secretary MINETA. Mr. Chairman, there are probably two overriding issues that people bring up about SAFETEA. One is the

funding level and the other is about the change in the New Starts

Program. Again, let me reiterate that this is the largest bill involving public transportation investment by any Administration, larger

than ISTEA, larger than TEA–21, and so from that perspective we

are very proud of the bill.

When in doing ISTEA, if you will recall, at the time highways

were 90/10, transit was 75/25. Local communities were making decisions based on where do they put out the money and get the most

back? Obviously, it was the highway, 90/10, because transit was at

75/25. That is why in ISTEA I made it all 80/20, so that everybody

made decisions based on what is the best transportation solution,

not where do I get the most money back for the money that I put

on the table? So that was preserved in TEA–21.

18

As we look at the experience of what we have in public transit

today, it is something like 49 percent is really the level of contribution in terms of what comes from the local communities. The pattern has been that even though the law was 80/20, local districts,

in order to get up the food chain, increased their own local investment in their system and tried to get more favor because there is

more local transit dollars being invested, and that way, they would

be looked upon with favor by the FTA. The principle of 80/20 is still

there in all of the programs. We have changed it as it relates to

New Starts. We believe we are not only conforming to what we are

experiencing, but it is also the way to be able to spread more of

the money across the country in terms of communities that want

to develop a New Start program.

You mentioned the silos, and that really has been a problem, and

I experienced that as a mayor, and if I might take the time to give

an example. In 1972, President Nixon decided that he wanted to

do a block grant type program, and of course we had discretionary

pots of money in those days, and so as the mayor of the local community, they chose 14 communities to try something regarding a

block grant program. So we came up with all of our needs in our

community. One of the needs that we wanted were four community

centers, and when I was meeting with the HUD officials they said,

‘‘We do not have money for your four community centers. We have

money for two. But we notice that you did not have any submission

for sewage programs. So do you not go ahead and think up $100

million worth of sewage treatment programs?’’ I said, ‘‘I will tell

you what, give me the $100 million and I will go ahead and build

the other two community centers.’’

Discretionary pots of money restrict the ability to be flexible.

That is why in this program we have reduced it from five to three,

and given much more flexibility, as Senator Carper was mentioning, in order to be able to have governors or mayors, transportation people, be able to use that flexibility to direct their resources

to what is facing them in their local community or in their States.

Because otherwise what we do is use this theory of, I guess, you

might say, margarine spread on the piece of bread. But that is not

how Delaware is, as compared to Alabama, as compared to Utah,

Pennsylvania, and I think the flexibility that we have in this program really is giving governors and local transportation people the

ability to be much more flexible and direct their resources.

That is why we have eliminated the silos, why we are trying to

conform to what in reality is occurring right now, and that is that

the local share is now 49 percent.

Chairman SHELBY. Senator Sarbanes.

Senator SARBANES. Thank you very much, Mr. Chairman.

Secretary you mentioned the overall level of funding and the

New Starts ratio as two issues that are being raised. I also want

to talk about the funding guarantees as a very important additional issue.

But on the New Starts, let me just say that the fact that as a

practical matter you are getting a higher match does not, in my

view, undercut the desirability that the match be the same between

transit and highways at 80/20 in their overwhelming needs, and if

communities are prepared to do a little more in order to move the

19

project, that is one thing, but they ought not right up front be confronted with this discrepancy between 80/20 and 50/50 because it

is going to, as you indicated when you did the 90/10 and 75/25, it

is going to skew their decisionmaking. I go back to this quote from

the head of the Utah Transit Authority, that I read at the outset

in my statement, which I think is very meaningful when he said:

Without an 80/20 match our north-south, our original line, would not have been

built. As a relatively poor system of the quarter-cent in sales tax at the time, we

could not have done it without any other match. As it happened that line so transformed our community that within a year, they doubled the sales tax to expand the

public transit system and the program has continued to grow.

I mean there is pretty strong testimony there. They never would

have embarked on it at 50/50, at least according to this testimony.

Senator BENNETT. That is true.

Senator SARBANES. It has just been corroborated by the senior

Senator from Utah.

Secretary MINETA. If I might interject, I wonder if Salt Lake City

might now have been a special program because of the Olympics

coming there, and as we do with Olympics, whether it was in Los

Angeles, Atlanta, or as it was in Salt Lake City, we do pour a great

deal of money into those communities. I think that that has helped,

especially when the Governor took the initiative to tear down I–15

and start all over again, and it was a program that we supported

because of the traffic pattern in Salt Lake City.

Senator BENNETT. I do not want to intrude on your time, but the

light rail proposal started before Salt Lake got the Olympic bid,

and we had to do it to deal with the problem there. Utah is thought

of as a rural State, but 85 percent of our population lives between

the mountains and the lake, and it is a very relatively narrow situation, and we had to have some transportation up in there. You

talk about tearing up I–15. In order to get I–15 done in time, the

State actually paid more than 50 percent of the cost of I–15, and

we had to do that for the Olympics. But for the record, the light

rail was begun, the 80/20 match was approved and we were underway before Salt Lake achieved the Olympic bid. I do not, by any

means, want to suggest that the Olympics did not have an impact.

You are right. I think we moved up the queue because of the Olympic bid, and we received the full funding grant agreement probably

faster than we would have, but in terms of the actual chronology,

it was in before the bid came to Salt Lake.

Senator SARBANES. Right.

Senator BENNETT. Thank you.

Senator SARBANES. Let me turn to the guaranteed funding issue.

The DOT is on record in numerous venues as supporting guaranteed funding for the transit program. In fact, the Administrator

testified here last April, one of the most visible and important elements of TEA–21 has been the tremendously positive impact of stable and dependable funding streams on transit development. You,

yourself stated in March: ‘‘The budgetary firewalls have created

confidence among grantees regarding Federal funding, an extremely important aspect of program delivery for State and local

officials.’’

As I understand it, over the life of TEA–21 the transit program

received 100 percent of TEA–21’s guaranteed amount, $36 billion,

20

and only one-half of 1 percent of TEA–21’s nonguaranteed authorization, $25 million out of $5 billion. So, in effect, the funding guarantees establish the size of the transit program. SAFETEA proposes to guarantee highways at $201 billion and purports to fund transit at $46 billion. But assuming that transit

is actually funded only at the guaranteed level, as was the case

under TEA–21, that would be a highway program of $201 billion

compared to a transit program of $37.6 billion. In other words, you

are not providing the guarantee for the transit money that comes

out of the trust fund about 20 percent of the money. In TEA–21,

that money was guaranteed as well, and as I have indicated, the

transit money in effect paralleled the guarantees. So it seems to me

this is a potentially very serious reduction in transit money. I disagree with your assertion about this being the biggest program

ever. I mean in nominal terms that is true, but as I understand

it, if we adjust it in real terms for inflation, it does not reach the

TEA–21 levels, but leaving that to one side, the drop of a guarantee for 20 percent of the money has potentially extremely severe

implications for transit. What is your take on that issue?

Secretary MINETA. In TEA–21, the guarantees only apply to the

amount that comes from the trust fund, both the highway and

mass transit account, as you have indicated. The portion that

comes from General Funds is not guaranteed. There are no other

guaranteed programs in the Federal budget. And the only one that

was guaranteed was transit.

We feel confident transit programs can compete effectively for

General Funds, even if they are not included in the firewall. This

was a discussion that went on for a long time and part of it is the

fact that how do we isolate transit programs for the total Federal

programs and say, yes, they should have a guarantee? It then

precludes Congress or the Administration from shifting priorities

whenever some need arises including, let us say, September 11. So

that is why we felt that the feeling was that we should not tie the

hands of future Congresses or the President with General Fund

firewalls.

Senator SARBANES. I thought September 11 was a very powerful

argument for further enhanced investment in transit. Am I wrong

about that? That is my understanding, that the one response to

that is we have to beef up these transit systems. These people were

moved out of Washington and New York on the transit systems,

were they not?

Secretary MINETA. Well, most of the movement was I think on

the commuter rails rather than on the local transit systems, the

MTA, but mostly the——

Senator SARBANES. Amtrak.

Secretary MINETA. Amtrak, New Jersey Transit.

Senator SARBANES. So you are back to supporting Senator Carper

on Amtrak? We are going to keep moving you from one slot to another on this.

Secretary MINETA. And the Governor Thomas Carper Station in

Delaware as well.

Senator SARBANES. Thank you.

Chairman SHELBY. Senator Bunning.

Senator BUNNING. Thank you, Mr. Chairman.

21

Secretary Mineta, let me get back to the original statement I

made. Do you share my concerns about rural transit needs, and

will you work with us to eliminate those concerns?

Secretary MINETA. Yes, sir. And SAFETEA really does reflect an

emphasis on the rural transit needs. As I recall, under SAFETEA,

as compared to TEA–21, the rural program is an 88 percent increase in rural formula programs, and so there is recognition of

what we have not been doing in rural transit in the past, and we

are trying to correct that in SAFETEA.

Senator BUNNING. I know the overall increase, but how about the

ability to have the local governments match up in paying?

Secretary MINETA. These monies, of course, go to the State and

then they work with local governments. What we have done is to

increase the planning and technical assistance that can be provided

at the State level in order to strengthen not only the State but also

the local communities in terms of their own planning capabilities,

to make sure they get the ridership for their local programs. But

what we are trying to do is strengthen the planning and just the

capabilities at the State and local level.

Senator BUNNING. This question is kind of off the wall, so you

can pass it on to someone else or you can answer it.

Secretary MINETA. Ms. Dorn, if you would?

[Laughter.]

Senator BUNNING. Last fall, Congress passed legislation to arm

airline pilots by very large margins both in the House and in the

Senate. Last week it was reported that only 44 pilots out of a possible 60,000 have been armed. Many pilots believe the TSA is trying to kill the program by foot dragging and making the program

burdensome. At the current rate you are training pilots, it will take

several hundreds of years to arm them all. It is clear to me that

we have not trained enough pilots to have them be any type of deterrent. We have thousands of commercial pilots who served in the

military and many still do. Yet the TSA has only been able to arm

44 of them. Do you have any idea why there is such a delay in implementing the law as it is written?

Secretary MINETA. First, as you know, the Transportation Security Administration was transferred on March 1 to the Department

of Homeland Security. But prior to that transfer, this program was

initiated. Congress had provided no funding to TSA, so we readjusted some monies and reallocated the financial resources to go

ahead and do this training of the initial 44 pilots who volunteered

for this program, but there is no funding.

Senator BUNNING. Even in the new appropriation bills that were

passed in January?

Secretary MINETA. None of the supplemental appropriations.

Senator BUNNING. No, not supplemental. I am talking about the

regular appropriations.

Secretary MINETA. The regular did not.

Senator BUNNING. The Omnibus Appropriation Bill.

Secretary MINETA. I do not believe in the Omnibus it was provided. I will check on that, because that was after March 1, and

I did not follow it in terms of the Omnibus Appropriations Bill

after March 1 when TSA got transferred to Homeland Security. I

22

can get that for the record and submit it to you. (Information was

not received in time for publication.)

Senator BUNNING. Thank you very much.

Thank you, Mr. Chairman.

Chairman SHELBY. Thank you.

Senator Reed.

Senator REED. Thank you very much, Mr. Chairman, and thank

you, Secretary Mineta.

Senator Sarbanes mentioned we held eight hearings on transit

issues, and if I may give you a condensed summary of what the

findings are I believe. First, transit has been extremely successful

under ISTEA and TEA–21. Ridership has increased. Systems have

been renovated, rejuvenated, and all across the country transit has

taken on a new energy and a new popularity. In addition, I think

that there is increased demand as a result for new transit systems

and for increased funding for existing transit systems. That is a result, not just of our transportation policy, but also environmental

policy. My Director of Transportation in Rhode Island frankly told

me there is just no more room for highways in Rhode Island. If we

do not have complementary transit systems, if we do not have remote satellite parking to put people into trains and the buses, even

if we had the money, we could not build more highways.

That demand requires additional resources, and it is a demand,

as I suggested in my opening remarks, that is not exclusive to any

part of the country. Boise, Idaho, the mayor testified about the

need for transit in Boise. We have talked about Salt Lake City.

They were there testifying. Atlanta, Las Vegas, Denver, and of

course New York moves about 33 percent of its people each day in

mass transit; Boston. And those are systems that have peculiar

problems because of the age and the need to continually renovate

a very old system.

The other aspect that I could summarize is that local transit authorities, both State transportation officials and local authorities,

need certainty and predictability in terms of their planning. They

need that for their own purposes. If they are going to make a significant commitment of local resources, they know the Federal Government will be there, not just this year and next year, but in 5

and 10 years out, because those are the scale or scope of these

planning processes.

And that brings me to the criticisms that you have heard repeated here many, many times. Flatlining the transit budget does

not give a sense of certainty that these increased demands will be

met, that ultimately it will be robbing Peter to pay Paul, and probably robbing Peter and Paul to pay somebody else, given the fiscal

situation of the United States. The end of the guarantee, sent a

strong signal that there may not be a lot of certainty any longer.

I know you indicated that transit is popular, and we will find a

way, but again, in a declining fiscal situation with increasing deficits, such efforts might not be successful. The increase of the transit match vis-a`-vis the highway match for New Starts sends exactly

the wrong signal to planners.

All of this, I think, has to be on the record. I think you recognize

it. You point out that this is an increase in terms of size. Without

inflation adjusted figures it might be, but nevertheless, it is not

23

just a question of absolute size. It is a question of adequate resources for the demand, and everything we heard in 8 Subcommittee hearings, everything you have heard today, indicates

that demand is increasing dramatically. Not only is this satisfying

just a popular demand, but also we will never meet the goal of a

comprehensive intermodal transportation system that addresses

the issues of pollution and congestion unless we have vigorous investment in transit. I know you know that, and I believe that you

will be able to work with us to correct some of these issues.

I do not want to ask any specific questions because the questions

have been raised and you have responded. I do not want you to respond again. Let me turn to a specific issue, and that is the lack

of funding for identified transit security issues. I understand that

there is this new arrangement between the Department of Homeland Security and your department, so you might comment on that

relationship, and also on what you propose to do in terms of security issues for transit systems.

Secretary MINETA. One of the most extensive programs we have

probably undertaken through the great efforts of Administrator

Dorn is the work that she has done in conjunction with APTA on

getting to the districts or transit districts about security concerns,

and also not only transit districts, but also first responders, and

that has been, I think, a program that we have aggressively undertaken, but maybe I will have Ms. Dorn give more of the details of

what she has done with transit and security issues.

Administrator DORN. Certainly. Mr. Chairman, I appreciate your

strong support for the efforts that we are undertaking at the Department, and specifically at FTA. Early on Secretary Mineta encouraged me, in partnership with the transit industry, to be as aggressive as possible about conducting a series of security assessments, which we did 37 security assessments across the country in

order to prioritize the risks and the vulnerabilities. This helped the

transit agencies understand how they could best prioritize those

risks and those vulnerabilities, and to help the transit agencies to

understand how they could best prioritize those risks and those

vulnerabilities and put together emergency response plans.

The results of those efforts have been two-fold. Number one, they

have yielded really important outcomes for the individual transit

agencies, because as we have discussed before, it is impossible to

do a cookie cutter kind of approach in terms of security. And number two, we have learned in terms of our team of experts, some

very important principles about best practices that can be shared

with the industry.

We also then are in the middle of doing technical assistance follow-up teams. We identified some vulnerabilities such as emergency response preparedness, and those sorts of activities are being

taken into account right now as we have teams on the ground and

will over the next year into 60 transit agencies.

The Secretary mentioned our security forums in which we are

bringing the first-line responders together with the transit agencies

to make sure that those emergency response preparedness plans

are acted upon, and we have given approximately 85 grants for

drills for community-wide drills.

24

In the course of our work together, we have discovered that the

three most important principles of funding, in terms of getting the

most bang for the buck—and we did have limited funding for this

activity through the generosity of the Administration and the Congress. We found the three most important investments relate to

transit employee training, first-line supervisors, they know what to

do and how to react, and we have seen significant improvement

across the board. First, our transit agencies are safer than they

have ever been, and of course, as we have discussed before, because

it is an inherently open and accessible environment, we have a situation that is difficult to address. Public awareness is the second.

We can have eyes and ears of our passengers, and they can plan

an important role, and many of our transit agencies have partnered

with not-for-profits and with other parts of cities in order to make

sure that that public awareness level is increased. The third and

final piece is the emergency response preparedness and drilling

against those plans.

Those are the three most important investment arenas in which

we think it is important to undertake real solid work.

We have worked very closely with the TSA, and now it, of course,

is in the Department of Homeland Security. They have taken our

risk assessment of the 37 top agencies, and they are incorporating

those in determining which and how grants should be given to

transit agencies. We have an ongoing, daily partnership with Department of Homeland Security. And we believe it is appropriate

for them, in the position from which they operate, to be able to determine what other prioritized risk, is port security or another sector more important in terms of those kinds of investments? So we

believe that the sharing of expertise continues and the responsibilities appropriately allocated between FTA and TSA. We have a

daily, working relationship, and I am confident it will get even better over the course of the months and years to come.

Senator REED. Thank you.

Chairman SHELBY. Senator Santorum.

Senator SANTORUM. Thank you, Mr. Chairman. I am going to try

to run down a few questions very quickly.

I think you have heard from the Committee as to our concern

about this 50/50 funding. I just have a question with respect to

your comments that a lot of transit organizations are trying to

jump ahead in the queue by going to better, more even matches,

50/50 matches.

Could you provide me a list of those projects? I want to see

whether what I suggested in my earlier comments is true. Are

those smaller projects that are easier to fund, or are these big,

major projects that are being bid up? I suspect they are probably

not. I might be wrong, but I would like to see. And if, in fact, they

are smaller projects that are jumping ahead in the queue, I think

it proves the point that that is what we are going to get more of.

Chairman SHELBY. Senator Santorum, would you please yield?

Would you ask them to furnish that not only to you but also to the

entire Committee?

Senator SANTORUM. Yes, Mr. Chairman, I would be happy to.

Senator SARBANES. Could I add a wrinkle on that? I think it is

important that we know whether it changed over time. Some of

25

these projects, they start out at 80/20, and then in order to keep

them moving or to expand them, once they have proven their value

to the local community, they are willing to do more. And I think

we need to know that as well.

You may have something that shows up at 60/40 in an expansion, but its genesis was at 80/20. And if that is the case, we need

to know that as well.

Senator SANTORUM. I appreciate that additional request to my

request. Thank you.

A couple other things. First off, with respect to the Job Access

and Reverse Commute, my understanding is you are proposing a

formula for that. I have to just put my marker down that I agree

with my former Transit Administrator out of Pittsburgh, Bill

Millar, who has expressed concern that is going to spread things

a little bit too thinly from my perspective and I think could have

the impact of diminishing the program’s effectiveness. And I just

want to make a comment to that effect and suggest that that is

something the Committee needs to look at as to how we can best

utilize those resources in an area where it is going to maximize

their efficiency.

A couple other things. I am also on the Finance Committee, and

there is a proposal floating around by Senator Grassley and Senator Baucus with respect to transit bonding. Can you give me the

Administration’s opinion on that proposal?

Secretary MINETA. We do not support that 2.86-cent diversion at

all and feel that the Grassley-Baucus, I believe it is, approach

should not be undertaken.

Senator SANTORUM. Thank you, Mr. Secretary.

One final comment. I am going to get off the transit bandwagon

here for a second. This is my only chance. I do not sit on any of

the relevant Committees on other issues regarding transportation.

I come from Pennsylvania, a State that has more roads than

New York, New Jersey, and all of New England combined. And

there are proposals floating around saying that all States should

get in the new authorization 95 percent funding as a minimum

level of funding. I just want to suggest that, as a State that basically connects the entire Northeastern part of the United States to

the rest of the country, certain States are more important for interstate transportation than other States; and that if we are going to

go to a system that says that everybody is going to basically get

back what they put in, what is the point of having a program that

is supposed to be modeled after improving efficiency for the entire

country?

With that comment in advance, I would like to know what the

Administration’s viewpoint is on a funding formula that would require that all States get at least 95 percent of the money they put

into the system back?

Secretary MINETA. In SAFETEA, we have retained the provisions

of ISTEA of staying at 90.5 percent. Now, there is a group called

SHARE that is pushing for the 95 percent proposal. That would

add $6 billion to the Highway Program itself, and, frankly, we do

not know where that funding would come from.

Our $201 billion program is based on moving the 2.5-cent ethanol

tax that is now going into the General Fund, moving that over to

26

the Highway Trust Fund, and digging into the resources of the unobligated balance in the Highway Trust Fund in order to come up

with the $201 billion program on the highway side, which again,

as I said and would reiterate, is the largest highway program. But

to get to 95 percent return for every State is an additional $6 billion, and we just do not have the resources to——

Senator SANTORUM. If you give me just an additional minute,

maybe I should ask the question a different way. Assuming we

could come up with $6 billion, would that be the best way to spend

it? I mean, that is really the question here. Congress very well may

come up with more money. My point is that if we do come up with

more money, is that the most efficient way to spend that money to

make sure that we are improving the road network to provide better infrastructure for the interstate transportation of goods in this

country?

Secretary MINETA. Without having any other discussions with

OMB or Domestic Policy Council, but as a personal opinion, I

would say it would not be a good application of the resources.

Senator SANTORUM. I hope you weigh in with those other agencies to express your opinion. Thank you.

Senator SARBANES. Could I point out that to get expeditiously

from the North to the South along the Eastern corridor in this

country, you have to go through Maryland as well.

[Laughter.]

Secretary MINETA. Maryland will get all the $6 billion.

[Laughter.]

Chairman SHELBY. Senator Bennett.

STATEMENT OF SENATOR ROBERT F. BENNETT

Senator BENNETT. Thank you, Mr. Chairman.

Senator Santorum asked my leading question about GrassleyBaucus, and I am happy to hear you say that the Administration

is opposed to that.

A quick little bit of comment and history. When the interstate

highway system was first proposed, it was going to be bonded. And

Senator Harry Byrd from Virginia said, ‘‘Roads, yes, gentlemen.

Bonds, no, gentlemen. We are going to pay for this as we go.’’ And

the Highway Trust Fund was created and the gas tax was created

to see to it that we did not create bonds but that we paid for this

as we went along. And given that history that goes back 50 years,

I get nervous that people are now talking about bonds to pay for

transportation again.

We had a hearing in the Joint Economic Committee on Transportation, and this is an oversimplification of the subject that was discussed, but toll roads came up. And it was a new vision of how toll

roads, actually toll lanes, put market forces into transportation, in

that people would be willing to pay a higher price to get on an express lane. In an emergency—the evidence where it has been tried

would indicate that it wouldn’t go to the rich in every instance,

that people who have an emergency have to get to a hospital, have

to get to an appointment, say it is worth the extra $2 or $3 that

I would be charged with a ‘‘smart tag’’ kind of collection system.

And I just pull into the lane and go there, and I know I am going

to be charged as I go past the various places, but it is worth it to

27

me. And others say I cannot afford that, and it is worth it to me

to take a little while longer to get to work, and that would change

the mix of highways pretty dramatically and provide another

source of funding. Going along with the proposal for an increase in

the gas tax, if you start talking about the highest rate of expenditure ever for transit and highways, we have got to have another

source of funding somewhere.

Have you looked into that kind of thing? And do you have any

opinion about it?

Secretary MINETA. And, in fact, in SAFETEA we allow HOV

lanes to be used for what is referred to as ‘‘hot lanes.’’

Senator BENNETT. ‘‘Hot lanes’’—that is the name I could not

come up with. Thank you.

Secretary MINETA. And so that is a facet of our Highway Program in SAFETEA that is new that we allow.

Senator BENNETT. Have you done any studies as to how much

money that might raise? What contribution—I assume that would

all go into the Highway Trust Fund, or would that all go to

local——

Secretary MINETA. No. It would go to the local agencies that are

doing that, and probably the best example of that is State Route

91 in California. But there are other agencies that are now considering the idea of a hot lane. And the biggest thing about the hot

lane is how to identify whose car or what car it is, and are they

already registered as a prepaid customer of the toll lanes so that

they would then have their account debited for being in the hot

lane.

Senator BENNETT. Thank you. One other question. We have a

vote and I recognize that. Would you consider in all of this debate

about 80/20, 50/50, et cetera, perhaps bifurcating between New

Starts and additional expansions. The experience in Salt Lake City

has been cited. I can tell you that there was great opposition to

light rail in Salt Lake in some sectors. They were more vocal than

they were numerical, but there was a great expression of concern

about ‘‘snail rail,’’ as they called it.

I remember attending a political activity where I was the only

member of the elected delegation introduced to the crowd who did

not get an automatic standing ovation. And it was because of my

support for ‘‘snail rail,’’ and these people were sufficiently opposed

to it.

Once the North-South system was built, as Senator Sarbanes has

quoted, all of the opposition to ‘‘snail rail’’ disappeared, and suddenly everybody had been for it all along. And everybody had

thought what a wonderful idea it was all along, like people now

saying how great it is that Saddam Hussein is no longer in power,

never suggesting that they wanted to keep him in power.

It was much easier to get the local match for the extension of the

system in the East-West fashion and then up to the hospital at the

University of Utah based on the success. And, frankly, there was

more money because we did better at the fare box than any of

the initial projections had been, and we were able to pay a higher

percentage out of the fare box of the successful line in the first

instance.

28

So you do not have to commit here on the record, but think about

the possibility of maintaining the 80/20 for a New Start, and then

saying once you have achieved a certain level of success, then the

local community will be asked to come up with 50 percent, or something of that kind, if they want to expand it.

Secretary MINETA. Well, the 50/50 is only applicable to the New

Starts Program, and the 80/20 is there for the rest of the program

in public transit. So that 50 percent is only as it applies to the New

Starts Program.

Senator BENNETT. I am suggesting that you might think about

flipping that.

Secretary MINETA. I understand.

Senator BENNETT. Because it is much easier to raise money on

the basis of success than if you just have a concept that you are

trying to sell an electorate that doesn’t want to come up with the

20 percent.

Secretary MINETA. And in these other projects, we do have incentives for increased ridership to the local transit district, because we

want to give them incentives as well to improve their own service

to their localities.

Senator BENNETT. I just have to make the clear point on the

record that FTA/DOT has been fabulous to work with, that we in

Salt Lake City have been tremendously benefited by the expertise

of your agency. That preceded your coming in, but it has continued

in the period that you have been in charge, and I shouldn’t leave

the opportunity without getting that statement clearly on the

record and thanking you for all your help.

Secretary MINETA. Well, it was, without a doubt, your service at

the Department of Transportation that set the pace for all of us

who are there today.

Chairman SHELBY. Mr. Secretary, that was quite a few years

back now.

Secretary MINETA. Yes, indeed.

[Laughter.]

Senator BENNETT. The first Assistant Secretary of Intergovernmental Affairs.

Chairman SHELBY. Senator Carper. I know we have a vote, but

go ahead.

Senator CARPER. Thanks very much.

Mr. Secretary, Administrator Dorn, I am pleased to hear you indicate that you do not find favor in the proposal put forth by Senators Baucus and Grassley with respect to a bonding approach for

funding transit. I think that is a symptom, and it is a symptom of

a bigger problem, and the bigger problem is there aren’t enough resources that are available to be committed over the next 6 years

for highways or for transit. And I appreciate your statements that

this is more money than you have ever allocated before for ISTEA

or for TEA–21. But I think when we actually adjust for inflation

and for changes in demographics, we find that the resources are inadequate, and as a result, we see proposals well-intended but ultimately, I think, not very helpful that the likes of which Senators

Baucus and Grassley have put forward.

I do not want to get Administrator Dorn in any trouble today. I

do want to come back—and you have heard us visit and revisit this

29

funding question for New Starts, whether it should be 80/20, 50/

50. And I have a note here that Administrator Dorn may have said

something to the effect of this, and just correct me if I am wrong.

But if we are going to pursue a policy that high demand for Federal funding should dictate a lower Federal share, we should apply

that to highway programs as well. And I think you may have said

that in one of our hearings. I am not trying to put words in your

mouth or to get you into trouble. But if you ever said or thought

that, I just want to say I agree.

Chairman SHELBY. Thank you.

Mr. Secretary, you and Administrator Dorn have been very, very

patient.

We will continue to hold hearings on transit because it is so important, as Senator Sarbanes pointed out. We thank you for your

appearance today.

We have a second panel, and we will get into the second panel

as soon as we vote and come back.

Secretary MINETA. Thank you very much, Mr. Chairman.

Chairman SHELBY. Thank you, Mr. Secretary.

[Recess.]

Chairman SHELBY. The hearing will come back to order.

Our second panel today includes William Millar, President,

American Public Transportation Association; Jeff Morales, Director,

California Department of Transportation, who will testify on behalf

of the American Association of State Highway and Transportation

Officials; Robert Molofsky, General Counsel, Amalgamated Transit

Union; Harry W. Blunt, President, Concord Coach Lines, Concord,

New Hampshire, testifying on behalf of the American Bus Association; and Jim Seal, a Federal Transit Administration consultant.

We welcome all of you here. All of your written statements will

be made part of the record, and in the interest of time, if you would

briefly sum up your remarks, please.

Mr. Millar, we will go with you first.

STATEMENT OF WILLIAM MILLAR

PRESIDENT, AMERICAN PUBLIC

TRANSPORTATION ASSOCIATION

Mr. MILLAR. Thank you very much, Mr. Chairman, and thank

you for inviting us to the hearing today.

Having heard the opening statements of all the Members and the

subsequent concerns of the Secretary, I am almost inclined to just

say ‘‘Thank you’’ and leave it at that, but I do have just a couple

of things that I would like to add.

I certainly want to thank you for the role that you and the Committee have had in crafting TEA–21. The good news is that—and

apparently, all the Members who are here today spoke to it—TEA–

21 works. We have seen an unprecedented level of investment in

transit; the public has responded with an unprecedented growth in

the usage, and therefore, we believe that this reauthorization

should be evolutionary in nature, not revolutionary.

Chairman SHELBY. So we need more money.

Mr. MILLAR. Yes, sir, we do. And we appreciate the leadership

that you and the Committee have shown in trying to figure out the

best way to get more money, and we especially appreciate the letter

30

* Held in Committee files.

that you sent to the leaders of the Finance Committee expressing

concern about the bonding proposal.

We too share that concern. We do not believe that taking funds

from the Mass Transit Account to fund the highway program and

then trying some other way to put money in there is the right way

to go, and we thank you very much for your leadership and the

leadership of all the Committee leaders in that regard.

As I comment on SAFETEA, let me organize it around the three

basic principles that I have testified to this Committee and the

Subcommittee earlier: Grow the program, protect the guarantees,

and improve the program delivery.

First, with growing the program, as all of you said earlier today,

we simply need to have a higher level of investment. APTA has

proposed doubling the size of the investment over the next several

years. As was pointed out, the Administration’s own numbers as

well as work done by my colleagues at AASHTO, as well as independent economic analyses, all show we should be spending tens of

billions of dollars more on public transit every year than we are.

We need to see more investment, not less, and as was very clearly pointed out by the Members this morning, the SAFETEA proposal does not meet that standard.

Second, we would like to see the funding guarantees maintained.

They have been a great boon. They have brought predictability to

the program, they have provided certainty so that major projects

can go to Wall Street, get private financing to speed up the

projects, to bring them in in shorter time and with more benefit.

Without the funding guarantees, that goes away.

APTA did do a study in the last year on the benefits of the funding guarantees, and with your permission, sir, I would like to insert that in the record.

Chairman SHELBY. We will make that apart of the record along

with your testimony.

Mr. MILLAR. Thank you very much. We also have worked with

our colleagues in the transportation construction industry and in

the highway construction industry, and we have also completed a

study by the firm of Global Insight* that outlines the stimulative

effect and the good economic benefits of investments.

Mr. MILLAR. It should be pointed out particularly in this Committee that it was at the insistence of the bipartisan leadership of

this Committee in 1998 that the General Funds for the program

were included in the guarantees when others would have proposed

simply the trust fund. So again, we thank you for that work then,

and we thank you for your continued support today.

Finally, with regard to the improvements in program delivery,

our reauthorization proposal, which I previously submitted to the

Committee, carries 40 pages worth of ideas on how we might speed

up program delivery. We certainly appreciate that the Administration wishes in some ways to improve the efficiency of the program

and the distribution of the funds of the program, but we do not

think a major overhaul such as they have proposed is appropriate.

We also believe that if there are to be major changes in the

structure of the program, that should only be done with new

31

growth in the program. That way, we avoid taking away from the

existing program successes—for example, those that Senator

Santorum pointed out in his State. That way, we avoid shortcutting

those successes while we do meet priorities that have to be met—

for example, more money for rural public transportation.

In APTA’s proposal, the largest single category of increase that

we propose, some 110 percent increase, would go into rural and

small urban transportation. We have additional proposals there for

high intensity use, small urban systems and additional proposals

for bus replacement and van replacement throughout those areas.

To conclude, we certainly share the Committee’s expressed view

this morning—we can see no good policy reason to differentiate between New Starts, Federal match, and any other part of the program. We would strongly urge that we maintain the New Starts

Federal share at 80 percent.

Let me close by saying thank you, Mr. Chairman, thanks to all

the Committee, and we look forward to your questions.

Chairman SHELBY. Thank you.

Mr. Morales.

STATEMENT OF JEFF MORALES

DIRECTOR, CALIFORNIA DEPARTMENT OF TRANSPORTATION

ON BEHALF OF THE AMERICAN ASSOCIATION OF

STATE HIGHWAY AND TRANSPORTATION OFFICIALS

Mr. MORALES. Thank you, Mr. Chairman.

I appreciate the leadership that you and Senator Sarbanes are

showing on this issue and moving forward, and we certainly look

forward to working with you as the process goes forward.

I will start by agreeing with the basic premise here, which is

that the transit provisions of TEA–21 are working well and should

be continued. Clearly, the funding must grow.

AASHTO has proposed that the transit program be funded at $7.5 billion in 2004, increasing to at least $11 billion in 2009. We

also support the higher APTA-recommended level that would rise

to $14 billion, assuming that that funding can be provided as net

growth and not come at the expense of other programs.

The Administration’s proposed funding levels for transit fall substantially short of its own documented needs, based on the Conditions and Performance Report. Under SAFETEA, transit funding

would grow only from $7.2 billion to $8.1 billion, which would represent $1.1 billion below the funding level for 2003, when adjusted.

AASHTO is concerned that the SAFETEA proposal, while guaranteeing funds for the mass transit account, contains no similar

guarantee for the General Fund component of transit funding.

State and transit agencies need stable, predictable funding in order

to construct major transit projects. It is very critical that both the

Highway Trust Fund and the General Funds for transit are guaranteed in reauthorization.

I would join, I believe everyone here today in also saying we do

not support the proposed reduction of funding for New Start

projects from 80 percent to 50 percent. There is no clear policy

basis for doing so, and I would add that certainly in California’s

case, we do overmatch on many projects, both in transit and in the

highway program, which has not been discussed today, but we do

32

so on a project-by-project basis, based on what makes the most

sense. There is really no basis for making an arbitrary, across-theboard reduction in the amount of Federal funds that could go to a

given project.

One of the major moves in ISTEA and carried forward in TEA–

21 was enhancing and strengthening the local planning process,

and we should not as a matter of policy restrict that process by

making this change.

AASHTO commends the Administration for their concern with

the solvency of the mass transit account but does not support the

proposed program restructuring. SAFETEA proposes that New

Starts be funded entirely with General Funds rather than through

the Highway Trust Fund. Since General Funds would not be guaranteed under the Administration proposal, New Starts would be

vulnerable to funding reductions or elimination even during the annual appropriations process.

Also under SAFETEA, the bus discretionary funding would be

eliminated, and the Rail Modernization Program would be shifted

to the formula program.

Other alternatives exist to remedy the budget-scoring problems

which prompted these proposals, and we would be glad to work

with the Committee to find solutions.

There are several aspects of the Administration’s proposal that

AASHTO supports, including the elimination of some burdensome

Buy America certification requirements for smaller transit systems.

We do not support an exemption from Buy America but simply a

streamlining of some of the administrative burdens placed on them.

We support expediting transportation improvements by allowing

planning studies to establish the basis for an environmental assessment or impact statement under NEPA in continuation of the

TIFIA Program, with a threshold of $50 million, although we would

actually recommend that that be reduced to $25 million.

AASHTO also supports the continuation of the State Infrastructure Bank Program and recommends that it be open to all 50

States.

Rural transit needs have been discussed here today, and I would

note that AASHTO’s ‘‘Bottom Line’’ report documents the need to

double Federal rural transit assistance from the current levels, and

we support SAFETEA’s recommendation for increased funding. As

the Nation’s elderly population increases in the coming years, citizens in rural areas will need access to shopping, medical, and other

services.

With regard to the transit bonding proposal that has been discussed, AASHTO has joined APTA and other organizations in expressing support of maintaining the existing structure, and I too

want to join in thanking both you, Mr. Chairman, and the Ranking

Member for taking a leadership role and raising concerns about

this and pushing to continue their current growth.

One of the most important advances of both ISTEA and TEA–21

was the integration of the modes, and this reauthorization should

continue that trend and not reverse it. The challenge before you is

obviously how to meet the growing transit needs in this Nation as

we go forward. AASHTO has identified a menu of options that

would grow the program to the levels that we have proposed. We

33

believe that through these mechanisms, program levels of at least

$55 billion for transit and $300 billion overall for the program are

achievable and would certainly be consistent with the Senate Budget Resolution in this area.

Mr. Chairman, we look forward to working with you as this process goes forward.

Thank you.

Chairman SHELBY. Thank you.

Mr. Molofsky.

STATEMENT OF ROBERT MOLOFSKY

GENERAL COUNSEL, AMALGAMATED TRANSIT UNION

Mr. MOLOFSKY. Thank you very much, Mr. Chairman and Senator Sarbanes.

For more than 40 years, the Amalgamated Transit Union, now

numbering over 180,000 members in 46 States, has been a partner

along with the transit industry and others who are appearing before you today in helping to design and shape America’s transportation program.

Since 1964, with the first bill, this Congress—every Congress—

and, we believe, this Administration, has understood properly that

sound national transportation policy requires with it a sound national transportation labor policy. It is that partnership between

transportation, labor, and industry in the communities in which

our members live and serve that we believe have been the cornerstone for the development of strong, well-funded, well-implemented,

and well-operated transit services from the start of the program

back in the early 1960’s to the present.

We have previously submitted to the Committee a very comprehensive proposal regarding TEA–21 reauthorization. It is entitled, ‘‘Next Stop—Real Choices: Moving America Safely.’’ And it is

those principles captured in the title of our proposal that we

brought our review of the Administration’s proposal to make sure

that at every step in our review, funding was appropriate to make

sure that the Nation’s services were maintained and expanded as

needed, that the service was secure, and that it was safe.

In looking at the Administration’s bill, we too share, like others

before you, concerns with the funding levels. Simply stated, there

is not enough money in this bill to provide for the necessary transit

services and to do it the right way in all communities, rural and

urban alike, and to make sure it is safe and secure.

We share the concerns of yourselves and others on the Committee with respect to the funding levels, the focus on guarantees

as opposed to the proposed numbers without guarantees, which is

an artificial way of describing the bill by not pointing out the real

dollars that would ultimately flow. The changes that have been

proposed in the Bus Capital Program and the JARC Program to

formularize it as opposed to allocate it, we disagree with, and also

the restructuring, which includes the JARC Program.

Looking at the Administration’s bill, we do believe it is a sound

platform upon which to go forward. It recognizes that we are well

beyond the debate of linking highways and transit in both the planning and operating programs, and it does seek to address some of

our pressing security needs.

34

I would like to mention and highlight several program issues

that we have set forth in our proposal that can enhance the concerns, both funding and safety and security, which have come up

today.

I might say, Mr. Chairman, that when I joined the ATU in the

early 1980’s, one of my first trips was to Alabama to see if the

State legislature could approve and extend the beer tax, which at

that time was funding transit in Birmingham. We did not get it,

but it does underscore ATU’s interest, transit, labor, and the communities in which we live, the need to have a strong opportunity

to lobby and secure State funding along with the Federal dollars

that are put forth. And for that reason, we have proposed a socalled FIG Program, or Federal Incentive Grant Program, that

would seek to provide incentives to States based on their ability to

secure increases in State dollars for transit, and we have a menu

of incentive grant dollars that would flow depending on whether

they increased funding, created new sources of funding or, most

significantly, opened up their existing trust funds which dating

back to the 1930’s, were dedicated for highway projects only, without an ability to be used for transit projects.

We believe there should be a strong voice and a dedicated

representative serving on the State and local MPOs, involving all

constituent groups that benefit from transit services.

In the security area, we have identified a number of initiatives

that we think are vital and critical to making sure our systems are

safe. It is not enough to do surveys and develop best practices;

there needs to be money, and there needs to be a requirement that

every, single transit property develop safety and security plans and

provide training—and, with all due respect, not just to first-line supervisors but to those who are on the street when problems arise,

and that is the operating personnel and those who operate and

maintain the services.

We support the Parks Expansion Program and the proposals by

CTA, APTA, and others for expansion in the rural areas.

I would like to just close with several comments on three additional programs. One, we think there should be a targeted program

for workforce training. Technology has brought this industry far

along, from the horsedrawn cars to the kinds of equipment in place

today. There needs to be a dedicated targeted program to provide

transit systems with funds to train the workforce. It is a security

issue, it is a service issue, it is a safety issue.

Two, if ridership is of concern, as it is to everybody, we think

there should be an increase in the commuter benefit tax from 100

to 190. S. 661 has been offered, and we support it.

Third, we think the charter regulations which have been in place

since the mid-1980’s make no sense. They are burdensome and

complex. I do not think they continue today to address the realworld issues that confront us today in our communities. In effect,

they limit almost to the point of absurdity the ability of public systems to provide limited services to the nonprofits and government

agencies who might need those services on a limited basis. We

know the private sector has some real concerns about it, and I believe that with this Committee’s support, we can, through discussions with those representatives, develop a better system that is

35

* Held in Committee files.

less adversarial and provides more certainty to all parties, enabling

them to provide the services that are needed.

Finally, we will be prepared as always to answer any questions

you may have.

Thank you very much.

Chairman SHELBY. Thank you.

Mr. Blunt.

STATEMENT OF HARRY W. (WOODY) BLUNT, JR.

PRESIDENT, CONCORD COACH LINES

CONCORD, NEW HAMPSHIRE

ON BEHALF OF THE AMERICAN BUS ASSOCIATION

Mr. BLUNT. Thank you, Senator Shelby, Senator Sarbanes.

Intercity buses carry 774 million passengers each year and, unlike other modes, we do it with minimal Government subsidy. We

transport more people in 2 weeks than Amtrak carries in an entire

year. Scheduled intercity buses serve 5,000 communities daily,

compared to 521 served by Amtrak and 536 served by the airlines.

Chairman SHELBY. Say that again, please.

Mr. BLUNT. Intercity buses serve 5,000 communities across

America on a daily basis. Amtrak services 521 cities, and the commercial airline industry services 536.

Chairman SHELBY. And what about the number of passengers

relative to all those?

Mr. BLUNT. Seven hundred seventy-four million passengers; I believe Amtrak carries about 30 million passengers, and the airline

industry, in the range of 600 million passengers annually. It was

600 million and growing, but obviously, it is pretty stable now.

A Nathan Associates report* shows that from 1960 to 2001, Amtrak received a total net Federal subsidy of $57.96 per passenger

carried. Commercial airlines received $6.07 per passenger carried.

But intercity, regular-route, scheduled passengers received only 8

cents per passenger in Federal subsidies.

We applaud the Administration’s SAFETEA proposal. It is a

great first start, and the proposal begins to recognize the potential

of intercity bus. But we do have a couple of recommendations.

SAFETEA continues the ADA Wheelchair Lift Program for inter- city buses, providing $7 million in funding for private operators.

But with the annual cost estimated by the TRB to be closer to $40

million, $7 million just is not enough.

SAFETEA includes a first-ever Intermodal Passenger Facilities

Grant Program that helps to build facilities and ensure coordination between intercity bus and other modes. This is an essential.

People should not have to go to another part of town, or the wrong

part of town, to get on a Greyhound or Trailways bus.

Our industry at times has been given a bad reputation because

of cities not providing good terminals. This city, Washington, DC,

is a classic example of that, with a beautiful train station, and the

bus terminal relegated to a poorer part of town.

SAFETEA also provides more funding for rural, over-the-road

bus programs, which help to restore service to rural communities

that often have no other form of public transportation. However,

36

we are concerned that States could choose to divert those funds.

DOT failed to propose in its reauthorization program an essential

bus service system for service between nonurbanized areas and hub

airports and secondary airports. We believe that this would be a

good alternative in some cases to essential air service.

However, on the top of our list in reauthorization is the subject

of transit competition. It simply does not make sense to use transit

buses subsidized by Federal tax dollars to conduct a sightseeing

service or to ferry people to golf outings. There are thousands of

private intercity operators to perform that service. It is akin to asking the local fire department workers to paint houses because they

already own ladders and have ladder trucks that are quite often

not being used.

In a nutshell, these are our concerns. FTA refuses to fine transit

agencies in violation of the present law. The FTA is conflicted to

both fund and also regulate transit organizations.

DOT proposed a new loophole under SAFETEA that will allow

transit charters if they provide service to the elderly. The elderly

are 50 percent of the private sector charter market, and transits

now want to, as my colleague has mentioned, gut the regulation entirely. We cannot compete with these heavily subsidized agencies

when the deck is stacked against us.

In closing, Mr. Chairman, I would like to take a moment to tell

you about a letter that I have had on my desk for 17 years, a wonderfully simplistic letter from a third grade class that went on a

bus ride to connect to a plane ride. This was a very special plane

and bus ride, because the mom of one of the children on this bus

had arranged the trip to go to Florida and the Kennedy Space Center so that the class could watch that mom, Christa McAuliffe, become the first teacher in space on the Challenger shuttle.

Tragically, this letter was written in the days that followed the

Challenger disaster, but it brings to total clarity what we talk

about here today. This Nation is about discovery and exploration

and human experience, good and bad. Our mobility allows us to

discover and explore all facets of our transportation system, from

a bus to a plane to a rocket, and represents an important link in

that transportation and that mobility. The links of the chain make

us strong as a Nation, but we need all of those links, and none can

be ignored.

Thank you, and I will be glad to answer questions.

Chairman SHELBY. Mr. Seal, we have another vote and what

after that, we are not sure, on the floor. Can you sum up in a couple minutes?

STATEMENT OF JIM SEAL

FORMER CONSULTANT, FEDERAL TRANSIT ADMINISTRATION

Mr. SEAL. Sure. Thank you, Mr. Chairman.

I was a consultant to FTA in the 1980’s on public-private partnerships. I am not representing FTA today.

I wanted to point out that the proposed SAFETEA legislation

does move forward by putting the emphasis on the individual customer, and this will go a long way toward an outcome-based Government. It recognizes that nonincentive-based Government cannot

always achieve policy outcomes.

37

The proposed legislation recognizes that we can achieve congestion relief with the scarce use of resources proposed, and we understand that budget growth is important but not only relying on

budget growth. And I think the centerpiece of that is certainly the

incentive program, which can go a long way toward reducing congestion and providing cost-effective services.

We also applaud including other parties and other providers as

grant recipients in the new planning stage, and this will bring forward new, innovative transportation programs.

In California, we have a contrast of those who rely on competition and those who are more centrally oriented. In San Diego, I

would like to report that from 1979 to 2001, in inflation-adjusted

costs, San Diego Transit has reduced its costs by 34 percent. In

Santa Clara County, the opposite has taken place, where costs

have increased by 18 percent after adjusting for inflation—and this

does have an impact on transit. The more cost-effective it is, the

more service can be provided.

We believe that as many barriers as can be eliminated to provide

service cost-effectively is the way to go, one area being the labor

protection, 13(c). Certainly, it was called for when there were no

State labor bargaining rights. Today, to use that to expand into the

JARC and the Administration’s New Freedom Initiative would stifle innovation, and by definition, this is new service, and new service has no impact on existing employees. This should be taken into

consideration in the legislation.

Thank you very much.

Chairman SHELBY. Gentlemen, we appreciate all of your testimony, and we hate to hurry like this. I have a number of questions

for the record for all of you, and I am sure Senator Sarbanes and

others might have questions as well. We will get those to you as

soon as possible.

We appreciate your participation. I think we are hearing you

loud and clear today, and we thank you very much for appearing.

The hearing is adjourned.

[Whereupon, at 12:35 p.m., the hearing was adjourned.]

[Prepared statements, responses to written questions, and additional material supplied for the record follow:]

38

PREPARED STATEMENT OF SENATOR JON S. CORZINE

Mr. Chairman, thank you for calling this hearing to discuss the Administration’s

proposal for the reauthorization of TEA–21 known as the Safe, Accountable, Flexible, and Efficient Transportation Equity Act, or SAFETEA. I welcome Secretary Mineta as well as the other witnesses appearing before the Committee today and look

forward to their testimony.

Mr. Chairman, I have strong doubts that SAFETEA will be sufficient to meet the

needs facing our Nation’s mass transit infrastructure. The challenges posed by increased ridership and an aging rail and bridge network require a strong level of financial commitment from the Federal Government. Unfortunately, I cannot find

that level of commitment in this proposal. SAFETEA proposes $45.7 billion in mass transit spending over the next 6 years.

I believe that this is an inadequate amount. It represents a 1.2 percent cut from

the amounts authorized under TEA–21, when adjusted for inflation. And it falls well

below the $56.5 billion that the Senate included in its budget resolution that passed

Congress in the spring.

Mr. Chairman, in the 2002 ‘‘Conditions and Performance Report,’’ the Department

of Transportation reported that we need an annual total investment from Federal,

State, and local governments of $14.84 billion in transit to maintain conditions and

performance at current levels and $20.62 billion to improve both conditions and performance. The only way to do this, under the Administration’s proposal, is to pass

the costs on to our cash-strapped States and municipalities. I do not believe that

we should do this.

In addition, I am concerned about the Administration’s proposal to eliminate the

minimum guarantee of mass transit funding that comes from general revenue. This

proposal would remove the guarantee that protects the General Fund portion of the

transit program and leave this amount subject to the appropriations process. In today’s tight appropriations environment, I am concerned Congress will be unwilling

or unable to make up the difference between the authorized and guaranteed levels.

Finally, I would like to address the Administration’s proposal as it relates to the

New Starts Program. First of all, I do not believe that we should eliminate the Bus

Discretionary program in order to help pay for the New Starts Program. If we do

so, we are robbing Peter to pay Paul. But I am also deeply opposed to any proposal

that would cap New Starts Federal funding at 50 percent, instead of the current

80–20 Federal-State split. We do not make the same requirement of highway funding and I believe that if we enact this proposal, we will encourage States to choose

highway projects over mass transit projects.

Mr. Chairman, my own State of New Jersey is the second largest recipient of New

Starts money in the Nation. The New Starts Program funds the ongoing NewarkElizabeth and Hudson-Bergen light rail projects. These projects will need funding

during the life of the next TEA–21 legislation. In addition, I will be seeking funding

to help construct a new rail tunnel under the Hudson River. I can tell the Committee that changing the Federal/State split will place a huge burden on New Jersey

to find additional funding for these worthy projects.

Mr. Chairman, I look forward to working with the Committee and the Administration to create better legislation that will meet our Nation’s transit needs. Thank you

very much.

—————

PREPARED STATEMENT OF SENATOR DEBBIE STABENOW

Mr. Chairman, thank you for holding this hearing on the Administration’s

SAFETEA proposal.

Ensuring safe and efficient public transportation is one of the most critical issues

that we face as Members of this Committee. I look forward to working with the

Chairman, and all Members of this Committee, as we craft a strong mass transit

title to the upcoming TEA–21 reauthorization this year.

Michigan is known as an automobile State. We take pride in producing and driving our cars. However, Michigan also has tremendous mass transit needs. In the

year 2002 alone, Michigan buses carried over 88 million passengers.

There are bus systems operating in every one of Michigan’s 83 counties, from the

urban Wayne County to rural counties in the Upper Peninsula. Despite covering all

counties, service in many areas is minimal, creating a real hardship for working

families who cannot afford to own a car.

Last month, a Detroit News series chronicled how underfunded transit systems

impact working famities. The article followed Detroiter Karen Gholston, who stands

at the bus stop every morning at 3:30 a.m. with her two-year-old daughter in one

39

hand and a can of pepper spray in the other, waiting to catch a bus for her 6 a.m.

class.

Despite the fact that her class is only 12 miles away, it takes Karen two and a

half hours to get there because the bus only runs once an hour, and is often late

or does not come at all.

Being late too often could cost Karen a spot in the pre-engineering program at

Focus:HOPE, ending her dream of escaping from her $400-a-month Government assistance by becoming a mechanical engineer for an auto company. How can we expect working mothers to become independent from Government assistance programs

when we do not provide adequate public transportation to get them to their jobs and

classes?

Mass transit plays a critical role in Michigan’s economy, not only by creating

thousands of jobs, but also by providing critical services for Michiganders who cannot afford to own a car. For example, 78 percent of jobs in metro Detroit are 10

miles or more from downtown, more than twice the national average, making public

transit critical for working families.

Given Michigan’s and the Nation’s growing transit needs, I have serious concerns

about the Administration’s SAFETEA proposal.

First, SAFETEA not only fails to grow the transit program, but it also in effect

cuts funding from the prior TEA–21 authorization bill. TEA–21 provided $36 billion

in guaranteed funding over a 6-year period, which was a 50 percent increase over

the $24 billion actually appropriated under the prior ISTEA authorization.

However, the Administration’s proposal only provides $37.6 billion in guaranteed

funding, which is a 7.6 percent cut from TEA–21’s guaranteed funding level when

adjusted for inflation.

The SAFETEA proposal also eliminates the guaranteed funding for the General

Fund portion of the transit program. Currently, 20 percent of the mass transit program is funded from the General Fund and this entire amount is guaranteed for

transit funding. SAFETEA eliminates this funding guarantee, forcing transit to

compete for 20 percent of its funding in a very tight and difficult budget.

Finally, the Administration’s proposal eliminates the 5309 Bus Discretionary program. As a representative of a State that relies solely on bus systems for its public

transit needs, I find this particularly alarming.

According to the Michigan Department of Transportation (MDOT), Michigan’s estimated transit capital and operating needs total nearly $1.5 billion over the next

6 years, and much of this capital investment is needed to simply keep up existing

service even though ridership is increasing.

Under TEA–21, Michigan received over $124 million under the 5309 Bus Discretionary program, but our capital needs for buses, facilities, and equipment exceeded

$600 million for that same time period.

This shortfall exists despite the significant contribution by Michigan taxpayers.

Michigan ranks 6th, behind five States with rail, in direct support for its public

transit systems.

Eliminating the Bus Discretionary program, will assure that Michigan will fall

further and further behind in meeting its public transit needs. Michigan, already

ranks last in Federal transit funding among the Great Lakes States, and only receives 43 cents back on every transit dollar it contributes to the highway trust fund.

I am pleased to be here today as we begin our work on improving our mass transit programs. I hope to be able to work with my colleagues on this Committee to

help States like Michigan, increase access to public transportation, which will improve our economy and our quality of life.

Thank you.

—————

PREPARED STATEMENT OF SENATOR ZELL MILLER

I appreciate Chairman Shelby and Senator Sarbanes for organizing today’s hearing to discuss the public transit aspects of the Administration’s proposal

SAFETEA—Safe, Accountable, Flexible, and Efficient Transportation Equity Act.

The current highway and transit legislation, TEA–21, expires September 30 of this

year. Today’s hearing is timely and the issues are important to the people of Georgia and this Nation.

During TEA–21, Georgia received about $777 million for transit over the past 6

years. The Administration proposal provides $45.76 billion for transit over the next

6 years and $37.6 billion in guaranteed funding. But the ridership has outpaced the

available resources and the need for the efficient transportation is still unmet.

40

As a former Governor during the inception of the Intermodal Surface Transportation Efficiency Act (ISTEA) in 1991 and TEA–21 in 1998, I know well the benefits

and importance of a long-term, holistic approach to addressing the numerous transportation challenges of large metropolitan, nonattainment areas as well as rural

areas in need of alternatives to safely and efficiently transport people to and from

work, school, grocery stores, and medical centers. With the need outpacing the current resources, I look forward to Secretary Mineta’s and the other witnesses’ testimony about the funding levels in SAFETEA and retaining important flexibility,

minimum guarantees, and firewalls that State transportation planning organizations currently enjoy.

—————

PREPARED STATEMENT OF SENATOR RICK SANTORUM

Thank you, Mr. Chairman, for holding this hearing on the reauthorization of the

Transportation Equity Act for the 21st Century and hearing testimony on the Administration’s proposed Safe, Accountable, Flexible, and Efficient Transportation

Equity Act (SAFETEA).

When it comes to transit, I come from a State that has it all. Pennsylvania has

small transit operators running bus service in rural north central Pennsylvania as

well as the large systems in Pittsburgh and Philadelphia that include existing rail

and New Start proposals. I have medium-size operators in at least one small urban

area that is considered high-intensity for transit. My State also has a large population of seniors.

As one of those responsible for the creation of the Job Access and Reverse Commute program in TEA–21, I am interested in the impact of proposed changes to the

administration of the program contained in the Administration’s SAFETEA proposal. I am skeptical about the proposed formularization of the program and take

very seriously concerns that formularization will spread the program’s resources too

thinly and undermine JARC’s effectiveness. During my tenure in Congress, I have

been active in Congressional efforts to reform welfare and assist recipients in transitioning from welfare to work. The JARC program has been a critical tool in assisting

families in that transition. I will work to ensure that JARC remains an effective

program that complements other Federal efforts to help build independence for more

of our citizens.

I am also interested in how the Administration proposes to provide better transit

service to our constituents by improving coordination among different providers of

transit and other social services as well as proposed incentive programs.

I note with particular concern the Administration’s proposal to reduce the New

Starts Federal match from the current ratio of 80 percent Federal, 20 percent nonFederal to 50/50. Not only does this recreate the gap that was intentionally closed

in previous Federal transportation laws between highway and transit matching fund

levels, I fear that the proposed 50/50 match will discourage large and potentially

beneficial projects. You could well have a situation where larger projects that have

the ability to really transform communities will take a back seat to minimalist

projects that require less non-Federal share money. The 50/50 proposal would also

have a negative impact on my State.

As Congress and the Administration work to provide an adequate level of funding

to our transportation needs, I have also been made aware of concerns regarding a

proposal circulating in Congress for changing the financing system for transit. The

proposal currently being referred to as Grassley-Baucus would in many ways shift

the financing for transit to a bonding system. There is a real concern about breaking

with the current system that funds transit and highways for the most part from

Federal gas taxes. As a Member of both the Finance and Banking Committees, I

intend to work to ensure that any system used to finance our transportation projects

preserves the best aspects of, current transportation law, including equitable treatment for transit and the multiyear reliability of funding so crucial to effective longterm planning.

I look forward to hearing the testimony of today’s witnesses.

—————

PREPARED STATEMENT OF SENATOR JACK REED

Mr. Chairman, I want to join you in welcoming Secretary Mineta and our other

witnesses to today’s hearing on the reauthorization of TEA–21.

I am pleased to have a chance to discuss the Bush Administration’s TEA–21 proposal and get the input of transit operators, employees, and riders.

41

This hearing is proof that transit is a mainstream issue because transit is the

fastest growing mode of transportation, and, in no small measure, transit is now

vital to cities like Denver, Salt Lake City, Dallas, Atlanta, Miami, and Charlotte

that previously never cared about buses or light rail.

While I have some strong disagreements with the SAFETEA proposal put forth

by the Administration, I want to thank the Secretary for his leadership in preserving the four-to-one balance between highways and transit, maintaining transit

is share of the Federal gas tax and preserving the flexibility of TEA–21. Indeed, this

bill continues his longstanding support for a balanced, national, intermodal transportation policy.

However, I continue to have three major concerns with the Administration’s bill:

(1) the failure to provide new resources for transit, and even highway improvements

for that matter, (2) the failure of SAFETEA to guarantee transit funding, and (3)

the failure of SAFETEA to offer specific funding for transit security needs. On this

last point, I am particularly concerned that OMB chose to ignore these needs, particularly in light of the Sarbanes-Reed GAO report which found that just 8 transit

properties estimated they needed $700 million to protect themselves from terrorism.

I recognize the White House’s view that terrorism is the Department of Homeland

Security’s job, but the provision of $65 million to the Nation’s top 20 transit properties, while welcome, is insufficient and must be addressed if we are truly to call

the reauthorization of TEA–21 ‘‘SAFETEA.’’

It is my hope that working with Chairman Shelby, Senators Sarbanes, and Allard

we will be able to craft a bipartisan bill that recognizes that TEA–21 works as long

as there are sufficient resources available to meet the Nation’s growing needs. However, the clock is running, and I am concerned that the OMB’s decision to severely

limit needed investments in our transit and highway systems as well as the Administration’s delay in getting its bill to the Congress makes the job of enacting a reauthorization bill less, rather than more, likely.

Thank you, Mr. Chairman.

—————

PREPARED STATEMENT OF NORMAN Y. MINETA

SECRETARY, U.S. DEPARTMENT OF TRANSPORTATION

JUNE 10, 2003

Chairman Shelby, Senator Sarbanes, and Members of the Committee, thank you

for the opportunity to appear before you today to discuss the Administration’s proposal to reauthorize our surface transportation programs—the Safe, Accountable,

Flexible, and Efficient Transportation Equity Act of 2003, or ‘‘SAFETEA.’’

Nothing has as great an impact on our economic development, growth patterns,

and quality of life as transportation. This is equally true at the national, State, and

local levels. A safe and efficient transportation system is critical to keeping people

and goods moving and cities and communities prosperous. Reauthorization will supply the funds and the framework for investments needed to maintain and grow our

vital transportation infrastructure. In addition to improving the quality of our lives

and enhancing the productivity of our economy, our proposed legislation seeks to

place a central focus on transportation safety.

Under SAFETEA, States would receive more resources to address their own,

unique transportation safety issues; would be strongly encouraged to increase their

overall safety belt usage rates; and would be rewarded for performance with increased funds and greater flexibility to spend those funds on either infrastructure

safety or behavioral safety programs. With the increased funding, States would be

encouraged and assisted in their efforts to formulate comprehensive safety plans.

Our Nation’s transportation system obviously faces significant challenges in other

areas as well. Our proposal will create a safer, simpler, and smarter Federal surface

transportation program by addressing transportation problems of national significance, while giving State and local transportation decisionmakers more flexibility to

solve transportation problems in their communities.

SAFETEA calls for a record Federal investment in surface transportation, spend- ing over $201 billion on highway and safety programs, and nearly $46 billion on

public transportation programs, from fiscal year 2004 through fiscal year 2009.

Building on the Legacies of ISTEA and TEA–21

Thanks in large part to the hard work of many of you and your predecessors,

SAFETEA builds on the tremendous successes of the prior two surface transportation reauthorization acts. Both the Intermodal Surface Transportation Efficiency

Act of 1991 (ISTEA), with which I am proud to have played a role, and the TransVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00045 Fmt 6621 Sfmt 6621 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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portation Equity Act of the 21st Century (TEA–21), provided an excellent framework

to tackle the surface transportation challenges that lie ahead.

ISTEA set forth a new vision for the implementation of the Nation’s surface transportation programs. Among other things, ISTEA gave State and local officials

unprecedented flexibility to advance their own goals for transportation capital investment. Instead of directing outcomes from Washington, DC, the Department

shifted more of its focus to giving State and local partners the necessary tools to

solve their unique problems while still pursuing important national goals.

SAFETEA not only maintains this fundamental ISTEA principle, but it also goes

further by giving States and localities even more discretion in key program areas.

TEA–21’s financial reforms have proven equally significant. By providing certainty, predictability, and of course, increased funding, TEA–21 paved the way for

State and local transportation officials to undertake strategic transportation improvements on a record scale.

TEA–21 achieved this by reforming the treatment of the Highway Trust Fund to

ensure that, for the first time, spending from the Highway Trust Fund for infrastructure improvements would be linked to tax revenue. The financial mechanisms

of TEA–21—firewalls, Revenue Aligned Budget Authority (RABA), and minimum

guarantees—provided greater equity among States in Federal funding and record

levels of transportation investment. SAFETEA maintains the core TEA–21 financial

structure, while moderating the wide swings in program levels that resulted from

the RABA mechanism. In addition, we are proposing that RABA apply to public

transportation programs, as well as highway programs.

Funding for Public Transportation Programs

SAFETEA is the largest proposed Federal commitment in the history of public

transportation, representing a 28 percent increase over the funding levels of TEA–

21. SAFETEA continues to fund transit programs through both General Fund appropriations and funds available from the Mass Transit Account of the Highway

Trust Fund. Historically, approximately 80 percent of the funding for transit programs has been provided from the Mass Transit Account, with the remaining 20

percent coming from the General Fund. Under current accounting practice, the Federal Transit Administration’s (FTA) split-funded accounts are drawn-down (or

outlayed immediately) and placed in the General Fund. This results in the premature depletion of the Mass Transit Account, and would bankrupt the account by

2007 if not corrected.

SAFETEA addresses this issue by funding as many programs as possible from a

single source, while maintaining the overall approximate proportion (80/20 percent)

of funding between the Mass Transit Account and the General Fund. In particular,

we propose to fund formula programs and research activities entirely from the Mass

Transit Account; to fund the FTA Administrative account entirely from the General

Fund; and to split-fund only the New Starts Program. By minimizing the number

of split-funded accounts, we significantly reduce the draw-down rate of the Mass

Transit Account, thus avoiding the depletion of that account.

In addition, funds from the Mass Transit Account would be guaranteed by budgetary firewalls. Beginning in fiscal year 2006, authorizations for public transportation funding from the Mass Transit Account of the Highway Trust Fund will be

adjusted (increased or decreased) whenever the mass transit firewall amount is adjusted to reflect actual receipts or more recent estimates of Mass Transit Account

revenue. That is to say, the budget authority will be aligned with the revenue. The

adjustment would be applied proportionately to all Federal transit programs receiving funding from the Mass Transit Account. Adjusting public transportation program funding levels each year to reflect the latest information on receipts into the

Mass Transit Account is critical to ensuring that all of the dollars actually collected

will be spent on transit programs.

We are well aware that funding issues are and will continue to be a matter of

debate. As that debate progresses, it should not be permitted to cloud a meaningful

and necessary discussion of the many programmatic reforms contained in

SAFETEA, especially reforms of public transportation programs.

Commonsense Transit Solutions

SAFETEA promotes commonsense transit solutions by reducing the number of different program ‘‘silos’’ and formularizing all programs except New Starts. This will

give States and localities the flexibility they need to fund local priorities. We want

States to maximize mobility and create a seamless community transportation network, not try to match projects to specific pots of money.

Stable formula funds help agencies do more with limited resources because they

give financial markets the confidence to support transit investments; give commuVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00046 Fmt 6621 Sfmt 6621 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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nities an incentive to commit long-term resources; and give community developers

the confidence that the transit commitments necessary to support new development

will be honored.

In light of these important benefits, SAFETEA proposes a shift to dependable formula and capital funding and a larger New Starts Program by restructuring FTA

programs into three major categories:

• Urbanized Area Public Transportation Formula Grants Program; • Major Capital Investment Program; • State Administered Formula Grant Programs, which include Other than Urbanized (rural) Areas; Special Needs of Elderly Individuals and Individuals with Disabilities; Job Access and Reverse Commute; and the New Freedom Initiative.

Urbanized Area Public Transportation Formula Grants Program

Under SAFETEA, urbanized areas will have increased flexibility and more predictable funding. By folding a portion of the former bus discretionary program into

the formula program, we propose to ensure that every community can count on a

share of these funds each year, improving their ability to make longer-term investment plans and to acquire financing for these plans, if necessary.

We also propose to move the Fixed Guideway Modernization Program from the

Capital Investment Grant Account to this formula program. In doing so, we do not

propose to change either the funding level for this program or the formula used to

distribute these funds. However, we will accomplish the important goal of increasing

local flexibility and administrative ease in the use of these funds from year to year.

As you may be aware, some communities find that their need for Fixed Guideway

Modernization Funds can vary substantially from year to year, and the priority they

give to other investments also varies.

Communities should have the flexibility to merge Fixed Guideway Modernization

Funds with their regular urbanized area formula grant, so that they can make more

prudent, cost-effective investment decisions. In one year, for example, they may

choose to invest more in buses; while the following year, they may require a larger

expenditure on rail modernization projects. We believe that local decisionmakers

should have the flexibility to make long-term investment plans that are not driven

by the old programmatic silos. Furthermore, by funding these programs from the

same account, a grantee would submit just a single application for bus or rail ongoing capital needs and preventive maintenance.

Major Capital Investment Program

Under SAFETEA, the Major Capital Investments Program would be limited to the

New Starts Program, but would expand that program to provide capital assistance

for new nonfixed guideway corridor systems and extensions that meet the New

Starts criteria, as well as new fixed guideway systems and extensions. Under the

6-year SAFETEA authorization, $9.5 billion would be made available for the New

Starts Program, an increase of 55 percent over the TEA–21 funding level of $6.1

billion. This increase is necessary to ensure that there is adequate funding to meet

existing Full Funding Grant Agreements (FFGA) and other meritorious projects in

the pipeline. Approximately 20 percent of the funds for this program would be available from the Mass Transit Account of the Highway Trust Fund with the remaining

80 percent appropriated from the General Fund. Projects seeking $25 million or less in New Starts funding would no longer be exempt from the evaluation and rating process. Unfortunately, experience has demonstrated that early project estimates can be inaccurate. On numerous occasions,

project sponsors who intend to seek funds without participating in the project evaluation process suffer serious set backs when they determine that they do, in fact,

require more than $25 million in funding from New Starts. Moreover, small projects

that proceed without adequate attention to ridership and financial projections may

find themselves in financial difficulty. In addition, elimination of this exemption will

deter project sponsors from dividing corridor transportation systems into artificially

small segments in order to avoid the New Starts evaluation process. Under our proposal, any project that seeks Federal New Starts funds will be required to participate in the New Starts evaluation and rating process.

At the same time, we recognize that the complexity of New Starts projects can

vary considerably. Therefore, we are proposing that projects requesting less than

$75 million be subject to a simplified New Starts process. We would utilize the same

evaluation criteria established by Congress for projects seeking more than $75 million in funding from New Starts, but reduce the number of New Starts hurdles and

simplify the evaluation process for these projects.

FTA has, for a number of years, encouraged project sponsors to lower their Federal share requests in order to be competitive with other projects in the New Starts

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pipeline. Over the last 10 years, the overall New Starts share for projects with

FFGAs has averaged approximately 50 percent. SAFETEA would statutorily set the

maximum Section 5309 share for a New Starts project at 50 percent. However, 30

percent of the project cost could be from other Federal funds that are eligible to be

expended for transportation. This requirement would encourage New Starts sponsors to develop projects with the highest feasible local share and allow us to fund

a greater number of meritorious projects in the future. In addition, it gives communities an even greater stake in ensuring that the return on investment in these

projects is as high as possible.

Finally, the Administration has proposed to expand New Starts eligibility to permit the funding of cost-effective, nonfixed guideway corridor transit systems. FTA

has always funded meritorious public transit projects, but the current statute restricts New Starts funds to projects that utilize a fixed guideway. Fixed guideway

projects are critical to public transportation, and they will continue to be eligible

for funding, but worthy projects that propose lower-cost nonfixed guideway solutions

also deserve consideration. With today’s technology—particularly bus rapid transit—

a fixed guideway is often not the most cost-effective method of providing new or expanded corridor systems. The current rules encourage communities to choose a more

expensive fixed guideway system in order to qualify for a New Starts grant.

Moreover, some small and medium-sized communities that would benefit enormously from the creation of some new transit options simply cannot generate

enough riders or travel-time savings to justify a more expensive fixed guideway system. We will work closely with Congress and with all of our stakeholders to ensure

that, as we make room for these cost-effective, nonfixed guideway transit solutions,

we do not compromise the intent of the New Starts Program.

State-Administered Formula Grant Programs

SAFETEA also seeks to promote common sense transit solutions by giving States

and communities the opportunity to determine how they can best serve populations

that rely heavily on public transportation, including many rural residents, older

adults, persons with disabilities, and low-income riders.

Currently, an estimated 40 percent of rural counties have no public transportation, and in many other rural areas, only limited service can be provided. Yet,

rural residents rely heavily on public transit when it is available. Therefore, like

the urbanized area program, we are proposing to allocate the nonurbanized area

share of the bus program by formula instead of unpredictable discretionary grants.

We believe the increased stability and predictability of funding that this change produces will make it easier for States to plan for public transportation investments

and to leverage Federal dollars. Almost $2.3 billion will be provided over the life

of SAFETEA for the nonurbanized formula program, an 87 percent increase over the

TEA–21 level.

The absence of predictable funding has frustrated many States that want to leverage other transportation resources provided at the State level through such health

and human service programs as Medicaid. In one northeastern State, for example,

the State Department of Transportation knew it had a solution to helping thousands

of welfare recipients who could work, but were not able to get to work. The State

could make its program funds go twice as far if they could get a Job Access grant

from FTA, matching it with State Temporary Assistance to Needy Family (TANF)

funds for transportation services. But there was no assurance that the Job Access

funds were really coming. In fiscal year 2002, Job Access and Reverse Commute

(JARC) projects were earmarked in law, and this particular State project was not

among them. As a result, the State Department of Human Services obligated its

funds to other services.

To address these problems, SAFETEA proposes to allocate by formula to States

all of the funds for transit programs that should be closely coordinated with human

service programs in a State. We believe that, if States and communities are to effectively meet public transportation needs, we must provide dependable resources and

eliminate the barriers to effective coordination. Our proposal will continue the Elderly and Persons with Disabilities Program that is currently administered as a formula program to States, and it will create a similar formula allocation of funding

for the President’s New Freedom Initiative.

The New Freedom Initiative will provide new transportation services for persons

with disabilities that go beyond the requirements of the Americans with Disabilities

Act. In addition, SAFETEA will make the JARC program a State-level formula program. Currently, JARC is administered as a national competitive discretionary

grant program, and, typically, many projects are designated in appropriations conference committee reports. The JARC program has proven its effectiveness; it should

45

be made more widely available and provided through a stable, predictable funding

mechanism.

Even with predictable funding for these important services, we know that finding

solutions that work is not always easy. To help ensure that communities can make

informed decisions about priorities and needs, we are also increasing the funds

available for planning, administration, and technical assistance. We want the coordinated health, human service, and transportation planning that have been so

successful in the Job Access program to become a common practice in every community. As a result, we are asking communities to establish community-wide funding

priorities and a coordinated plan for services to the elderly, persons with disabilities, and low-income populations. These plans will give each community more control over its transit planning and make it easier to avoid the creation of costly, duplicate transportation systems. And, as long as the funds are used to serve the intended populations, we intend to ensure that the flexibility to leverage the funding

for all of these programs exists.

We look forward to more success stories like that of the Virginia’s Northern Shenandoah Valley Public Mobility Project, which formed a coalition of 15 human service

and nonprofit organizations to coordinate transportation services for their clients.

These clients include individuals with mental or physical disabilities, elderly individuals, and individuals participating in back-to-work programs. Through a coordinated transportation service delivery plan, the number of monthly trips increased

by 58 percent, and the costs dropped by almost 18 percent per trip. The bottom line

is that we want to let communities implement common sense solutions that will promote independence and economic opportunity—solutions that will save money, and

result in more and better service to more riders.

Performance Incentives

Consistent with the President’s call for customer-focused, outcome-oriented Government, SAFETEA includes a new ridership-based performance incentive program

to encourage A+ performance in transit. The program will be relatively small for the

first year—$35 million in urbanized areas and approximately $3 million in rural

areas. Over the course of SAFETEA, however, the program will provide nearly $1.3

billion in incentive awards to top performing transit systems.

The many benefits of public transportation cannot be measured in terms of miles

of track, number of buses, or the capacity of rail cars. If the buses and trolleys and

rail cars are empty, we will not have achieved increased mobility, reduced air pollution, or improved our economy. The benefits of transit depend on riders. Participation in this program would be voluntary.

Providers that receive urbanized area or rural formula funds and prove their success by increasing ridership will be eligible for incentive grants. This program will

encourage States and urban areas to institute the data collection necessary to measure performance, but more importantly, focus their attention on the issues that matter most to riders and potential riders.

To ensure that services are not shifted away from transit-dependent populations

that are somewhat more costly to serve, urbanized areas that experience a significant decline in public transportation patronage by individuals with disabilities, the

elderly, or low-income persons would not be eligible for a performance incentive

award.

The Department recognizes that rural transit operators have not been required

to report on overall ridership, and urban transit systems are not required to report

ridership by population group. During the first three fiscal years of this initiative,

a portion of the funds would be available to assist States and urban areas to institute the data collection necessary to measure performance, so that they can participate in the incentive award program.

Simplified Program Requirements

SAFETEA includes a number of important changes to ease the regulatory burden

on all transit grantees, but especially on small, rural, and nonprofit grantees whose

administrative capacity can be strained by burdensome rules and program requirements. Among the specific requirements affected are Buy America, labor certifications, and drug and alcohol testing. SAFETEA in no way undermines the intent

of the current regulations, but rather is intended to ease the burden of compliance,

particularly for small grantees.

Buy America

We propose to ease the paperwork and regulatory burden on all grantees by excluding all manufactured products except rolling stock (buses and railcars) from the

Buy America requirements. This change comports with the current Buy America

rules under the Federal aid highway program. SAFETEA will further help smaller

46

grantees by eliminating the requirement for pre-award and post-delivery audits of

Buy America compliance for private nonprofit operators and grantees serving urbanized areas of less than one million people. These grantees will still be required purchase rolling stock under Buy America rules.

Labor Certifications for Rural Operators and Non-Profit Operators

We propose to enact into law the Department of Labor’s (DOL) current practice

of using a Special Warranty to ensure fair and equitable arrangements protecting

the interests of employees of rural operators. Further, in order to provide consistent

requirements for nonprofits regardless of which source of program funds they receive, SAFETEA proposes to extend the Special Warranty provision to recipients of

Job Access, Elderly and Disabled, and New Freedom Initiative funds. The proposal

also includes, however, a provision to give the Secretary of Transportation the authority to, on a case-by-case basis, waive the requirement for a Special Warranty

for a private nonprofit operator.

Drug and Alcohol Testing Program

SAFETEA would give the Secretary of Transportation the authority to exempt

from FTA testing requirements those public transportation providers that are adequately covered under other Federal or Departmental testing statutes or regulations, such as the U.S. Coast Guard’s testing requirements applicable to ferryboat

employees.

Fewer Grant Applications

By combining programs under accounts that reflect the type of grant recipient,

we have also paved the way for the submission of a single grant application for

several grants. Urbanized areas will be required, for example, to submit only one

application to receive both their regular formula and Fixed Guideway Modernization

Formula Funds. For both urban and rural areas, the formularization of the bus program will eliminate the need to make separate grant applications for those funds.

In addition, Job Access funding requests will be submitted through a single, simplified State application. These reductions in ‘‘electronic paperwork’’ will ease administrative workloads throughout the system.

Other Important Initiatives

The Transportation Planning Process

Good transportation planning is essential to understanding the mobility problems

communities face, identifying appropriate solutions, and making decisions on the investment of these funds. The resulting decisions contribute directly to the efficiency

of our national transportation system, the accessibility of our people to jobs and

other activities, the health of our economy, and the quality of our environment.

Over the 6-year authorization of SAFETEA, funds available for State and metropolitan planning ($822 million) will more than double the amount provided under

TEA–21 ($365 million). With 76 new urbanized areas designated as a result of the

2000 Census, additional funding will be needed to help support at least 40 new Metropolitan Planning Organizations (MPOs), as well as a number of existing MPOs

whose geographic scope was significantly expanded. MPOs are responsible for preparing long-range and short-range plans for transportation improvements in their

metropolitan area.

This work involves ongoing public involvement, analysis of travel trends and forecasts, the assessment of community and environmental impacts, and financial planning to ensure that programs are financially feasible. In metropolitan areas, only

projects that are formally adopted by the MPO are eligible for funding under FTA

and FHWA programs.

SAFETEA proposes to combine the long-range metropolitan plan and the shorterterm Transportation Improvement Program into a single plan. Other changes will

improve the linkage between the transportation planning and project development

processes, which will ultimately enhance transit project delivery.

In addition, we are proposing to create a new Planning Capacity Building Program, jointly funded by FTA and FHWA, to improve State and local planning methods and technical capacity. Over the last several years, there have been new and

increased demands placed on the planning process—more emphasis on freight

planning, land use linkages, security, safety, performance-based planning, and operations planning. We want to help all communities take advantage of these important advances by highlighting best practices, sponsoring peer-to-peer exchanges,

providing training, conducting special workshops, and other activities.

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Federal Lands Transportation

On May 30, 2001, President Bush announced the National Parks Legacy Project,

a series of proposals to enhance the protection of America’s national parks and increase the enjoyment of those visiting the parks. Each year, there are over 900 million visits to National parks, forests, and wildlife refuges.

In support of the President’s National Parks Legacy Project, a new Federal Lands

Transit Program would also be established. This new transit program will provide

$150 million in funding over the life of SAFETEA. The proposal would authorize the

Secretary of Transportation, in consultation with the Secretary of the Interior, to

make grants, contracts or other agreements to carry out qualified planning or capital projects in, or in the vicinity of, a federally owned or managed park, refuge, or

recreational area that is open to the general public.

Project Delivery

The President and I believe that we can and must protect our environment while

improving the efficiency of transportation project delivery, consistent with the President’s Executive Order on Environmental Stewardship and Transportation Infrastructure Project Reviews. We know that it takes too long to move a transportation

project from concept to completion, and the Administration is committed to streamlining this process. Projects that were cutting edge while in the concept stage too

often end up turning into ‘‘catch-up’’ projects after years of delay.

The Department has made great progress in addressing those delays related to

environmental review, including better coordination during the environmental review process, and other improvements that have resulted from implementing the

President’s Executive Order on Environmental Stewardship that was issued last

fall. However, certain legislative changes are necessary.

In the environmental review area, SAFETEA provides a menu of solutions, all of

which should help reduce the time it takes for a sponsor to deliver a transportation

project. These include: Delegating categorical exclusions to States; clarifying the role

of States or project sponsors in expedited review procedures, particularly regarding

the establishment of time periods for environmental reviews; limiting the filing of

court appeals to no more than 6 months following a Federal decision; and reforming

Section 4(f) of the Department of Transportation Act to include consistent and appropriate criteria.

Technology

While virtually every other industry in the world has gone through a technological

revolution, transportation still lags behind in the area of technology deployment.

SAFETEA continues to foster the research, development, and implementation of Intelligent Transportation Systems (ITS) technologies but places a much greater emphasis on using these technologies to improve the performance and operation of

transportation systems in a way that directly benefits transportation customers.

SAFETEA mainstreams the ITS deployment program and offers performance incentives to States and localities that successfully implement technology to improve the

overall management of their transportation systems, including their public transportation systems.

Intermodal Facilities

Despite their critical role in the surface transportation system, intercity buses

have been largely a ‘‘forgotten mode.’’ SAFETEA addresses this anomaly by establishing requirements to improve intercity bus access to significant intermodal facilities. Our proposal also authorizes a $425 million grant program to fund capital

improvements related to such access.

Fuel Tax Evasion

Evasion of Federal fuel taxes is a serious and growing problem that requires an

equally serious Federal response. This has been, I know, a major concern of Congress. SAFETEA reduces legal loopholes and dedicates more resources to a collaborative Government-wide enforcement effort. If we are successful in curbing fuel tax

evasion, it has the potential to increase resources for investment in the entire transportation system.

Conclusion

Mr. Chairman, this legislative proposal builds upon the principles, values, and

achievements of ISTEA and TEA–21, yet recognizes that there are new challenges

to address. We urge Congress to reauthorize the surface transportation programs

before they expire on September 30, 2003. Any delay would cause uncertainty and

likely reduce infrastructure investment at the State and local levels at a time when

such investment is particularly critical.

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With stable formula funding, streamlined programs, performance incentives, and

simplified administrative requirements, our communities will be in a better position

to leverage the Federal investment in public transportation and provide Americans

with common sense solutions to meet their transportation needs.

Thank you, Mr. Chairman, for giving me the opportunity to testify, and I look forward to working with Congress to pass this legislation. I would be happy to answer

any questions you or other Members of the Committee may have.

—————

PREPARED STATEMENT OF WILLIAM MILLAR

PRESIDENT, AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

JUNE 10, 2003

APTA is a nonprofit international association of over 1,500 public and private

member organizations including transit systems and commuter rail operators; planning, design, construction, and finance firms; product and service providers; academic institutions; transit associations and State departments of transportation.

APTA members serve the public interest by providing safe, efficient and economical

transit services and products. Over ninety percent of persons using public transportation in the United States and Canada are served by APTA members.

Introduction

The American Public Transportation Association (APTA) appreciates the opportunity to testify on issues related to the reauthorization of the transit title of the

Transportation Equity Act of the 21st Century (TEA–21), and specifically on the Administration’s reauthorization proposal, called the Safe, Accountable, Flexible, and

Efficient Transportation Equity Act (SAFETEA).

APTA’s 1,500 public and private member organizations serve the public by providing safe, efficient, and economical public transportation service, and by working

to ensure that those services and products support national energy, environmental,

community, and economic goals. APTA member organizations include transit systems and commuter railroads; design, construction, and finance firms; product and

service providers; academic institutions; and State associations and departments of

transportation. More than 90 percent of the people who use public transportation

in the United States and Canada are served by APTA member systems.

Mr. Chairman and Members of the Committee, we want to thank you for the critical role you played in crafting TEA–21. TEA–21 has been an enormous success for

the Nation and transit riders in communities of all sizes. Since its enactment, transit ridership has grown by more than 21 percent, the FTA has entered into 18 Full

Funding Grant Agreements for rail projects, and millions of the Nation’s citizens

were given the option to use public transportation.

APTA’S Reauthorization Proposal

APTA worked with its membership over the past several years to develop the

transit industry’s recommendations for reauthorization of the Federal transit program. To guarantee maximum participation of APTA’s diverse membership, APTA

developed a reauthorization task force which met more than 20 times in some 14

cities throughout the Nation, many in conjunction with major association meetings.

As a result of that process, APTA developed a proposal that reflects an industry

consensus and builds on the extraordinary success of TEA–21. APTA’s proposal retains most of the current program structure. It calls for a reauthorization of TEA–

21 that is evolutionary, rather than revolutionary. It is based on the idea that a

good national transportation system serves as the foundation for a strong and growing economy and that balanced investment in all modes should be encouraged under

the Federal program that supports our surface transportation infrastructure.

APTA’s proposal is based on identified capital needs. The AASHTO Bottom Line

report and a Cambridge Systematics, Inc. study both conclude that to maintain and

improve public transportation some $43 billion annually would be required from all

sources. APTA proposes to grow the Federal transit program from $7.2 billion in fiscal year 2003 to $14.3 billion in fiscal year 2009. We call for the continuation of

funding guarantees for both the trust fund and General Fund components of the

transit program that are critical to long-term capital planning conducted by transit

operators. And we make a number of proposals to improve program delivery.

Mr. Chairman, our proposal would make no change to the structure of the Federal

transit program below the current $7.2 billion funding level. Programmatic changes

are made only with funding increases. Over the course of the proposal, some 55 percent of increases would go right back into the existing program. Our proposal calls

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* Held in Committee files.

for extra growth for some programs, particularly for rural and smaller urban areas.

It also establishes a rule that would ensure that transit formula funding never falls

below $1.15 for every $1 in funding for the major capital investment programs.

Finally, APTA has made recommendations on ways to fund its proposal. It calls

for maintaining the longstanding principle under which 80 percent of the transit

program is funded from the Mass Transit Account (MTA) and 20 percent of the program is funded with General Funds. We also support a range of ways to increase

program revenue, including indexing current motor fuel user fees for inflation—to

restore the purchasing power of the user fee; scoring outlays from the Mass Transit

Account in same ways as Highway Account outlays are scored; and restoring the

payment of interest on trust fund balances.

APTA strongly opposes any reduction in current motor fuels user fee support for

transit and recommends an 80/20 split between highways and transit for any increase in the existing motor fuels user fee. We are pleased that our transportation

colleagues at AASHTO and ARTBA have also expressed their support maintaining

this current structure. We particularly want to thank the leadership of this Committee for its strong, bipartisan support on this issue. We agree with the Committee

that these dedicated revenues are essential to the long-term viability of the transit

program and we do not want to lose a funding source that has worked so well for

more than 20 years.

Mr. Chairman, in this time of slow growth, it is important to note what increased

investment in surface transportation infrastructure means for jobs and the economy.

Each $1 billion in Federal transportation investment creates 47,500 jobs. In terms

of economic impact, we were pleased to sponsor, along with the Transportation Construction Coalition, a study of a proposal to provide significant increases in highway

and transit funding over the next 6 years. That study, by Global Insight, Inc.,*

clearly demonstrates that increased investment in transit and highways has a significant impact on GDP and is critical to improving business productivity and

strengthening the American economy.

Administration Proposal

Overall Funding Levels

On May 14, the Administration submitted to Congress its proposal for TEA–21

authorization, called SAFETEA. APTA commends the overall proposal for its goals

of reducing fatalities by improving highway safety, and striving for efficiency. But

we are disappointed about several aspects of the proposal.

SAFETEA authorizes funding for the 6-year life of the bill at $247 billion, with

$45.7 billion authorized for transit, of which only $37.6 billion would be guaranteed.

In our view, the proposal fails to adequately address either transit or highway needs

that have been identified by the U.S. Department of Transportation and independent analyses. As noted earlier, The American Association of State Highway and

Transportation Officials and Cambridge Systematics, Inc., both estimated that transit capital needs to maintain and improve public transportation are more than $43

billion annually. This Committee’s investigations have confirmed that needs exceed

current resources and continue to grow.

Under TEA–21, Congress generally funded only the guaranteed portion of the

transit program, and this is likely to be the case during the next authorization as

well. This is where the Administration proposal is very disappointing: Under it,

guaranteed funding for the transit program is limited to resources from the Mass

Transit Account and would rise from $5.9 billion in fiscal year 2004 to only $6.6

billion in fiscal year 2009—a significant reduction from the guaranteed level of funding under TEA–21. TEA–21 provided guaranteed funding of $36 billion; the Administration’s proposal would provide $37.6 billion. After inflation, this represents a

real reduction. In the face of large and growing transit needs, and with the significant ridership growth brought about by TEA–21, clearly greater investment in public transportation is necessary, not less. And just as clearly, the guarantee must

include the General Fund portion of the program, as it does under TEA–21. This

concept was established by this Committee, and it has been an essential element

of TEA–21’s success.

Program Changes

At the outset, Mr. Chairman, we do want to note there are a number of provisions

in SAFETEA that would streamline Federal transit program delivery and eliminate

red tape. We appreciate those proposals to make the program work more effectively,

and will work with the Committee staff on them. We appreciate the proposal to coVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00053 Fmt 6621 Sfmt 6621 S:\DOCS\96194.TXT BANK1 PsN: BANK1
50

ordinate drug and alcohol testing that would eliminate duplicative testing and unnecessary costs associated with redundant testing. We agree with the Administration effort on small starts. We also want to thank, in particular, Department of

Transportation Secretary Mineta and FTA Administrator Dorn for their efforts in

recent years to improve the delivery of program resources and eliminate regulatory

red tape.

At the same time, however, the Administration proposal calls for major changes

in the Federal transit program structure and the creation of a number of new programs without any commensurate growth in new funding. Mr. Chairman, one of our

key themes is not only that TEA–21 works, but also that it works extremely well.

Transit ridership is up in large cities and small, and States and localities rely on

the predictability of funding under the existing TEA–21 structure. That balanced

structure has been in place for more than 20 years, and it has served the transit

industry well. In short, we believe it is better to build on the success of the existing

program and the results that that program has produced.

The Administration proposal would significantly restructure the Federal transit

program. It would eliminate the bus and bus facilities capital discretionary program

and use funds that now go to that program for other programs. APTA supports retention of this important capital program. Transit agencies have periodic bus replacement and facility needs that cannot be met from the formula program. The role

of the discretionary bus program is to address those needs. Our proposal calls for

substantial growth in the bus and bus facility program to address growing needs.

The Administration proposal also would reduce the Federal match under the New

Starts Program; permit the use of New Starts funds for new purposes; distribute

Fixed Guideway Modernization Funds with urban formula funds; and expand the

eligible use of Fixed Guideway Modernization Funds. APTA questions the need for

all four proposed changes.

APTA strongly opposes any effort to reduce the Federal match on New Start

funds. TEA–21 and ISTEA, both emphasized a planning process designed to encourage transportation decisions based on project merit and local needs. Both ISTEA

and TEA–21 leveled the playing field for transit and highway investment in so far

as the matching ratio is concerned. Reducing the Federal share on New Starts

projects to a maximum of 50 percent, while keeping most other surface transportation Federal matches at 80 percent, will simply bias the local decisionmaking

process. Transportation planners at the State and local level, with excess demand

for both transit and highway projects and dwindling State and local resources, will

be far, far more likely to choose projects with the higher Federal match. APTA believes that it makes more sense to address excess demand with increased funding

for New Start projects than it does to reduce the Federal match.

The Administration proposal also would permit the use of New Starts funds for

‘‘nonfixed guideway improvements to encourage, among other things, consideration

of bus rapid transit options.’’ APTA believes that Bus Rapid Transit (BRT) projects

can be an effective option for communities considering fixed guideway systems. BRT

systems already are eligible for New Start funding, if they have ‘‘exclusive rights

of way or other fixed guideway design,’’ and APTA supports continuation of that

BRT eligibility under the New Starts Program. APTA and the Administration have

both proposed increases in the ‘‘small starts’’ threshhold—the funding level under

which less expensive fixed guideway projects qualify for a simplified rating process.

We believe that this would encourage BRT projects, where Federal funding often

stays under $75 million to $100 million. We also believe that less expensive nonfixed

guideway bus systems can be funded in good measure under the existing bus discretionary program.

APTA questions the Administration proposals to distribute Fixed Guideway Modernization Funds under the urban formula program and to permit the use of Fixed

Guideway Modernization Funds for nonfixed guideway modernization purposes. The

Fixed Guideway Modernization Program was originally designed to ensure the proper modernization of the Nation’s older rail transit systems, and it helps ensure that

as Federal New Start investment projects age they can be modernized. Rail systems

in large metropolitan areas carry millions of passengers each year and their ridership has grown substantially in recent years. Many of these systems are approaching capacity constraints. These funds also help systems address this growth in ridership and ensure that passengers can use these systems safely and efficiently. The

Administration proposal would allow these funds to go to an urbanized area and be

used for any transit purposes, not just modernization. We are concerned that diverting these funds from fixed guideway modernization, where needs far exceed available resources, would only exacerbate unmet modernization needs and potentially

result in the deterioration of some of the Nation’s most valuable capital assets.

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Again, the fixed guideway modernization program has been a critical component of

the Federal transit program structure since 1982, and is a great success.

APTA agrees with the Administration that rural formula funding should be increased. APTA’s proposal recommends a 110 percent increase in rural formula funding by 2009. Under APTA’s proposal the rural formula program would grow to over

$504 million by 2009. Under the Administration proposal, rural formula funding

would be $102 million less than under APTA’s proposal. While we fully support increased funding for rural public transportation, we believe that the Administration

proposal to increase the program by $229 million in fiscal year 2004—at the same

time that the total transit authorization is frozen and guaranteed funding is cut by

more than $1.2 billion—is inappropriate.

The Administration bill would distribute Job Access and Reverse Commute

(JARC) grants under a formula to the States. APTA believes that the JARC program has been successful at helping get workers to jobs and training, but with the

extremely minimal growth envisioned under the Administration proposal, we are

concerned that formulizing the JARC program would only mean that too little funding would be spread to thinly to provide effective new programs at the local level.

New Programs

APTA commends the Administration for attempting to better address the transportation needs of people with disabilities, for improved intercity bus facilities, and

public transportation in and around national parks. In particular, not only have we

expressed support for transit in parks and the New Freedoms Initiative in the past,

but we have also indicated that such programs should not be funded at the expense

of existing transit programs or needs.

While APTA recognizes the need to address unmet transit needs, we also believe

that current funding levels do not address needs under existing programs, and that

new programs should be funded with increased funding and not by reducing funding

for current programs. With that principle in mind, we question the Administration’s

proposal to create both the New Freedoms Initiative and the Intermodal Passenger

Facilities programs. Both programs address important issues, but arguably at the

expense of current transit needs.

The Administration proposes to fund the New Freedoms Initiative at $145 million

in fiscal year 2004, increasing to $162 million in fiscal year 2009. The program is

intended to provide grants for ‘‘new transportation services and transportation alternatives beyond those required by the Americans with Disabilities Act.’’ Certainly,

this is a worthy use of Federal funds, but transit agencies are struggling now to

keep up with ADA required services and need additional funding to meet the requirements of ADA.

Similarly, while APTA appreciates the effort to fund intermodal facilities that are

related to intercity bus service, this program is unlikely to provide substantial benefits to users of intracity or local public transportation bus service. The fact that it

would take $75 million each year from a transit program that does not grow in fiscal year 2004 and grows very little in subsequent years, means that it would be

funded largely at the expense of already existing public transportation capital

needs.

The Administration proposes to create a new ‘‘incentive tier’’ within both the

urban and rural formula programs. In both cases, this would be a takedown from

formula funding, which would be distributed to transit systems based on ridership

growth. The takedown would be small in the early years and used mainly for data

collection. Funding for both would, however, grow to almost $420 million by 2009

and grants are intended to provide incentives for increased ridership. APTA member

transit systems are always striving to increase ridership and improve efficiency.

This proposal is a ‘‘rob Peter to pay Paul’’ situation under a proposal that provides

little growth and a cut in guaranteed funding.

APTA is not convinced that the incentive tier would actually promote increased

ridership, and feels that it could hurt transit operators who have already achieved

or are approaching capacity limitations. We note also that Congress has already addressed this issue: Current law contains incentive tiers under both the bus and fixed

guideway factors of the existing formula program, and that those funds are awarded

to systems which have high rates of ridership relative to operating costs. And we

note further that APTA’s proposal calls for a ‘‘high intensity small urbanized area

formula program’’ that would provide formula bonuses to transit systems in small

urban areas that provide above average levels of service.

Increased Demand

Growing demand nationwide for transit services shows the effectiveness of increased Federal investment under TEA–21 and the need to continue that trend. In

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a recent 5-year period, transit ridership grew 22 percent, greater than the growth

rate of highways and domestic air travel during the same time frame.

Support for increased transit service remains high. A February 2003 Wirthlin

Worldwide Public Opinion Poll showed 81 percent of Americans support the use of

public funds for the expansion and improvement of public transportation; 56 percent

say the need to reduce traffic congestion has become more important over the last

5 years. The poll also stated 57 percent agree their community needs more public

transportation options, including 64 percent of urban residents, 59 percent of suburban residents, 51 percent of rural residents, and 55 percent of small-town residents.

Some 64 percent of respondents said they would be more likely to support a Congressional candidate who supports improving public transportation options.

This poll demonstrates that support for public transportation has increased dramatically not only in our biggest cities, but also, in smaller, urban communities and

rural areas as well, where 40 percent of America’s rural residents have no access

to public transportation, and another 28 percent have substandard access. It is estimated that rural America has 30 million nondrivers, including senior citizens, the

disabled and low-income families who need transportation options. According to a

survey of APTA members, bus trips in areas with populations less than 100,000 increased from 323 million to 426 million in a recent 5-year span.

Conclusion

Mr. Chairman and Members of the Committee, we thank you for your effort to

address public transportation needs in the next authorization bill and for your leadership in developing the existing law. TEA–21 was an enormous success for public

transportation. Increased investment in our public transportation infrastructure can

improve service for millions of citizens who use transit, make the existing highway

system in metropolitan areas work more efficiently and reduce the need to build

costly new highways in those same areas. It can reduce congestion and pollution in

and around our cities, get rural residents where they need to go, and provide a lifeline to medical services and jobs for Americans who do not have access to private

automobiles.

Public transportation is an important component of the Nation’s transportation

system and we need to invest in that entire system if we are to keep pace with the

growing demand for transit service and preservation of the existing Federal investment in the transit infrastructure. Mr. Chairman, we look forward to your leadership and to working with you and the other Members of the Committee as it crafts

and advances legislation to reauthorize the Federal transit program. We would be

pleased to answer questions you may have on APTA’s proposal or our testimony.

—————

PREPARED STATEMENT OF JEFF MORALES

DIRECTOR, CALIFORNIA DEPARTMENT OF TRANSPORTATION

ON BEHALF OF THE AMERICAN ASSOCIATION OF

STATE HIGHWAY AND TRANSPORTATION OFFICIALS

JUNE 10, 2003

Mr. Chairman and Members of the Committee, my name is Jeff Morales, and I

am the Director of the California Department of Transportation. I am here today

to testify on behalf of the American Association of State Highway and Transportation Officials (AASHTO) in my role as Chairman of the AASHTO Standing Committee on Public Transportation. We thank you for your leadership in holding this

hearing to address key transit issues to be considered in the reauthorization of the

Transportation Equity Act for the 21st Century (TEA–21).

Let me begin my remarks by saying that there are a number of key transit provisions in the TEA–21 legislation that should be continued in the reauthorization legislation. With regard to transit issues, while we believe that while some of the TEA–

21 provisions may need some fine tuning, and annual funding levels need to be

significantly increased, for the most part, the transit program provisions of

TEA–21 should be continued. We have divided our testimony into three major areas,

including:

• AASHTO’s reaction to the Administration’s reauthorization proposal titled, The

Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003

(SAFETEA);

• AASHTO recommendations for rural transit in the TEA–21 reauthorization legislation; and

• Transit bonding proposal.

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AASHTO’s Reaction to the Administration’s SAFETEA Proposal

Major Investments and Program Financing—AASHTO members are disappointed

that the Administration’s proposed funding levels for highways and transit fall substantially short of the documented need for investment in highways and transit. The

Administration proposes $201 billion for highways and $46 billion for transit, in

spite of the significant highway and transit needs identified by the U.S. Department

of Transportation in its report titled Status of the Nation’s Highways, Bridges, and

Transit: 2002 Conditions and Performance Report. Under SAFETEA, transit funding growth would be limited over the reauthorization period, starting at $7.2 billion

in fiscal year 2004 and rising to only $8.1 billion in fiscal year 2009. In fact, the

level in constant dollars would be $1.1 billion below the transit funding level for fiscal year 2003.

AASHTO’s reauthorization policies call for a total program level of $300 billion

over 6 years, including $245 billion for highways and $55 billion for transit. Under

the AASHTO proposal, the transit program would be funded at $7.5 billion in fiscal

year 2004, increasing to a minimum level of $11 billion in fiscal year 2009. Further,

AASHTO supports the higher APTA-proposed funding level that would rise to $14

billion in fiscal year 2009, provided that such an increase would not come from

sources upon which highways depend.

In addition, AASHTO is very concerned that the SAFETEA proposal, while ‘‘guaranteeing’’ funds from the Mass Transit Account of the Highway Trust Fund, contains no similar guarantee for the General Fund component of transit funding. One

of the key provisions of the TEA–21 legislation is the guarantee that it provides for

both Highway Trust Fund and General Fund monies. The framers of the TEA–21

legislation recognized that the States and transit agencies need a stable and predictable source of transit funds in order to plan, program, and construct major transit

projects. AASHTO believes that it is critical that both Highway Trust Fund and

General Funds for transit are guaranteed in the TEA–21 reauthorization legislation.

AASHTO is further concerned that the SAFETEA proposal calls for a reduction

of the Federal funding share for New Starts projects from 80 percent to 50 percent.

AASHTO believes that in order for State and local officials to make balanced decisions between highway and transit projects, the Federal share of 80 percent should

be retained for both highway and transit projects. Otherwise, the decisionmaking

process can become skewed toward projects with a higher Federal match rate, particularly when State and local governments are experiencing tight budgets.

The SAFETEA proposal would shift the FTA program funding structure so that

the New Starts Program would receive approximately 80 percent of its funding

through the General Fund while other major FTA programs would be funded

through the Mass Transit Account of the Highway Trust Fund. This approach is

being taken in order to deal with the issue of the solvency of the Mass Transit Account of the Highway Trust Fund. Since SAFETEA does not propose a guarantee

for General Funds, a major component of the FTA program, New Starts, would be

vulnerable to significant funding reductions during the annual appropriations process. The New Starts Program is a key part of the FTA program, and needs to be

funded in a way that State and local governments are assured of a stable and reliable source of Federal funding as they embark upon these more expensive projects.

As part of this proposal, bus discretionary funding would be eliminated and the Rail

Modernization program would be shifted to the formula program.

AASHTO agrees that solvency of the Mass Transit Account can be addressed

without such major changes to the FTA programs. AASHTO staff is available to

work with your staff to offer recommendations in this area.

Program and Requirements Streamlining

Existing transit legislation provides that an independent pre-award review and a

post-delivery review must be conducted when an FTA grantee purchases transit rolling stock. This has been a costly and burdensome requirement for many smaller

transit systems. AASHTO supports the provision in SAFETEA that eliminates the

requirements for private nonprofit organizations and grantees serving areas fewer

than one million people to have to certify on Buy America requirements. All manufacturers and suppliers would continue to have to certify compliance with Buy

America during the bidding process, and they would remain bound by their original

certification.

Planning—AASHTO supports the SAFETEA proposal that would give standing in

NEPA to studies developed as part of the planning process. The results of studies

developed as part of the planning process that may have standing in the NEPA

process include purpose and need; the alternatives selected for evaluation in an environmental assessment or impact statement; and an assessment of environmental

54

impacts related to development growth, including direct and cumulative effects, that

is consistent with local land use, growth management, or development plans.

This provision is designed to expedite the planning and development of transportation improvements presuming that studies developed as part of the planning process establish the basis for an environmental assessment or impact statement.

AASHTO has been working with U.S. DOT and Congressional Committees for the

past several years to get a number of improvements to the project development process and to reduce the time needed to deliver a project.

Innovative Finance—In the area of innovative finance, the Administration’s bill

would continue the Transportation Infrastructure Finance and Innovation Act

(TIFIA) program. Under this proposal, the threshold for requesting credit support

is reduced from $100 million to $50 million. AASHTO recommends that this threshold be reduced to $25 million. However, we believe that the Administration is taking

an important step in the right direction.

SAFETEA would continue the State Infrastructure Bank (SIB) pilot program, although it would be restricted to five States. Currently six States are participating

in a pilot, and officials indicate that those States would have to again compete for

participation with other States who may now be interested. AASHTO has recommended that the SIB program be expanded to all 50 States.

AASHTO Rural Transit Proposals for TEA–21 Reauthorization

Every State has some level of public transportation service to its rural areas. Approximately 1,260 organizations provide public transportation in rural areas, and

3,660 organizations provide public transportation services to the elderly and people

with disabilities. Approximately 55 percent of the existing bus and van fleet serving

rural America has already exceeded the Federally rated service life. Within the next

reauthorizaiton period, almost all of the Nation’s rural transit vehicles will need to

be replaced. About 9,200 vehicles per year will need replacement on an ongoing

basis.

AASHTO, in its ‘‘Bottom Line’’ report, documented the need to double rural tran- sit assistance. This report stated that $191 million will be needed to replace or rehabilitate existing public transit vehicles, and $194 million will be needed to replace

or rehabilitate specialized rural transit vehicles.

We believe that it is critical to strive to meet current and future transit needs

in rural America, particularly as the Nation’s elderly population increases in the

coming years with the aging of the Baby Boomer generation. Citizens in rural areas

will need access to shopping, medical, and other activities, particularly when they

are no longer able to operate an automobile.

AASHTO supports the SAFETEA proposal to increase funding for rural transportation (FTA Section 5311 program).

Transit Bonding Proposal

AASHTO is aware of a concept being considered in the Senate Finance Committee

to move most funding under the Mass Transit Account of the Highway Trust Fund

to the Highway Account, and then fund transit for the most part through a bonding

program.

As indicated earlier, AASHTO believes that the current funding structure under

TEA–21, in which Highway Trust Fund revenues are split with 80 percent credited

to the Highway Account and 20 percent credited to the Mass Transit Account is

working well and should be retained. The Federal transit program needs a stable

source of guaranteed funds from the Mass Transit Account of the Highway Trust

Fund and the General Fund in order for decisionmakers to commit to expensive

transit solutions. The current arrangement under TEA–21 provides a stable, more

predictable environment for planning, programming, and constructing these key

transit projects.

Mr. Chairman, the State transportation officials across the country and the

AASHTO staff are available to work with you, the Members of your Committee and

your staff in the vital work of reauthorizing the Nation’s highway and transit legislation for the coming 6 years. Thank you again for holding this important hearing.

—————

PREPARED STATEMENT OF ROBERT MOLOFSKY

GENERAL COUNSEL, AMALGAMATED TRANSIT UNION

JUNE 10, 2003

Mr. Chairman, Senator Sarbanes, and Members of the Committee, thank you for

the opportunity to testify today on behalf of the Amalgamated Transit Union (ATU).

55

My name is Robert Molofsky. I have been General Counsel for the ATU since 1996.

Prior to becoming General Counsel, I served as ATU’s Legislative and Political Director for 15 years. The Amalgamated Transit Union is the largest labor organization representing public transportation, paratransit, over-the-road, and school bus

workers in the United States and Canada, with nearly 180,000 members in over 270

locals throughout 46 States and nine provinces.

For 111 years, ATU has been proud to serve the mobility needs of Americans,

playing an important role in most legislative efforts affecting the public transportation industry during the past century, from requiring closed vestibules for streetcars in the 1890’s, to the creation of a Federal role for public transportation in

1964, to passing the Intermodal Surface Transportation Efficiency Act of 1991

(ISTEA) and the Transportation Equity Act for the 21st Century (TEA–21), which

recognized that local communities should be primarily responsible for the transportation choices that ultimately affect them. Our century-long commitment to transit

safety and security issues has led to many of the innovative improvements within

the industry, including better bus designs and braking systems, exact fare, and Federal penalties for assaulting public transportation workers. And we have championed the need for increased funding and expanded service at the Federal, State,

and local levels.

We are pleased to offer our views on the Bush Administration’s surface transportation reauthorization proposal, the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2003 (SAFETEA), while also presenting some of ATU’s core

principles in connection with TEA–21’s renewal.

Overview

SAFETEA is certainly a thoughtful and creative document, which generally keeps

current Federal transit programs intact. It also recognizes that we are well beyond

the debate of whether to link the transit programs with the Federal highway programs by seeking an integrated transportation planning process. The proposal

serves as a suitable platform from which to launch the discussion of which programs

should be retained and what other new initiatives should be created.

Nevertheless, because the legislation is so incredibly underfunded, the many laudable goals set forth in the Administration’s bill simply will not be able to be met.

Most significantly, despite its logo—‘‘SAFE’’TEA—the legislation falls well short of

providing the resources necessary to continue the provision of safe and secure transit service for the millions of Americans who rely on public transportation each day.

Finally, the bill would eliminate or consolidate a number of very important and

successful programs, and curtail some crucial program requirements, including

certain labor requirements, without any justification. ATU has major concerns regarding the Administration’s proposals relating to (1) the Bus Capital Program; (2)

Federal matching ratios for New Starts; (3) the Job Access and Reverse Commute

Program (JARC); (4) the structure of the New Freedom Initiative; (5) safety and security requirements; and (6) certain labor issues. We also offer a number of recommendations to improve the planning process, increase State transit funding,

coordinate the delivery of specialized transportation services, and train personnel in

connection with new technologies and maintenance requirements that are associated

with keeping the Nation’s public transportation fleets in working condition.

Bush Administration Proposal

FUNDING

Mr. Chairman, in examining the Administration’s transit proposal, there are two

levels of funding to keep in mind: The proposed guaranteed levels for transit, and

the proposed fully authorized levels (combined guaranteed and nonguaranteed authorization levels). Since fiscal year 1998, the Federal transit program under TEA–

21 has been funded only at the guaranteed level on an annual basis (except in

fiscal year 1999 when the actual appropriation exceeded the guarantee by $25 million). For example, for the current fiscal year, the program was funded at $7.2 billion, the guaranteed level under TEA–21, rather than the fully authorized level of

$8.2 billion. If this practice continues, which is likely in the current fiscal climate,

appropriators will continue to fund the program at the guaranteed level during the

next 6 years.

Therefore, with regard to SAFETEA, it is only necessary to look at the Administration’s proposed guaranteed levels for transit. We have included a chart at the

back of our full written testimony which indicates that for fiscal year 2004, the Administration is proposing a guaranteed level of $5.9 billion for the transit program,

which is a $1.3 billion cut from the current fiscal year. The guaranteed funding level

in SAFETEA for fiscal year 2004 is 17.9 percent less than the guaranteed funding

level in TEA–21 for fiscal year 2003. In fact, under SAFETEA, the Administration

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would not even reach the current level of spending by the end of the reauthorization

period. Guaranteed public transit funding would be 8 percent less in fiscal year 2009

than it is in fiscal year 2003!

During the past 2 years, this Committee has conducted numerous hearings on the

success of TEA–21’s guaranteed, increased funding levels, and the impact the program has had on transit ridership, planning, and the overall growth of the Nation’s

transit systems. The Administration’s funding proposal, if enacted, would not only

reverse these trends but also cripple our transportation system.

Ironically, because of its proposed devastating funding cuts for transit, the legislation which is called ‘‘SAFE’’TEA would negatively impact the ability of transit systems to upgrade rolling stock and safety and security measures, causing the public

transportation industry to jeopardize its reputation as the safest mode of surface

transportation in the United States.

SAFETEA ELIMINATES SUCCESSFUL PROGRAMS; CREATES UNNECESSARY

NEW PROGRAMS

Under SAFETEA, the Bus Capital Program would be eliminated, and the JARC

Program would be distributed by a formula. It is not clear why the Administration

is recommending the elimination and consolidation of two of the most successful

programs under FTA’s jurisdiction. Under current practice, Congress selects specific

projects for funding from requests submitted by eligible recipients. This process is

the best way to ensure that large, medium, and small transit systems can replace

equipment and provide much needed service in their communities. ATU supports

maintaining the Bus Capital Program and JARC as allocated programs.

SAFETEA would also create a New Freedom Program to provide grants to recipients for new transportation services and transportation alternatives beyond those

required by the Americans with Disabilities Act (ADA) of 1990, including motor vehicle programs that assist persons with disabilities with transportation to and from

jobs and employment support services.

ATU fully supports the principles set forth under this proposed program. However, the best way to achieve these goals is by expanding fixed route and paratransit services in coordination with the already existing JARC Program. Through

the FTA, the Federal Government has already invested in ADA paratransit and

JARC, and it would be more efficient to expand the JARC Program with an emphasis on people with disabilities than to allow separate special purpose systems to be

subsidized.

In addition, the reauthorization of TEA–21 offers a real opportunity to tap into

already available funds from other Federal agencies. Public transportation can make

a difference in how people get to jobs, health care, training, and other social services. Every dollar dedicated to human services transportation by transit agencies

can be stretched further if coordination is implemented at the Federal level and encouraged at the State and local levels.

In addition to 10 DOT programs, there are at least 12 Department of Health and

Human Services (HHS) programs that together are providing approximately $10 billion annually to assist transportation systems to provide access for persons with

special transportation needs. Moreover, the two major Department of Labor (DOL)

programs, Welfare-to-Work and Temporary Assistance for Needy Families (TANF),

may also be tapped for transportation purposes. The potential benefits from coordinating transportation services can be significant. Benefits include increased service

levels, better quality of service for riders, cost savings, upgraded maintenance programs, more professional delivery of transportation services, and safer transportation services.

TRANSIT SECURITY ISSUES

ATU applauds the Administration’s proposal in SAFETEA to expand the definition of ‘‘capital project’’ to include not only capital security needs, but also noncapital, security-related training, and drilling, thereby authorizing formula grant expenditures for these purposes. While expanding the definition of ‘‘capital project’’ is

a step in the right direction, there absolutely must be a separate, dedicated source

of funds available to transit systems solely for security purposes, frontline transit

employee training in particular.

According to a recent report by the General Accounting Office (GAO), issued in

response to a request from this Committee, the most significant challenge in making

transit systems as safe and secure as possible is the difficulty financially strapped

transit agencies are having in obtaining sufficient funding. The American Public

Transportation Association (APTA) estimates this funding need to be over $6 billion.

As I will discuss later in my testimony, Congress must call on the Department of

57

Homeland Security to dedicate the necessary resources to assist transit agencies in

their security efforts.

SAFETEA further proposes to authorize FTA to investigate security concerns and

to withhold funding if necessary to compel a transit system to make necessary security improvements. While this proposal addresses an obvious need for FTA oversight

and direction of security matters at transit agencies, it does not go nearly far

enough to ensure that systems are taking all the necessary steps.

As we have stated to this Committee before, there must be specific legislative and

regulatory requirements with respect to the equipment, technology, training, and

personnel needed to prepare, prevent, and respond to any terrorist attacks or

threats. The GAO recognized this need in its report, stating that ‘‘goals, performance indicators, and funding criteria need to be established to ensure accountability

and results for the Government’s efforts’’ (GAO–03–263). Failure to meet these minimum requirements should result in the withholding of FTA funds in an amount

determined by the Secretary.

EQUITY ISSUES

Federal Matching Ratios

SAFETEA would statutorily set the maximum Section 5309 share for a New

Starts project at 50 percent. The current maximum is 80 percent. Deputy Secretary

Jackson has justified this recommendation by noting that ‘‘all forms of transportation must face the hard reality that Federal financial resources are not boundless

and cannot fully fund every meritorious transportation need.’’ Yet, under SAFETEA,

the maximum share for highway projects would remain at 80 percent.

Having identical matching requirements between the highway program and the

transit program provides communities with the opportunity to decide on future

transportation projects without having to consider the issue of the Federal contribution. The Administration’s proposal violates the spirit of both ISTEA and TEA–21,

which were structured to finally give communities an unbiased choice by placing

highways and transit on a more equal playing field. The policy of allowing for an

80 percent Federal match for highways while cutting the Federal limit for transit

New Starts to 50 percent is backward thinking. A recent GAO report confirms that

‘‘officials from several MPOs stated that a cap on New Starts funds could influence

their selection of highway over transit projects since the decisions are often affected

by the availability of funds from various Federal programs and which projects will

receive the highest Federal share’’ (GAO–02–603).

Congress should reject this approach. ATU supports preserving the Federal-State/

local funding matching ratio for transit New Starts at the TEA–21 level of 80 percent/20 percent, the same level that currently exists for highway construction, to ensure that communities can make their own choices about their future transportation

plans.

Commuter Benefits

Under current tax laws, the monthly cap on employer provided tax-free parking

benefits is $190, but the monthly limit on employer provided tax-free transit passes

is only $100. SAFETEA would do nothing to change this imbalance, which encourages people to continue to drive to work alone. This especially affects people who

ride the Nation’s oldest and far reaching transit systems, where monthly fares to

travel between suburban and urban areas reach well over $100. Suburban bus,

heavy rail, and commuter rail riders should be rewarded—not penalized—under the

tax code for choosing to ride transit rather than driving to work.

Under the transit pass program, everyone wins. Employees do not pay Federal income tax on transit commuter benefits, and employers can deduct their costs for

providing such benefits, and avoid payroll taxes on such benefits, regardless of who

pays. TEA–21 proved that when you pay people to ride transit, they will indeed

leave their cars at home.

ATU supports raising the monthly cap on employer provided tax-free transit benefits to the level allowed for parking benefits to encourage more people to ride public

transportation.

LABOR ISSUES

The U.S. public transportation industry has experienced remarkable labor relations stability during the 40 years of the Federal transit program. This has allowed

transit employees to go about the business of their most important role: Moving

America Safely. The basis for five decades of this labor-management partnership is

Section 5333 (b) of Title 49 of the United States Code (formerly Section 13(c) of the

Federal Transit Act), which states that when Federal funds, most recently authorVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00061 Fmt 6621 Sfmt 6621 S:\DOCS\96194.TXT BANK1 PsN: BANK1
58

ized under TEA–21, are used to acquire, improve, or operate a transit system, there

must be arrangements to protect the rights of affected transit employees.

Every surface transportation reauthorization bill enacted since 1964 has been

linked to a strong labor policy that provides employee protections for public transit

workers. Today, as in the past, ATU’s support for reauthorization will be contingent

on the continuation of those policies and their application to any new programs or

innovative finance mechanisms created through the new bill. The value of this historic link between a strong transportation bill and sensible labor policy has been

clearly recognized by the Administration, which has recommended the retention of

the crucial Section 13(c) labor protections for the major formula (49 U.S.C. 5307)

and Capital Investment Grant (49 U.S.C. 5309) Programs.

SAFETEA would also apply Section 13(c) to the majority of the small and medium

size programs under the current legislation as well as the proposed new FTA Programs. However, SAFETEA raises serious questions on the mechanisms chosen to

apply (and potentially waive) 13(c) in connection with such programs. By proposing

a new waiver process for labor protections in certain programs, the Administration’s

bill would create inconsistencies and gaps in 13(c) coverage throughout the Federal

transit program.

In 2000, this Committee requested an in-depth study of the Section 13(c) Program, embodied in a November 2001, GAO report entitled Transit Labor Arrangements: Most Transit Agencies Report Impacts Are Minimal (GAO–02–78), which

supports the ATU’s long-held notion that the provision does not substantially delay

the flow of capital for transit projects.

GAO surveyed more than 100 transit agencies in the United States, who overwhelmingly reported that Section 13(c) has had only a minimal impact on (1) labor

costs, (2) the ability to adopt new technologies, and (3) the ability to modify transit

operations. In fact, more than 70 percent of transit agencies indicated that certain

other Federal requirements, such as compliance with the ADA, were far more burdensome than Section 13(c). Most significantly, the report notes that an overwhelming majority of the transit agencies have been satisfied with the timeliness

of FTA’s grant processing, confirming a 2000 GAO report which found that 98 percent of the DOL’s applications were processed well within the 2-month period required by the Agency’s new guidelines.

Given the overwhelming conclusions of the GAO reports, we do not see the FTA’s

justification for proposing to curtail the labor protection requirements of the Federal

Transit Act for certain existing and proposed new programs.

The Administration calls for the implementation of the DOL specially designed

warranty arrangement (in which grants are labor certified without a referral) and

possible waiver options in connection with 13(c) for certain existing programs, such

as the JARC Program, the 5311 Rural Program and the Over the Road Accessibility

Program. In addition, the bill calls for a possible waiver of 13(c) for the entire 5310

(Elderly and Disabled) Program. SAFETEA would also create a possible waiver of

13(c) for new programs, such as the Indian Reservation Rural Transit Program, and

the above mentioned New Freedom Program.

With regard to the JARC Program, under current law, entities receiving JARC

grants must comply with the full transit-labor certification process under 13(c), with

the exception of JARC grants to applicants serving populations under 200,000,

which are labor certified by using the warranty. There is no support or justification

for changing the grant procedures under this program. Since the 1999 regulations

were released, and the separate procedures were set for applicants based on population, there have been no problems regarding this program. The new time limits

are working perfectly, and no JARC grants have gone unfunded because of 13(c).

The current coverage should be maintained without a new waiver option.

Similarly, the warranty has worked well under the 5311 Rural Program, and

could be just as easily applied under the proposed Indian Reservation Rural Transit

Program proposed as part of 5311. There is no reason for statutory language calling

for a waiver regarding this program.

Other Labor Issues

Also, SAFETEA would create a new Intermodal Passenger Facilities Program

which perhaps inadvertently does not include 13(c) coverage. The program, if enacted, should of course include 13(c) coverage. Moreover, without a properly funded

bill, we do not support funding for this program from the Mass Transit Account.

Finally, the bill would allow DOT to waive 13(c) requirements for certain demonstration projects and projects involving new technology. There is no evidence of

any demonstration projects or other projects involving new technology having been

negatively affected by Section 13(c). In fact, the opposite is true. Section 13(c) is the

59

*Held in Committee files.

basis for five decades of labor-management cooperation in the transit industry, allowing for major technological advances.

CHARTER BUS SERVICE

SAFETEA maintains the current restrictions on public transit agencies that permit them to provide only a limited amount of charter service within their service

areas and proposes to enforce these rules by allowing the Secretary to withhold Federal funds in the event of a violation.

It is important that any revisions of the charter service regulations take into account the increasing concerns of those in both the transit and intercity bus industries that the existing rules are not only cumbersome and confusing, but are also

serving to create an adversarial method of decisionmaking that is harmful to those

seeking charter service. In addition, it must be recognized that while the current

regulations grew out of concern that without restrictions, the allocation of Federal

funds to public agencies would create unfair competition with the private charter

bus industry, private operators today are receiving significant amounts of Federal

funding as well.

Certain minimal exceptions have been established by FTA to respond to transit

agency requests to serve elderly persons and individuals with disabilities. We support further efforts to reform the charter bus regulations to permit public agencies

to provide, upon request, a limited range of charter bus service to nonprofit and governmental organizations within their service areas.

Based on our discussions with public transit agencies and representatives from

the private bus industry, we believe a new, more effective, streamlined set of regulations can be crafted which protect the economic interests of the private bus industry

while at the same time allow public agencies to respond to community-based charter

service requests.

Congressional support for this ongoing effort would greatly enhance the likelihood

of an agreement between the parties and provide a basis for establishing sensible

revisions.

ATU Proposal

Mr. Chairman, the ATU’s entire TEA–21 reauthorization proposal is included in

this book, entitled Next Stop: Real Choices.* I will summarize the most important

aspects of the proposal.

The proposal is a comprehensive plan which contains the ATU’s recommendations

on major policy, fiscal, and structural issues in connection with the Federal transit

program for the first decade of the 21st Century. ATU’s reauthorization plan calls

for the continuation of a strong Federal role in connection with providing the resources necessary to maintain and improve the quality of America’s public transportation systems.

While we consider all parts of the proposal extremely important, the following are

the seven core principles and ideas that we believe should be an essential part of

the reauthorization bill:

INCREASED, GUARANTEED TRANSIT FUNDING

ATU has joined APTA in its recommendation for increasing Federal transit funding by 12 percent annually, so that by fiscal year 2009, the program would be funded at a guaranteed level of $14.3 billion. In order to reach this level, ATU supports

raising and indexing the Federal gas tax as recommended by leadership of the

House Transportation and Infrastructure Committee. ATU also supports bipartisan

proposals to draw down reserves in the highway trust fund, and collect the interest

on fund reserves.

In addition, we call for the preservation of the firewalls (for the entire Federal

transit program) that ensure guaranteed funding for the program on an annual

basis. Moreover, we support maintaining the needs-based formulas which determine

transit funding. Congress should reject any so-called ‘‘equity’’ proposals that would

cap transit funding for any one State at a certain level or percentage. We also

support increased funding for flexible transportation programs, such as the Congestion Mitigation and Air Quality Program (CMAQ), which have allowed communities

to meet expanded transit needs where traditional funding sources have not been

adequate.

Finally, Congress should oppose any transit funding proposals that would break

the historic link between highway and transit funding and decrease transit’s share

of the Federal motor fuel tax. For example, a draft proposal under consideration at

the Senate Finance Committee would redirect gas tax funds currently earmarked

60

for transit to pay for highway construction by decreasing transit’s share of the gas

tax to a half-cent. The rest of the Federal transit program would be financed

through an unproven bond scheme. Financing public transportation with bonds is

a proposal to make an essential element of our transportation system dependent on

an untested, destabilizing funding source.

This approach will require ever-increasing borrowing, at a greater cost to taxpayers, and destabilize future transit investments. Removing dedicated funds for

transit undermines the long-term viability of our public transportation systems, ultimately placing the economy, metropolitan areas, transit-dependent populations, and

air quality at risk. Further, separating the funding sources could erode the linked

planning process, which addresses environmental issues affecting both the highway

and transit programs.

The guaranteed funding provisions of TEA–21, which link transit funding to the

Federal motor fuel tax, have provided an unprecedented degree of stability within

the public transportation industry since 1998. Ridership levels are at their highest

point since 1960, and ATU membership has grown to more than 180,000, the highest in the 111-year history of our union. ATU certainly supports increased highway

funding and the equitable resolution of the donor-donee issue, but placing transit

funding at risk is not the best solution.

FLEXIBILITY INCENTIVE GRANT (FIG) PROGRAM

ATU is proposing a new transportation initiative in connection with the reauthorization of TEA–21. The idea behind the program named—the Flexibility Incentive

Grant (FIG) Pilot Program—is to provide incentives that would encourage States to

establish new sources of revenue for transit projects and services and to reward

States for creating more flexibility in the use of their existing transportation funds.

The FIG Program is also designed to encourage States to think twice before

cutting transit funding in the face of rising fiscal pressures by providing ‘‘bonus’’

Federal transportation dollars to those States that increase public transportation

funding or take steps to increase funding. Significantly, States could use funds derived under the FIG Program for any highway or transit projects eligible for assistance under Title 23 or Chapter 53 of Title 49.

Under the proposed FIG Program, the Secretary of Transportation would be authorized to allocate $5 million annually to each State that increases transit expenditures by at least 10 percent as compared to the previous fiscal year. If a State is

already expending more than $1 billion on public transportation, the Secretary

would be authorized to allocate $10 million to such State if it increases transit expenditures by at least 1 percent.

In addition, States would be eligible for grants on the condition that they create

new dedicated sources of revenue for public transportation. Such sources may include the dedication of new State motor fuel taxes, sales taxes, interest on existing

highway funds, motor vehicle excise taxes, tolls, loans to be made out of highway

funds, or other sources of funding.

Finally, in order to encourage flexibility in the spirit of ISTEA, as continued

under TEA–21, the FIG Program would authorize the Secretary of Transportation

to reward States for amending their existing statutes or constitutions to allow funds

that are currently restricted for highway purposes only to be eligible for transit

projects and services as well as highway purposes.

The FIG Program would not affect existing formulas under which States receive

transportation funds through Title 23 or Chapter 53 of Title 49; it would be a

‘‘bonus’’ program to be awarded in addition to any funds received through those

sources. Also, the Program would be funded out of General Funds and therefore

would not put further pressure on the Federal Highway Trust Fund.

The FIG idea is, of course, just one very small initiative in the context of the massive highway/transit bill. Nevertheless, ATU believes the idea has a great deal of

merit because it seeks to unlock billions of dollars in State resources, each year, for

public transportation, community and rural transportation, and ADA services. A

draft legislative proposal is available for your review.

TRANSIT SAFETY AND SECURITY

This Committee knows the severity of the security threat facing our Nation’s transit systems today. Given that one-third of terrorist attacks worldwide target transportation systems and that transit systems are the mode most commonly attacked,

it is imperative that the Federal Government expand its role in securing transit systems—through the establishment of national standards for transit security and the

provision of Federal funds to assist agencies in meeting these standards.

Currently, only rail fixed guideway transit systems are required, as a condition

of FTA funding, to adopt a safety and security plan. There is no similar requirement

61

for transit bus systems. At a minimum, all transit systems, bus and rail, should

adopt a security plan to be overseen and implemented by a system security committee, including both management and employee representatives, and all systems

must provide security and emergency management training for frontline transit employees, including vehicle operators and maintenance employees.

Security training for frontline transit employees is not only necessary in today’s

environment, but is one of the most cost-effective measures that an agency can take

to better protect the nine billion passengers riding transit each year, as well as

more than 350,000 transit employees. Despite this, a recent survey of ATU members

showed that 80 percent of respondents reported that they had not received any security training from the employer.

It must be recognized that frontline transit employees, including bus and rail operators and maintenance employees, are the eyes and ears of every transit system.

These employees, with the appropriate training, can be crucial in deterring, diffusing, and responding to serious security incidents that occur aboard their vehicles

and within transit stations or facilities. In addition, transit employees are often the

first line of defense in a terrorist incident, offering protection and much needed

transportation away from terrorist targets and disaster sites. For these reasons,

FTA should require all transit systems to provide comprehensive training for their

employees on a regular basis. Training programs developed by the National Transit

Institute in conjunction with FTA, APTA, and the ATU are a good model of the type

of training necessary.

As I noted in my comments on the Administration’s proposal, financially strapped

transit systems across the United States have been unable to gather the resources

to fund necessary security training and improvements. It is imperative that the Department of Homeland Security (DHS) and its Transportation Security Administration dedicate sufficient resources for such purposes.

Given the extensive expertise of the FTA and the countless security-related initiatives undertaken by the Agency in the past few years, it is important that funding

from DHS be distributed only after appropriate consultation and coordination with

FTA, including analysis of FTA readiness assessments. In order to facilitate such

coordination, Congress must call on DHS and FTA to enter into a Memorandum of

Understanding expeditiously so that any available funds can be distributed effectively and efficiently.

A REAL VOICE IN TRANSPORTATION PLANNING

Unfortunately, transit riders, environmentalists, pedestrian and bicycle groups,

businesses, transit workforce and industry representatives, and other individuals

with a direct stake in transportation planning in reality have no real voice with regard to the metropolitan planning organizations (MPOs) that control their future.

Under current law, MPOs, serving as the transportation planners for every U.S. urbanized area with a population of more than 50,000, and determining the future of

our communities for decades, are composed of only local elected officials, officials of

public agencies that administer major modes of transportation, and appropriate

State officials, often with competing political and transportation interests.

Although representatives of mass transportation authority employees, along with

the general public, are given a reasonable opportunity to comment on long-range

plans, they are not afforded a seat on the board, and they certainly have no voting

rights. In fact, by the time riders, workers, and residents are permitted to submit

comments at all in connection with long-range transportation plans, extensive research, and consultation with State representatives has taken place, and plans are

already in their final stages. No opportunity to submit comments, or any other public procedure, is required during the drafting stages.

This is an outdated process. These constituency groups would, as intended in the

original process, bring a real world and informed perspective to the MPO boards,

with a real ability to be heard and effect the decisionmaking process.

Public transportation workers in particular would be helpful on issues involving

transit operations and the implementation of new technology. ATU supports the diversification of MPO boards, requiring MPOs to appoint transit workforce representatives, minority groups, transit riders, bicycle and pedestrian advocates, businesses,

and others with a direct stake in the provision of public transportation services to

sit on such panels, with the right to vote. We also support requiring the governors

to appoint these representatives for statewide planning. Finally, we support the

ability of the general public to view long-range plans and submit comments during

the early research and development of such plans, rather than after a draft has been

completed.

62

TRANSIT IN NATIONAL PARKS (TRIP)

Congestion in our national parks has reached massive proportions. The 384

units of the National Park System drew approximately 300 million visitors in

2001, and the National Park Service expects demand to increase by 500 percent over

the next 40 years. The millions of Americans who escape urban congestion by visiting national parks each year are greeted by dim, hazy vistas and unhealthy air

instead of the expansive views and scenery that have made these areas our national

treasures.

The piecemeal approach to solving the serious congestion issues in our parks is

simply not working. ATU supports the adoption of S. 1032, the Transit in Parks Act

(TRIP), which would provide increased funding for mass transportation in certain

federally owned parks, as part of TEA–21’s reauthorization. Without question, this

legislation begins to address the major congestion and environmental issues that

currently exist in U.S. National Parks from coast to coast.

PUBLIC TRANSPORTATION WORKFORCE DEVELOPMENT PROGRAMS

While the transit industry has effectively focused on the development of rail infrastructure and rolling stock, there has been a lack of attention directed toward training personnel in connection with new technologies and maintenance requirements

that are associated with keeping the Nation’s public transportation fleets in working

condition. The public transportation industry desperately needs job training and career ladder programs to provide workers skills necessary to carry out maintenance

tasks in a cost effective manner. It also needs to provide training and technical assistance to individuals who are interested in commercial driving careers.

The Transit Technology Career Ladder Partnership (TTCLP) was launched in

2001 with a seed grant from the DOT and the FTA. Working through the nonprofit

Community Transportation Development Center, the program has assisted local

transit systems and unions to jointly develop transit training partnerships in five

pilot locations. These locally sponsored partnerships have already raised eight times

more State and local funding than originally invested by DOT in the pilot program.

ATU and the Transport Workers Union call for the program to be funded at a level

of $1.76 million in fiscal year 2004, to increase to $2.5 million by 2009, as the program expands to more States. ATU supports TTCLP as an integral part of the reauthorization of TEA–21 to provide training and technical assistance to individuals

who are interested in commercial vehicle driving, maintenance, or other careers

within the transit industry.

MEETING COMMUNITY TRANSPORTATION NEEDS

As recommended by the Community Transportation Association of America

(CTAA), the Committee should recognize that an increase in capital investment is

long overdue for rural and small-urban transit organizations, which provide critical

mobility services outside of America’s largest regions. More than one-third of America’s population lives outside of urbanized areas. The agencies involved in Section

5311 services enjoy strong community support, providing more than 340 million passenger trips per year. However, more funds are needed to keep up with expanding

services. The existing fleet is far older than typical useful life projections, and agencies are falling behind vehicle replacement suggestions. Moreover, the reauthorization bill should address the serious lack of services in rural America, which impacts

disproportionately on persons with disabilities and low-income people, who are particularly transit dependent. Thirty-two percent of all rural residents are classified

as transit dependent, including 36 percent of all rural Americans living in nonmetropolitan areas. Guaranteeing access for America’s most transit dependent population should be a priority in the next reauthorization.

Conclusions and Observations

In summary, ATU’s message to the Committee is simple: TEA–21 has been an

enormous success. Let us build off the progress of ISTEA and TEA–21 by maintaining and increasing the Federal investment in the existing transit programs and policies that have forever changed the travel patterns of America’s communities, both

large and small.

Additionally, Congress should properly fund required security and employee training programs and adopt appropriate new programs, especially those that have the

potential to encourage more transit investment from nonfederal sources, so that we

may finally narrow the ever-widening gap between transit needs and transit investment. Finally, let us provide those with a direct interest in transportation services

with a real voice and an expanded role in connection with transportation planning

so that the ideals that were set out in ISTEA and TEA–21 may finally be realized.

63

We realize of course, Mr. Chairman, that without adequate resources, none of the

reforms proposed by the Administration, the Members of this Committee, or any of

the organizations represented on this panel can be fully reached. And, whether

Members of Congress agree on the concept of a gas tax increase or not, it should

at least be clear to lawmakers on both sides of the aisle and in both Chambers that

increasing the gas tax is the best possible way to meet the extensive highway and

transit needs of this Nation. Congress will not be able to solve the issues of donor/

donee distribution, training, safety, research and development, or underwrite service

expansion unless the gas tax is increased. Otherwise, as is the case with the Administration’s proposal, we will end up with a situation in which crucial programs will

be eliminated or consolidated so that limited resources may be shifted elsewhere.

It is for these reasons that ATU supports raising the Federal gas tax as recommended by leadership of the House Transportation and Infrastructure Committee. Each penny of the motor fuels excise taxes currently yields over $1.7 billion

per year, generating more than 80,000 jobs in the transportation industry, with

about $1.4 billion being deposited into the Highway Account of the Highway Trust

Fund and $350 million deposited into the Mass Transit Account. The Federal motor

fuels tax is currently 18.4 cents, and has not been raised since 1993.

With unemployment at an 8-year high and 1.7 million workers unemployed for

more than 6 months, President Bush and the Congress should approve a plan that

will create jobs in our communities and ensure that our future transportation needs

are met. As a bipartisan group of 43 U.S. Senators recently stated in a letter to the

President, ‘‘a robust public transportation infrastructure is vital to continuing America’s economic growth.’’

We believe it is time for a frank debate on this matter. It is not a contradiction

to support the President’s tax cuts while calling for an increase in gas tax revenues.

Whether an individual earns more than $300,000 or less than $30,000 annually,

each person gets the same seat on the bus or the train. Moreover, just as the new

tax bill is a balance of tax cuts and loophole fixes, a transportation bill with a gas

tax increase will net out as a gain for all taxpayers. Supporters of the tax cuts have

said that eventually the money people save will wind up back in the economy. Similarly, a gas tax increase will put more cash in everyone’s pockets—money saved

from reducing the overwhelming burdens of traffic congestion. According to the

Texas Transportation Institute, in 2000, congestion (based on wasted time and fuel)

cost about $68 billion in 75 urban areas. The average cost for each of the 75 urban

areas was $900 million. By providing for even just a nominal two-cent gas tax increase, which would cost the average driver a mere $12 per year, or 6-cents per day,

we could begin the process of redirecting at least a portion of that $68 billion back

into the economy.

We know that one mechanism alone cannot provide the necessary resources to

maintain and improve the conditions of the Nation’s highway and transit systems.

ATU has and will continue to support innovative finance mechanisms in addition

to (but not in lieu of) the gas tax, such as State Infrastructure Banks, TIFIA, and

bonds with labor protections, including Section 13(c) and Davis Bacon, attached to

directly funded projects as well as those funded in subsequent generations. However, just as Congress is striving for simplicity in the tax code, there is no substitute

for the basic, time-tested method of meeting our transportation needs with funds

generated directly out of the transportation system.

Without question, these are enormous challenges, and we are undoubtedly living

in extraordinary times. Yet, ATU firmly believes that Congress has the means, the

will, and the experience to achieve these crucial mobility goals. The transit industry,

in cooperation with ATU, has certainly come a long way since the 1964 Federal

Transit Act. However, the success of our efforts has produced new challenges that

must be immediately addressed in order for us to sustain the progress that has been

made. ATU looks forward to working with this Committee in meeting these challenges, so that we may continue to Move America Safely during the period of the

next reauthorization bill, and beyond.

***

Fact Sheet: TEA–21 versus SAFETEA

TEA–21 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 TOTAL

Fully Authorized

Level .................. $4.6 $6.3 $6.8 $7.2 $7.7 $8.2 $41

Guarantee ............. $4.8 $5.3 $5.8 $6.3 $6.7 $7.2 $36

64

*Held in Committee files.

*Held in Committee files.

SAFETEA FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 TOTAL

Fully Authorized

Level .................. $7.2 $7.4 $7.5 $7.7 $7.8 $8.0 $46

Guarantee ............. $5.9 $6.0 $6.2 $6.3 $6.5 $6.6 $37.6

(Billions of Dollars)

Since fiscal year 1998, the Federal transit program has been funded only at the

guaranteed level on an annual basis (except in fiscal year 1999 when the actual appropriation exceeded the guarantee by $25 million). For example, for the current

fiscal year, the program was funded at $7.2 billion, the guaranteed level under

TEA–21. If current practice continues, appropriators will continue to fund the program at the guaranteed level during the next 6 years.

Therefore, in examining the Administration’s proposal (SAFETEA), it is only necessary to look at the proposed guaranteed levels for transit. As the charts indicate,

for fiscal year 2004, the Administration is proposing $5.9 billion for the transit program, which is a $1.3 billion cut from the current fiscal year. In fact, under

SAFETEA, the Administration would not even reach the current level of spending

by the end of the reauthorization period. Guaranteed public transit funding would

be 8 percent less in fiscal year 2009 than it is in fiscal year 2003!

—————

PREPARED STATEMENT OF HARRY W. (WOODY) BLUNT, JR.

PRESIDENT, CONCORD COACH LINES

CONCORD, NEW HAMPSHIRE

ON BEHALF OF THE AMERICAN BUS ASSOCIATION

JUNE 10, 2003

Good morning, Mr. Chairman and Members of the Committee. My name is Harry

Blunt and I am President of Concord Coach Lines, a private over-the-road bus company based in Concord, New Hampshire, that provides service in New England.

Concord Coach Lines and its affiliate, Dartmouth Coach are one of the largest independent motorcoach companies in New England. We provide daily intercity service

to Boston and Logan Airport from 34 cities and towns in Maine and New Hampshire. Thirty-one of these cities have no other form of intercity public transportation.

Concord carried 670,000 passengers in 2002 and employs 134 full and part-time

personnel.

I am testifying on behalf of the American Bus Association. The ABA is the trade

association of the over-the-road bus industry. ABA has 3,400 members, of which

some eight hundred are motorcoach operators and 200 are tour operators. The

remaining members are hotels, tourist destinations, and attractions. I am the immediate past Chairman of the ABA’s Board of Directors and currently serve as Chairman of the ABA’s policy committee. Before I begin speaking on our issues with

SAFETEA, I would like to present a few facts about the over-the-road bus industry.

The industry that I have served for over 30 years transports 774 million U.S. passengers each year. We transport more people than the airlines, and we transport

more passengers in 2 weeks than Amtrak does in a year. Further, we serve more

than five thousand cities and towns in regularly scheduled service, again more than

any other mode of public transportation. Between fixed route, intercity, commuter

service, charter and tour, and airport shuttle service the industry is involved in the

life of virtually all Americans. For example, Eyre Bus Service, an ABA member,

provides commuter service to DC for over 2,500 Maryland residents every day; in

addition, intercity bus companies provide fixed route, scheduled service to 79 communities in Alabama. This is far more than the combined number of communities

served by air and Amtrak. A map detailing this service has been provided to the

Committee.* ABA members provide these services without any meaningful subsidy

from the Government. A report by Nathan Associates, Inc.* details the Federal subsidies to passenger modes between 1960 and 2001. This report is dramatic evidence

of the lack of subsidy given to intercity bus transportation. The industry buys its

own buses, builds its own facilities, trains its own personnel and maintains its own

65

equipment. And since the attack on America on September 11, we have taken our

share of losses.

My subject today is the Administration’s bill to reauthorize the Federal highway

bill, the so-called TEA–21. The current bill is called SAFETEA. Whatever its name,

it is a bill vital to the health and well being of the over-the-road bus industry, and

we at the ABA no less than you on the Banking Committee want to get this right.

While there are many good provisions in the bill that we support, there are also

sections of the bill within the jurisdiction of this Committee that are largely a disaster for the over-the-road bus industry.

Our first and most important problem with SAFETEA may be summed up in two

words: ‘‘transit competition.’’ The private bus industry is under assault. Today, we

face illegal competition from transit agencies that ignore Federal rules regarding the

provision of transportation services provided by the private bus operators; from

transit agencies that ignore Federal Transit Administration (FTA) cease and desist

orders and continue to provide illegal transportation; from short sighted policies by

local governments like that of the District of Columbia which wants to spend over

thirty million Federal dollars to operate a tour bus service in a city which has three

private sightseeing tour operators that have seen drastic declines in their own

business.

In short, we face withering competition from transit agencies that are provided

significant Federal and/or local funding. Agencies that then take that money and

use it against the private operators and ultimately against the public. The most blatant examples of this ‘‘competition’’ are found in the fight to provide ‘‘charter’’ service to the public. When I speak of ‘‘charters’’ I mean groups of people seeking to

travel to some destination. Charters form a significant portion of our business. Indeed, nearly all ABA members provide some charter services to the public.

FTA regulations require federally funded transit agencies to notify the local private companies, ABA, and FTA if there is a charter opportunity that it wishes to

pursue. The ABA notifies its members and FTA regulations require that the publicly

funded transit agency allow the private, unsubsidized operator to provide the service

if it is ‘‘willing and able’’ to do so. If there is no private operator available or willing

to provide the service, the transit agency is free to do so.

As ABA has documented, transit agencies often do not follow these rules. Some

transit organizations fail to follow the notification procedures at all; others provide

the service before the determination of a ‘‘willing and able’’ private provider is made.

Further, publicly funded transit agencies often use their heavily subsidized fleets to

charge prices well below cost to win charter work. Most egregiously, as I referred

to earlier, at least one transit agency has ignored two FTA orders to stop operating

its charter service. Not only has it continued to operate this service, but also the

transit agency’s only penalty so far has been FTA’s willingness to overlook the continuing violation while working with it to find a way to allow it to continue to operate. Reportedly, FTA is accomplishing this by determining that transit agency’s

charter service to an annual golf tournament event is a ‘‘regularly scheduled’’ service and therefore not charter service. In the meantime, ABA member Kemp’s Bus

Service loses revenue from the event to an outlaw public transit agency and struggles to survive. A situation the charter rules are intended to prevent.

Where this issue is relevant to SAFETEA is embodied in Section 3020 of the bill.

That section would give the Secretary of Transportation the authority to suspend

the charter rules if the transit could say that it was providing service to the elderly

or the disabled. This section is a dagger in the heart of the charter rules. The essence of private charters in the United States is the provision of service to the ‘‘elderly.’’ To allow anyone to abrogate the ‘‘willing and able’’ test in this circumstance

would be to throw out the charter rules. Creating an exception for ‘‘disabled’’ transportation from the charter rules is no less pernicious. ABA is aware of no instance

where disabled citizens have been denied the use of public transportation. Indeed,

the Americans with Disabilities Act (ADA) spurred Congress in TEA–21 to establish

a fund for private operators to equip their coaches with wheelchair lifts. The fund

has been oversubscribed each year and currently provides seven million dollars for

this purpose. The public transit agencies cannot say that the private bus operators

are failing to provide transportation to the disabled and the only remedy is to dispense with the rules.

On the contrary, the charter rules clearly provide that if there is no ‘‘willing and

able’’ private operator the business opportunity is open to all bus operators public

as well as private. Any suggestion that the charter rules are preventing the publicly

funded transit agencies from meeting unmet needs is nonsense.

ABA has three remedies to correct the transit competition imbalance. First,

SAFETEA’s Section 3020 must obviously not be enacted. Second, there must be penalties that make sense when a transit agency violates the charter regulations. At

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present, FTA says that its only remedy for such a violation is to bar the transit from

receiving any of its Federal funding. Not surprisingly, this penalty has never, and

in my opinion, will never be used. In place of this nonexistent penalty, we suggest

a penalty of a percentage of the transit is funding for the first violation of the charter rules, a greater percentage for a second violation, and so on. And third, the industry needs clear definitions of ‘‘charter service’’ and ‘‘sightseeing service.’’ It cannot be that a once a year charter (for example, the Alabama-Mississippi football

game) is a regularly scheduled event. If any agency can sustain such a definition

than there are no charter rules.

At the end of my testimony, I have appended ABA proposals to change

SAFETEA’s Section 3004 and amend 49 U.S.C. 5302 and SAFETEA’s Section 3020

and revise 49 U.S.C. 5323(d). These proposals define charter bus and sightseeing

bus transportation and add a complaint process and workable penalties to the FTA

tool kit in addressing this problem. The ‘‘bright line’’ definitions are designed to

eliminate the confusion that seems to overcome the public transit agencies when

charter bus operations are offered, the complaint process and penalty provision will

give parties a forum within which problems arising out of charter opportunities can

be resolved.

An important problem for the bus industry and the Nation is SAFETEA’s halfhearted solution to equipping buses with wheelchair lifts. This problem is embodied

in Section 3036 of the bill. TEA–21 authorized funding to meet the Federal mandate

requiring wheelchair lifts on all fixed route over-the-road and charter motorcoaches.

The Transportation Research Board (TRB) has put the annual cost of the mandate

at forty million dollars. However, the wheelchair lift program over the life of TEA–

21 has been funded at approximately 15 percent of its annual cost. To put one

wheelchair lift on a new or used bus costs between $35,000 and $40,000. In our industry, where the majority of our operators have 10 or fewer motorcoaches, the cost

of this mandate is prohibitive. As I noted previously, the wheelchair lift program

is oversubscribed each year. An increase to at least 50 percent of the mandate’s cost

is warranted and necessary.

A second problem with SAFETEA is found in Section 3011, the ‘‘New Freedom’’

program. This program establishes a competitive grant program which will provide

funds for ‘‘new transportation services and transportation alternatives beyond those

required by the Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et seq.),

including motor vehicle programs that assist persons with disabilities with transportation to and from jobs and employment support services.’’ While we obviously applaud more funds for transportation for the disabled, we believe the initiative is wrong in its insistence on ‘‘new transportation services and

alternatives.’’ As drafted, it excludes the ability of any grant recipient to fund wheelchair lifts on buses, even while allowing the purchase of motor vehicles. Wheelchair

lifts are the method by which the overwhelming majority of physically disabled citizens get to work; to not fund this tried and true method would, I believe, disadvantage many of our citizens in the service of this ‘‘new freedom.’’ In sum, ABA believes

that funding for wheelchair lifts should be allowed under this section.

Also regarding the New Freedom Initiative, Section 3034 of SAFETEA allows the

grants to be increased depending on increases in the efficiency of the transportation

service offered. We suggest that the program be modified to allow the Secretary to

consider cost reductions in determining efficiency.

In Section 3002 of SAFETEA the term ‘‘mass transportation’’ is replaced with

‘‘public transportation.’’ We are concerned that the change could destroy the primary

purpose of Federal transit subsidies, which is to provide for local transportation

services, and expand funding for those programs beyond that core focus to a broader

array of services in direct competition with the intercity bus industry.

Our concern is due to the fact that ‘‘public transportation,’’ as that term is commonly understood, means ‘‘transportation to the public.’’ Thus, we believe it is possible to interpret the change as allowing transit funds to be spent, for example, on

Amtrak, since the rail carrier provides public transportation; or to allow transit

funds to be spent to compete with Greyhound Bus Lines in intercity service. By contrast, the term ‘‘mass transportation’’ has a 30-year history of usage as denoting

‘‘local’’ transportation services with no opportunity to expand range of services a

transit agency can provide.

There is a solution. Insert the word ‘‘local’’ before ‘‘public transportation’’ in Section 3002. This change would ensure the revised Section 3002 would not broaden

the range of allowed transit services into providing intercity bus or rail services but

rather to concentrate on the transits’ core mission: ‘‘local transit service.’’

Less this Committee believe that ABA has nothing good to say about SAFETEA,

one provision we strongly support is Section 6002 and the bus industry’s counterpart H.R. 1394, the Intermodal Transportation Act. Both H.R. 1394 and SAFETEA

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propose the creation of a new competitive grant program for intermodal transportation centers. All modes of public transportation—intercity bus, intercity rail,

urban mass transit, and rural transit should be linked by intermodal transportation

centers so that seamless public transportation becomes a reality. The intermodal transportation center fund, $100 million annually under H.R. 1394 and $85 million annually under SAFETEA, solves this problem by providing sufficient seed money to States and communities to make these intermodal projects happen. Some States, such as my home State of New Hampshire, have taken the lead

in developing intermodal transportation centers, in cooperation with the private sector. Those centers, such as the ones in Concord and Portsmouth, have been tremendously beneficial in enhancing the attractiveness of public transportation. The proposed transportation center program would enable other States to do the same.

Another major component of creating a seamless, comprehensive public transportation system is the need to link rural communities with the Nation’s aviation and

rail systems. Thousands of rural communities need connections to the national air

and rail system, yet only a handful receive such connecting service from the Essential Air Service program. Buses now provide unsubsidized service to thousands of

rural communities; with relatively little Federal support, existing or new bus service

could link these communities to air and rail hubs.

H.R. 1394 creates a $35 million per year essential bus service program, which

would provide States with funds to contract for public surface transportation services to link rural communities to airports and train stations. This program would

provide a potential link to the air and rail systems for the thousands of communities

without EAS service.

Integrating public transportation information systems is another important part

of creating a seamless public transportation network. Such a system is needed so

that with one call or Internet visit, consumers can access fare, schedule, and location information for all public transportation modes. This is particularly important

for people with disabilities. Some States and service providers are working toward

this goal, but a coordinated Federal effort is needed. Both H.R. 1394 and SAFETEA

have such a program. Frankly, we prefer the H.R. 1394 model because it separates

the information system program from the intermodal terminal program which we

believe would promote administrative simplicity.

ABA strongly supports the SAFETEA proposal to increase the Section 5311 rural

transportation funding by roughly 50 percent. This means a comparable increase in

the Section 5311(f) rural intercity bus program. Overall, rural transportation providers have been very effective in providing a great deal of essential transportation

with relatively little funding; the rural intercity bus providers particularly stand out

in this regard. For example, in 2002, Greyhound provided at least daily, fixed route

service to 332 communities with $4.7 million in Section 5311(f) operating subsidies.

This is an exceptionally productive use of Federal funds. Expansion of 5311(f) will

enable States to do more contracting with intercity bus operators to connect many

more of the thousands of rural communities that are not connected to the Nation’s

public transportation network.

A matter related to the intermodal terminal development issue detailed above is

FTA’s insistence that FTA intermodal funds can be used for the transit and intercity

rail portions of intermodal but not the intercity bus portions of such terminals. This

is contrary to good intermodal policy and discriminates against rural communities

that rely on intercity bus service. Indeed, this interpretation is inconsistent with one

of the stated purposes of Section 5309 of the Federal Transit Act, which is to cover

the capital costs of coordinating all forms of public transportation. H.R. 1394 provides language that clarifies that FTA funds can be used for all transportation portions of intermodal transportation centers.

SAFETEA proposes a variety of innovative financing mechanisms in order to

enhance funding sources for new transportation investments, and there have been

various Congressional innovative financing proposals. We agree that innovative financing can play a role in providing additional sources of revenue for transportation

projects in these tight budgetary times. One of the Administration’s proposals is to

broaden the eligibility for private activity bonds to include highway projects and

surface freight facilities. We believe that intermodal passenger transportation centers and intercity bus facilities should also be included as eligible projects, given the

important role that they play in our Nation’s passenger transportation network.

There are two final changes to SAFETEA that we urge on the Committee. First,

we suggest that Section 3012, which reauthorizes the major capital investment program, be amended. The Administration proposes that the program be limited to a

‘‘New Starts’’ program to provide grants for capital costs incurred when coordinating

public transportation with other transportation, the costs of introducing new technology though innovative and improved products into public transportation, and the

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development of corridors to support public transportation. However, it is not certain

as written that the capital investment funds can be applied to the intercity portion

of intermodal facilities. Again, at the end of my testimony, I have appended legislative language taken from H.R. 1394 that would eliminate this problem.

Second, Section 3010 provides additional ‘‘incentive’’ funding for rural transit

agencies that are increasing ridership. The problem here is that private bus operators that also provide rural transportation services are not included in the incentive

funding. Rural transportation by private operators is provided under the 5311(f)

program. Simple fairness would seem to insist that if, in providing service under

the 5311(f) program, an operator shows increasing ridership, that operator should

be eligible for such incentive funding. Moreover, not to do it the ‘‘fair’’ way could

lead to transit agencies using their cost advantage to increase ridership at the expense of the private operators. Thus, private operators would be at a double disadvantage. First, by the transit’s use of its cost advantage to undercut the private

operators, and then its receipt of an incentive payment for increasing ridership at

our expense.

It is fair to say that what has been presented here is a short list of the problems

that SAFETEA presents for the private bus industry. However short the list, each

problem is of enormous significance to the private bus industry. Like other modes

of transportation, the private operators have lost jobs, operators, and revenue due

to the effects of September 11, the downturn in the economy, and the failure of the

American people to travel as they have in the past. Unlike other modes there is no

significant private bus subsidy and no Congressional bailout of the industry. We

seek none here.

However, we do seek to level the ‘‘playing field’’ that we share with the public

transit agencies. We do seek to have FTA treat us in law and regulation as they

do the public agencies. We do seek to provide the most service to the most people

for the least cost. All of these can be achieved by the changes to the SAFETEA bill

we outline here.

Thank you for your time and attention. I will be happy to answer any questions.

—————

PREPARED STATEMENT OF JIM SEAL

FORMER CONSULTANT, FEDERAL TRANSIT ADMINISTRATOR

U.S. DEPARTMENT OF TRANSPORATION

JUNE 10, 2003

Achieving Better Outcomes—Incentive-Based Performance

There should be broad support for SAFETEA’s explicit recognition that the mission of Government should be congestion mitigation and relief, for example,

maximizing mobility with available funds. The proposed new performance-based incentive program, which could be greatly expanded by Congress, is an initial first

step in realizing the President’s call for a more customer-oriented and outcomebased Government.

Congress has understood the importance of maximizing mobility (§ 5301) over several decades by embedding ‘‘efficiency’’ as one of its guiding principles. In fact,

Congress found that the welfare of an urbanized society depended on an ‘‘efficient’’

and ‘‘economical’’ transportation systems in and between urban areas [§ 5301 (3)].

Regrettably, local agencies do not pay enough attention to improving efficiency.

This has resulted in decreased mobility. For example, in Santa Clara County, 29

percent of bus service will be cut by next January in comparison to service levels

2 years ago.

When competition is injected into the delivery of public transit as it has in some

urban areas across the country, but more extensively throughout the world, private

transportation providers have assisted transit agencies to achieve efficient customeroriented service as called for by the President. All of these initiatives are consistent

with several Federal statutes designed to ensure that private enterprise is involved

‘‘to the maximum extent feasible’’ (§ 5306).

Consistent with this goal, SAFETEA preserves and reinforces existing private

enterprise provisions in one important way; SAFETEA does not discriminate against

private transportation providers when ensuring that MPOs are in compliance with

Federal laws. Specifically, SAFETEA does not preempt the Secretary from making

a finding of MPO compliance with private enterprise participation requirements

during the Secretary’s certification process (§ 5203 Metropolitan Transportation

Planning).

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Additionally, including private sector entities in § 5305 as a grant recipient in a

new planning program for the development of transportation plans and programs

to plan, engineer, design, and evaluate a public transportation project will result in

the creation of more cost-effective solutions that increase mobility and reduce air

pollution.

The new Planning Capacity Building Program in § 5305, allowing the private sector to be involved in innovative practices and enhancements in transportation planning, has the potential to facilitate more public/private cooperative ventures at the

early planning stage of project development.

Reinforcing these private enterprise involvement requirements in SAFETEA and

expanding private sector involvement in the planning process as stated above are

consistent with the President’s recent Federal procurement announcement expanding competition in delivering Federal services by, in part, broadening the definition

of what is inherently the work of the private sector.

Pursuant to this new Federal policy and to fully achieve the high performance

goals of SAFETEA, local barriers to the provision of new service by the private sector should be eliminated as a condition of Federal funding.

Private transportation carriers provide fixed route, handicapped-accessible and

charter services nationwide in urban and rural areas and therefore private sector

participation in federally funded activities should be greatly expanded.

To allow federally funded agencies to provide new service presently operated by

the private sector or potentially operated by private enterprise in the future,

whether these services are subsidized or not, or whether these services are public

transit or not would be inconsistent with existing Federal statutes, regulation, and

Administration policy.

Competition vs. Monopoly—A Case for Enforcing Private Sector

Participation

California provides an excellent example of two different models of transit delivery. In Santa Clara County (Silicon Valley), the VTA has a monopoly of over 95

percent of fixed route transit service, while in San Diego County a substantial portion of transit service is subjected to competition. It should be noted that while the

Silicon Valley is in the forefront of competition in high-tech and software development, its transit system embraces an anticompetitive model. The advantages of

transit competition were highlighted in a recent San Jose Mercury News Op-Ed article authored by the San Jose Chamber of Commerce (included at the end of my

statement).

San Diego County in Comparison to Santa Clara County

In San Diego County over 36 percent of bus service is subjected to competition totaling $44 million annually, and from 1979 to 2001 San Diego’s inflation adjusted

costs to produce an hour of service have decreased by 34 percent, while over the

same period inflation adjusted costs at VTA have increased 18 percent.

Other performance indicators under a competitive vs. monopoly environment have

produced the following results from 1979 to 2001:

• Bus and light rail cost per passenger mile have decreased an inflation adjusted

32 percent in San Diego while bus and light rail cost per passenger mile at VTA

increased 13 percent; • From 1979 when gross budget levels were roughly similar, total inflation adjusted

bus expenditures increased 36 percent at San Diego in comparison to total inflation adjusted bus expenditures increasing 150 percent at VTA; • In 2001, San Diego’s total bus budget was just under $100 million, while VTA’s

bus budget was slightly under $200 million—a $100 million difference in favor of

competition; • In 2001, total bus boardings in San Diego were approximately 10 million higher

than VTA; • In 2001, bus operating ratio in San Diego was 42 percent in comparison to 13 percent at VTA; and • In 2001, light rail operating ratio in San Diego was 58 percent in comparison to

12 percent at VTA. Both systems operating budgets are of similar size.

In 2001, San Diego’s contract services cost per revenue mile ($3.76) was 42 per- cent of VTA’s in-house cost per revenue mile ($8.89). Labor costs as a percent of

total operating budgets represent approximately 70 percent for both entities. Even

when adjusting for differences in ‘‘mean hourly’’ wage estimates between San Diego

and San Jose (U.S. Department of Labor Bureau of Labor Statistics 2001 State

Occupational Employment and Wage Estimates—California), San Diego’s unit cost

of $4.12 per revenue hour is still less than 50 percent of VTA’s unit cost per revenue mile.

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There are several other successful competitive models in California, notably Foothill Transit in the San Gabriel Valley of Los Angeles County. From 1986 to 2001,

Foothill Transit increased service hours over 100 percent and boarding over 120 percent over what would have been provided under in-house operation of the dominate

regional operator, LACMTA.

Internationally, center-left and center-right countries in Europe have embraced

competition much more extensively then in the United States. For example:

• In London, 6,500 buses almost three times LACMTA and double NYCMTA are

competitively tendered;

• Five LRT systems in greater London are competitively tendered; and

• The Stockholm, Sweden transit system comprising metro rail, light rail, and bus

and commuter rail is under a competitive tender.

There are no consequences if a noncompetitive transit system fails to control costs

or fails to meet the highest standards of service. Services that are competitively procured must meet numerous service quality standards and performance failures can

lead to liquidated damages including cancellation of a contract.

Unnecessary Expansion of Special Labor Protection Provisions § 5333(b)

The Job Access and Reverse Commute (JARC), through a more predictable funding source, and the President’s New Freedom Initiative, have the potential to provide more mobility for those that need access to jobs and serve those that go beyond

ADA service requirements.

However, these programs should not be subjected to outdated labor protection

provisions ostensibly to protect collective bargaining rights. State laws and the National Labor Relations Act now provide full collective bargaining rights for employees. The original intent of ‘‘13(c)’’ in the 1960’s was to provide employees collective

bargaining rights in the absence of State laws protecting such activities. This is no

longer the case.

First, there is a great need to reform this section to correct past abuses. Historically, the certification process under 13(c) has been misused to favor one side in

management employee relations. Local transit managers were forced to accept certain provisions favorable to national union interests that would not have been

agreed to if critical Federal funding had not been unacceptably delayed. These actions violated not only NLRA, but also the private sector participation statutes in

Title 49 CHAPTER 53. Although some minor reforms have been instituted like time

constraints, there are ways to frustrate the process. Further, the number of years

of protections should be reduced in line with labor protect reforms achieved by small

railroad carriers.

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Competitive Contracts Could Help Avoid Big VTA Service Cuts

By Jim Cunneen and Dave Fadness

Service cuts proposed by the Valley Transportation Authority would unfairly punish those who desperately rely on public transit the most: working families. VTA’s

budget predicament is not their fault.

Falling sales tax receipts are blamed. But VTA’s costs are equally at fault; they

are spiraling out of control.

From 2001 through 2004, 29 percent of transit service will be cut, but the cost

per hour of service over the same period will increase 47 percent. Meanwhile, VTA’s

farebox revenue, in part due to heavily subsidized fares, compares poorly to similar

operators in other metropolitan areas.

To solve the problem, however, decision makers are focusing too narrowly on the

revenue side, proposing new taxes and higher fares as the first order of business.

Instead, they should place first emphasis on cutting any and all costs that do not

directly produce transit service. Why? Because VTA can control costs to a far greater degree than it can revenue. Before going to the voters to ask for more revenue,

VTA must do everything possible to assure the community that it has done all it

can to improve efficiency and control spending.

Is there a way to stem the red ink in VTA’s budget while retaining (or improving)

services, before raising fares or taxes?

Competition, may provide an important part of the answer. Experience in the Bay

Area and throughout California proves that public/private transit partnerships work

in the public’s best interest, delivering more transit service at less cost. It is time

for VTA to give it a try. Here are a few examples:

• The City of Los Angeles and 21 San Gabriel Valley cities operate more than 475

buses under competitive contracts. The San Gabriel cities’ joint powers agency,

Foothill Transit, cut operating costs 30 percent while increasing bus service hours

100 percent;

• San Diego competitively contracts more than 36 percent of its bus service—totaling $44 million annually. Since 1979, its inflation-adjusted cost per hour of service

has decreased 34 percent. VTA’s has increased more than 18 percent; and

• In the San Francisco Bay Area, five major transit agencies contract out all of their

transit systems; SamTrans contracts out part. Even Caltrain is a competitively

contracted system.

VTA is cutting service 29 percent. If VTA reduced its per-hour bus costs by the

same percentage, its costs would still be high, but its projected 2006 deficit of $50

million would evaporate.

How would competitive contracting work? California transit agencies that

outsource typically provide some or all of the equipment. They require contractors

to provide the labor force to pay local competitive wages and benefits and to maintain high standards already demanded by VTA.

Although contractors use a smaller workforce to perform the same amount of service, they usually use organized labor and are subject to damage payments for poor

or missed service.

In most cases, the public agency also bids for the service contracts, encouraging

cost efficiencies and improved service by both public and private sectors.

VTA’s goal should be to minimize proposed service cuts and job losses. We suggest

that it start now, boldly taking advantage of this opportunity to competitively contract high-subsidy bus routes, requiring contractors to give preference in hiring to

VTA employees. We believe the resulting savings would protect jobs and diminish

service cuts.

Competitive contracting should also be considered for the management of VTA.

The 1984 Measure A Traffic Authority is a local example of how effective this approach can be: a $1.2 billion multiyear project was successfully managed by only five

people. Huge savings could result from improvements in management efficiency, effectively making more of existing revenue available to serve transit riders.

That should be VTA’s goal. We can avoid dramatic tax increases and fare increases by embracing new approaches. Other California transit operators are doing

it with great success, relying on the same powerful model that makes our economy

the world’s strongest: competition.

Jim Cunneen is president and CEO of the San Jose Silicon Valley Chamber of

Commerce and a member of the VTA’s Ad-Hoc Financial Stability Committee; Dave

Fadness is the former vice chair of the Measure B Citizen’s Watchdog Committee.

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RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED

FROM NORMAN Y. MINETA

Security and Terrorism

Q.1. If the Department of Homeland Security is the appropriate

agency to address this issue, do you think the fiscal year 2004

budget request provides sufficient funding to address the significant threats facing our transit systems?

A.1. The Transportation Security Administration in the Department of Homeland Security (DHS) has primary responsibility for

transportation security. The Department of Transportation plays a

supporting role to assist DHS in meeting its mandates. Since September 11, the Federal Transit Administration (FTA) has continued to provide technical assistance, training, and research. Just as

it has done with safety and crime prevention, FTA’s homeland security activities work to integrate security into all aspects of transit

operations, from planning, design, and construction to operations

and maintenance. FTA activities are coordinated with TSA, to ensure that they augment and compliment DHS strategies as this

new agency comes fully online. Through close cooperation and coordination of DOT and DHS programs and activities, we are working to ensure that resource allocation reflects the risks and the requirements of each mode of transportation.

Q.2. What was the Department of Transportation’s rationale for

not signing the expected memorandum of understanding on transit

security with the Department of Homeland Security?

A.2. The Department of Homeland Security’s (DHS) Transportation

Security Administration (TSA) has primary responsibility for transportation security policy. The Department of Transportation (DOT)

plays a supporting role, assisting DHS with implementation of its

security policies. As DHS forms Federal transportation security

policy, both TSA and DOT have committed to broad and routine

consultations through numerous formal and informal mechanisms

operating at all levels within the two organizations. These consultative mechanisms are working, and both departments will continuously evaluate how to promote effective cooperation.

The principles of this cooperation are laid out in several interagency memoranda of understanding signed by TSA and DOT, and

most importantly, by the exchange of letters between Secretary Mineta and TSA Administrator Jim Loy in February 2003. At Secretary Mineta’s request, Deputy Secretary Michael Jackson has

served since March 1 as DOT’s liaison to Administrator Loy for the

coordination of all nonroutine policy issues, intelligence analysis,

public and transportation industry communication, and operational

planning. In addition, Secretary Mineta has designated the Office

of Intelligence and Security as the official point of contact between

DOT and TSA. At this time, DOT does not see an immediate need

for additional legal mechanisms to coordinate responsibilities between the two agencies. As TSA works to strengthen its capabilities beyond aviation, and after consultation with Administrator

Loy, DOT has continued for now a few of our preexisting programmatic efforts. For example, we continue to work with transit

operators and State transportation executives to inform and

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educate them regarding security awareness and best practices to

enhance security. These efforts are not policymaking activities. Instead, they are intended during the transition to augment and complement TSA’s work, as the new agency continues to grow its staff,

programs, and experience in working with diverse transportation

sectors. In the months ahead, DOT’s role in such security educational efforts will likely decrease.

‘‘One DoT’’ Policy

Q.3. Mr. Secretary, you have often espoused a ‘‘One DoT’’ policy to

describe your view that DoT is truly intermodal and does not favor

one mode over another. Could you reconcile this ‘‘One DoT’’ policy

with the decision to flat line the FTA’s budget, end the guarantee

of the transit’s General Fund resources, and increase the State

match required for new transit systems?

A.3. Our reauthorization proposal does not favor one mode of transportation over another mode. In fact, under the Safe, Accountable,

Flexible, and Efficient Transportation Equity Act of 2003

(SAFETEA), transit funding would increase to $46 billion over the

6-year authorization period—a 28 percent increase over the $36 billion authorized in TEA–21. Highway funding under SAFETEA

grows 18 percent compared to its funding under TEA–21. So we do

not believe we shortchanged transit at the expense of highways.

Our SAFETEA proposal continues the policy established in TEA–

21 to ‘‘firewall’’ or ‘‘guarantee’’ spending from the Mass Transit Account of the Highway Trust Fund, just as funds for highways from

the Trust Fund are guaranteed. Approximately, 80 percent of

FTA’s funding comes from the Mass Transit Account. In fact, transit has been the only Federal program to enjoy ‘‘guaranteed’’ General Funds.

With regard to the proposed maximum Federal New Starts share

of 50 percent, there is no evidence to suggest that a 50–50 share

requirement will deter transit project development. In fact, the

overall Federal New Starts share today is 49 percent, so we are,

to a certain extent, simply codifying existing practice. Furthermore,

an additional 30 percent of project costs can be funded with other

Federal funds, such as from the Congestion Mitigation Air Quality

program or the Surface Transportation program. States and communities already take advantage of this flexibility as seen by the

more than $9 billion transferred from these two highways programs to support transit projects. In fact, we believe that imposing

a 50 percent Federal New Starts share maximum will help level

the playing field among communities seeking New Starts funding.

Combined with other SAFETEA changes, such as making nonfixed

guideway projects eligible for New Starts funds, this proposal will

give more communities the opportunity to pursue major capital

transit projects.

Elderly and Disabled Riders

Q.4. The Administration has proposed a ‘‘New Freedom Initiative’’

for disabled riders. What is the rationale for this new program and

why wouldn’t it be more appropriate to simply increase funding for

the existing and successful Elderly and Disabled transit program?

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A.4. The Department of Transportation’s program is part of the

President’s broader New Freedom Initiative (NFI), which is intended to help Americans with disabilities by increasing access to

assistive technologies, expanding educational opportunities, increasing the ability of Americans with disabilities to integrate into

the workforce, and promoting increased access into daily community life.

The NFI is also building on the Supreme Court’s 1999 Olmstead

decision in order to promote maximum independence and facilitates

integrating individuals with disabilities into community life. Transportation can be a particularly difficult barrier to work and other

community activities for Americans with disabilities. The lack of

adequate transportation remains a primary barrier for people with

disabilities, as evidenced by the fact that one-third of people with

disabilities report that inadequate transportation is a significant

problem.

The New Freedom program for transportation addresses these

significant remaining transportation barriers not addressed by the

Americans with Disabilities Act (ADA). The ADA addresses the accessibility of existing transportation services and facilities. It does

not address the service gaps that continue to exist for persons with

disabilities who experience a seventy percent unemployment rate.

The New Freedom funding is directed at providing additional

transportation services that can provide persons with disabilities

new transportation connections to jobs and essential community

services and activities needed to foster independence and integration into the community.

The existing Section 5310 Elderly and Disability Program provides funding to assist primarily nonprofit entities in acquiring

vehicles to provide special transportation services. This transportation is frequently associated with the delivery of a particular

human service program for the elderly or individuals with disabilities. Section 5310 funding is often used for replacement vehicles

to continue existing special human service transportation services.

The proposed New Freedom program moves beyond existing specialty human service programs to address a broader range of transportation service gaps that exist for persons with disabilities.

Therefore, under the NFI, services may be provided by public

transportation, private transportation, and/or nonprofit organizations. The program funds will be used for activities identified in a

local coordinated plan developed by stakeholders in the local community served.

The program will provide operating, as well as capital, funding

to achieve these purposes. For example, the New Freedom funding

could be used by a community to deliver additional paratransit

services to persons with disabilities living beyond the three quarter

mile limit covered by the ADA complementary services, or to provide funding to help purchase accessible taxicab vehicles, so that

persons with disabilities can more easily avail themselves of this

travel option. In many communities, accessible taxis provide a

quick-response, real-time service to places and during times not

served by existing transit and special human service transportation

operators.

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Q.5. In discussing SAFETEA with advocates for the disabled, they

have voiced concerns with the New Freedom Initiative. While the

disabled community supports resources that would allow the development of innovative transportation services for people with

disabilities, these advocates are concerned because the Administration’s reauthorization proposal is woefully underfunded, and there

is no additional money to pay for this new initiative. It also appears that the proposal would allow a State to transfer funds from

this initiative to other transportation programs. Given the fiscal

crises most States face, the lack of adequate funding in the Administration’s proposal, and the chance a State could transfer ‘‘New

Freedom’’ dollars to other transportation programs, where is the

assurance that funds will actually be used to provide transportation services to people with disabilities?

A.5. While the SAFETEA proposal includes the ability to transfer

funds for the purpose of reducing the administrative burden on

grantees, it also ensures that, if funds are transferred to other programs, the funds must continue to be used for the originally identified purpose. Therefore, if New Freedom funds are transferred, for

example, to the FTA Section 5311 nonurbanized area program,

these transferred funds must be used to support New Freedom

transportation purposes. The transfer of these funds to other FTA

programs affords grantees the opportunity to file a consolidated application, rather than multiple applications for New Freedom,

JARC, Section 5310 funding. In addition, SAFETEA provides for

further assurance that the transportation needs of persons with

disabilities are met by requiring communities to address the needs

of persons with disabilities, in addition to the elderly and low-income individuals, through a locally developed, coordinated public

transit-human services transportation plan.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SARBANES

FROM NORMAN Y. MINETA

Q.1. I understand that the Administration is proposing an incentive tier in the formula programs, to be awarded to transit agencies

that increase ridership. Why does the Administration believe such

an incentive is necessary for large urbanized areas, given that the

formula for these areas already includes passenger miles traveled

as a factor in its distribution of funds, rewarding areas with higher

ridership? Also, there are some transit agencies which already

carry a large percentage of local residents and have limited ability

to increase ridership without significant additional funding to increase their carrying capacity. How does the Administration respond to their concerns that they will, in effect, be precluded from

participating in this incentive program?

A.1. The performance incentive funds in the urbanized area formula program (Section 5307) would be apportioned using an administrative formula based on the percentage increase in ridership

and accounting for the size of the community. The formula may

also take into consideration efficiency of service in the urbanized

area. In order to qualify for the incentive, transit systems would

have to ensure that levels of ridership among elderly individuals,

individuals with disabilities, or low-income persons are not negatively affected. Because not all systems currently collect data on

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ridership among these specific populations, a portion of the incentive funds will be made available for enhanced data collection in

the initial years of the authorization period.

Performance incentive funds will also be available to nonurbanized areas. Since nonurbanized or rural transit systems tend to

focus their services largely on ‘‘transit dependent’’ populations (the

elderly, individuals with disabilities, and low-income persons), the

incentive funds for rural areas will be distributed based on increases in overall ridership. The incentive formula may also take

into consideration efficiency of service in rural areas. The entire

amount available for incentives in fiscal year 2004, and a portion

of the funds available during the subsequent 2 years, will be made

available to the States to establish data collection systems, since

States are not currently required to report ridership data for nonurbanized areas to FTA’s National Transit Database.

FTA plans to consult broadly and seek public comment on options and plans to implement the performance incentive program,

so that concerns about such issues as capacity can be appropriately

considered.

Q.2. Mr. Secretary, in your testimony you state that 40 percent of

counties in this country have no public transportation. On what do

you base that figure?

A.2. In the mid-1990’s, the Community Transportation Association

of America (CTAA) compiled an inventory of rural transit systems

funded by the Federal Transit Administration. This study found

that approximately 40 percent of the nonmetropolitan counties in

the United States had no public transit system. This figure has

been widely used as an indicator of the unmet need for rural transit services. A subsequent update of the inventory, published in

2000, did not provide comprehensive county data, but did indicate

that the significant increases reported in rural transit ridership

and vehicle revenue miles were primarily a result of improved levels of service offered by existing transit providers, rather than an

expansion of the network of providers.

Q.3. Mr. Secretary, in your testimony you state that SAFETEA, ‘‘projects requesting less than $75 million (would) be subject to a

simplified New Starts process. We would utilize the same evaluation criteria established by Congress for projects seeking more than

$75 million in funding from New Starts, but reduce the number of

New Starts hurdles and simplify the evaluation process for these

projects.’’ How do you plan to simplify the evaluation process?

What hurdles are you referring to, and how would you reduce their

number?

A.3. FTA has not fully defined its development and evaluation

process for projects seeking less than $75 million in New Starts

funds, and will not do so without close consultation with the transit

community. However, we believe that there are a number of areas

with potential for simplification. For example, FTA will explore

ways to speed its project approval process for these projects. Currently, proposed New Starts investments must be approved by FTA

to enter into the preliminary engineering and approved again in

order to enter into the final design phase of project development.

Projects requesting less than $75 million in New Starts funds could

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be subject to a single approval and/or reduced requirements. In

developing any simplified evaluation process, FTA will take a common sense approach to speed project delivery, while ensuring continued stewardship of Federal tax dollars.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR DOLE

FROM NORMAN Y. MINETA

Q.1. Mr. Secretary, I am concerned that applications for Full Funding Grant Agreements (FFGAs) under the New Starts process originating from the same State may be subjected to a prejudice in

awarding multiple FFGAs within the same State and same fiscal

year that would delay the progress of these projects. Can you

please confirm this is not the case?

A.1. The number of Full Funding Grant Agreements (FFGAs) in a

State is not a factor in evaluating proposed New Start projects for

new FFGAs. In 2001, FTA awarded four FFGAs in a single year

to grantees in Illinois: One to the Chicago Transit Authority for its

Douglas Branch reconstruction, and three to the commuter rail

operator in suburban Chicago (the Regional Transportation Authority, Metra) for construction of its extensions in the North Central, Southwest, and Union Pacific West corridors. In 2000, FTA

awarded two FFGAs to the New Jersey Transit Corporation: One

for the second minimum operating segment of the Hudson-Bergen

light rail, the other for the first minimum operating segment of the

Newark-Elizabeth light rail. In 1997, FTA awarded three FFGAs to

grantees in California: One to the Los Angeles County Metropolitan

Transportation Authority for the North Hollywood branch of the

Metro Rail Red Line, one to the Bay Area Rapid Transit District

for its rapid rail extension to San Francisco International Airport,

and one to the Sacramento Regional Transit District for its light

rail extension in the South corridor.

Q.2. Mr. Secretary, I am also concerned that the Federal Railroad

Administration (FRA) is attempting to assert jurisdiction over rail

transit systems that share a corridor, but not tracks, with operating freight railroads. I do not believe that this has ever been

done before for any other mass transit project and would greatly

add costs to the operation of a transit project. Can you describe the

Department of Transportation policy as to this question of what

projects would and would not be subject to FRA jurisdiction?

A.2. Under the Federal railroad safety statutes, as amended in

1988, FRA’s safety jurisdiction extends to rapid transit operations

that are connected to the general railroad system. Those laws define ‘‘railroad’’ very broadly to include ‘‘any form of nonhighway

ground transportation that runs on rails or electromagnetic guideways.’’ 49 U.S.C. 20102. Specifically included within the definition are high-speed rail systems that connect metropolitan areas

and ‘‘commuter or other short-haul railroad passenger service in

a metropolitan or suburban area.’’ The only railroads excepted

from FRA’s jurisdiction are ‘‘rapid transit operations in an urban

area that are not connected to the general railroad system of transportation.’’ Congress was referring here to subways and street

railways.

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In recent years, many communities around the Nation have

begun to use, or consider using, conventional railroad tracks or corridors to provide commuter or rapid transit service using light rail

vehicles. FRA and the Federal Transit Administration (FTA) issued

a joint policy statement in July 2000, explaining how they would

apply their respective safety jurisdictions in these situations. 65

Fed. Reg. 42526. FTA has residual safety jurisdiction, which it

implements through its State safety oversight program, over rail

fixed guideway mass transportation operations that are ‘‘not subject to regulation by the Federal Railroad Administration.’’ 49

U.S.C. 5330.

On the day the joint FRA/FTA policy statement was issued, FRA

issued its own statement of agency policy on the shared use of the

general system by light rail and conventional rail operations. 65

Fed. Reg. 42529. In that statement, FRA stated its interpretation

and policy with regard to rapid transit connections to the general

system sufficient to warrant exercise of its jurisdiction. FRA made

clear that rapid transit operations that share track with conventional operations are fully subject to FRA’s safety regulations, but

explained that waivers of many rules would be likely if the transit

operations are conducted at separate times of day from the conventional operations. This ‘‘temporal separation’’ addresses the enormous risk inherent in shared use, for example, that a light rail

vehicle and conventional vehicle could collide. The transit vehicles

are simply not designed to withstand such a collision with the

much more heavily constructed conventional rail vehicles, and such

a collision would likely be catastrophic. FRA’s willingness to grant

necessary waivers of rules not designed for application to rapid

transit will help ensure that the rapid transit systems face no unnecessary costs.

With regard to rapid transit operations that do not share track

with conventional railroads but do have other connections to the

general system, FRA noted that three types of connections posed

sufficient safety hazards to warrant FRA’s exercise of jurisdiction

over the transit line to the extent it is connected: Railroad crossings at grade, joint control of trains in the same corridor (for example, a shared movable bridge), and highway-rail grade crossings in

a shared corridor. All of these types of connections pose significant

dangers and call for uniform regulation of the connected operations. For example, FRA noted that the safety of highway users

can best be protected if they receive the same signals warning of

the presence of a rail vehicle at a crossing regardless of the type

of rail vehicle. We believe the safety of employees and the public

depends on a consistent regulatory approach with regard to operations at these points of connection. Please note that FRA does not

regulate the entire rapid transit system that has such limited connections; FRA regulates the rapid transit system only as necessary

to ensure safety at the points of connection. This very limited regulation will have minimal costs, which could possibly be further reduced where a waiver is appropriate.

Under the railroad safety statute, of course, a commuter railroad

is fully subject to FRA’s jurisdiction regardless of its connections to

other railroads. However, Congress did not define ‘‘rapid transit operations in an urban area’’ or ‘‘commuter or other short-haul railVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00082 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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road passenger service in a metropolitan or suburban area,’’ the

terms used in the statute. Therefore, FRA has attempted to provide

guidance on how it will make the distinction between these types

of operations in its July 2000 policy statement. FRA looks at factors such as a system’s primary purpose, the area that it serves,

the equipment that it uses, and the frequency of its service. Railroads that have doubts about their proper categorization can seek

FRA’s opinion, as the Triangle Transit Authority (TTA) in North

Carolina’s Research Triangle area recently did concerning the regional railroad planned for that area. FRA provided TTA a legal

opinion in January 2003, concluding that the regional system will

be a commuter railroad or other short-haul railroad passenger service, but will not be rapid transit. TTA has challenged that decision

in the U.S. Court of Appeals for the Fourth Circuit, where the case

is being briefed.

Q.3. Mr. Secretary, several communities around the Nation will be

ready to sign FFGAs and proceed to construction this calendar

year. In the event that reauthorization of the surface transportation law is delayed, will it be possible for applicants in the pipeline who are recommended and/or highly recommended to receive

a contingent commitment from the Department of Transportation

to enable them to proceed under an extension of TEA–21?

A.3. The effects of a delay in the reauthorization of the Nation’s

Surface Transportation Act would depend upon the exact nature of

any Congressional action taken to extend TEA–21. In the absence

of specific legislative language, the effect of such an extension on

applicants in the New Starts pipeline would be pure speculation.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY

FROM WILLIAM MILLAR

Q.1. Your testimony indicates your support for continuing the funding guarantees which were included in TEA–21, covering both

Trust Fund and General Fund resources. Can you suggest any way

in which the program could be made more predictable while still

giving Congress a way to adjust program levels in the future

should circumstances require it?

A.1. APTA strongly urges Congress to maintain the funding guarantees provided under TEA–21 when it develops the new authorizing law for Federal transit and highway programs. Funding

guarantees included in TEA–21 made Federal funding for transit

in the annual appropriations far more predictable over the last 6

years than had ever been the case in the past. Predictable funding

for transit over the life of the 6-year authorizing law helped to facilitate the long-term capital planning and budgeting that is needed for transit agencies to make the most efficient use of limited

resources. Since the Federal transit program became primarily a

capital program under TEA–21, and because transit capital programs are multiyear in nature and depend on State and local

funding matches, agencies can do a better job maintaining and replacing their capital plant, at less cost, if they know how much

Federal support to expect from year to year. Guaranteed funding

also ensures that the Federal Government invests in both our transit and highway infrastructure. In the years prior to the guaranVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00083 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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tees in TEA–21, Congress actually funded highway programs far

closer to the funding levels set in authorization bills than it did

with transit programs.

According to a December 2002 study by Jeffrey A. Parker entitled The Benefits of TEA–21 Funding Guarantees, the guarantees

have ‘‘stretched scarce Federal dollars for public transit further and

produced additional spin-off benefits by accelerating construction

and leveraging new sources of State and local matching funds.’’ Regarding funding predictability for new rail starts, the report goes

on to note that the ‘‘flexibility to borrow against Full Funding

Grant Agreements has allowed the total number of projects participating in the Section 5309 New Starts Program to increase in recent years.’’

In short, APTA urges Congress to maintain the funding guarantees for both the Trust Fund and General Fund portion of the Federal transit program when it develops new authorizing law. We

note, however, that TEA–21 provided Congress with funding flexibility by authorizing additional General Fund resources in excess

of Trust Fund and General Fund guaranteed funding, and that

Congress used this resource to adjust the program above the guaranteed program level in fiscal year 1999.

Q.2. Your testimony opposes elimination of the bus discretionary

program. The Administration claims that providing these funds

would make the prograin more predictable, enhancing local planning. You have said that predictability is important in supporting

continuing the funding guarantees, so why isn’t it just as important

in bus funding? What examples can you provide about the kinds of

discretionary funding makes more sense.

A.2. While APTA supports predictable Federal funding that helps

transit agencies plan multiyear budgets, it did recommend that

the Discretionary Bus and Bus Facilities Program be preserved as

a separate discretionary program and not folded into the formula program and the New Starts Program as proposed by the

Administration.

We made these recommendations for a number of reasons. First,

the existing program structure has worked very well, even though

funding for each of the individual transit programs falls short of

addressing identified needs. Although current funding does not

adequately address the demand for replacement of vehicles and bus

facilities, APTA believes that increased funding for the existing

Discretionary Bus and Bus Facilities Program, and the creation of

a new program to replace overage vehicles, is a better way to address these needs.

Moving half of the existing bus program funding into the formula

program as proposed by the Administration would simply spread

too little resources across too many agencies to effectively address

the existing need for vehicles and facilities. Vehicle and facility replacement or purchases at transit agencies tends to come in cycles,

and not on a regular, year-to-year basis. APTA believes that these

needs are best met with discretionary funding available at the time

when equipment should be replaced or purchased. Whether an

agency is building a bus garage, replacing a portion of its bus fleet,

or building a new rail system, these purchases are essentially longVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00084 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
81

term, one-time major capital investments which have been funded

for more than 20 years under discretionary programs.

Q.3. Your organization supports continuing the present requirement that New Starts projects must have a ‘‘fixed guideway’’

component while the Administration proposes relaxing this requirement to increase the flexibility of the program to address certain

Bus Rapid Transit projects. Don’t the present limit[ations] on

eligiblity have the potential to bias local decisions toward projects

which are eligible for funding, even when a nonfixed guideway

project might be the better choice in a community? How can

projects like this proceed if they need funding from [for] more than

1 year, and the only way to get a multiyear commitment is from

the New Starts Program? Is it really practical to assume that these

projects could be funded from the Bus program, which typically

supports a very large number of projects with an average of only

about $1 million per year per project?

A.3. APTA would like to emphasize that Bus Rapid Transit (BRT)

systems which have exclusive rights of way or other fixed guideway

designs are currently eligible for funding under the New Starts

Program. Indeed, APTA’s TEA–21 reauthorization recommendations call for statutory language making clear that such projects

are eligible for New Start funding.

APTA believes that agencies that want to develop bus service

without any fixed guideway characteristics should continue to be

able to do so using a combination of formula funds and discretionary bus funds. We note that current demand for Federal funds

to build fixed guideway New Starts and extensions, including BRT

projects, far exceeds available resources, and we are concerned that

funding nonfixed guideway BRT systems from New Starts resources would only exacerbate the existing shortfall. We would add

that many communities seeking funds for fixed guideway systems

are already exceeding the required State and local match, and observe that if communities wanting nonfixed guideway BRT systems

provided similar local matching funds it would be possible to fund

even more such systems.

While the average grant award under the Discretionary Bus Program may be only about $1 million per year, we note that there

were a substantial number of projects funded in fiscal year 2003

in excess of that amount. In fact, one of the fiscal year 2003 bus

grants provided almost $8 million for BRT-related costs in Hawaii,

which was in addition to almost $7 million for other bus projects

in Hawaii. While there is currently no commitment process for

multiyear bus projects, multiyear funding in the appropriations

process can presumably be provided if a project is widely supported

by a State’s congressional delegation.

Q.4. The Administration proposes to combine Fixed Guideway Modernization Funding with urbanized area formula funds into a single

allocation to each urbanized area which can then be used flexibly

for any transit purpose. The funding formulas would stay the same.

Your testimony opposes this idea. Why does APTA believe it is

such a bad idea to provide local areas [with the ability] to decide

how to allocate these funds? If the funding levels are the same,

why would you recommend not providing this flexibility?

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A.4. APTA generally supports flexibility in the use of Federal transit funds, but we believe it would be a mistake to fold the Fixed

Guideway Modernization Program into the urban formula program

and permit the use of such funds for any transit purpose. As stated

in our written testimony, the program ‘‘was designed to ensure the

proper modernization of the Nation’s older rail systems, and it

helps ensure that as Federal New Start investment projects age

they can be modernized.’’ Our testimony also expresses APTA’s concern that diverting these funds from Fixed Guideway Modernization, where needs far exceed available resources, would only exacerbate unmet modernization needs and potentially result in the deterioration of some of the Nation’s most valuable capital assets.

The bottom line for APTA is that modernization needs cannot,

and should not, be deferred. We believe that the current system,

which provides Fixed Guideway Modernization Funds directly to

operators of fixed guideway systems, for only fixed guideway modernization purposes, makes sense. Since other urban formula funds

go to a designated recipient in a community that may have multiple transit operations in need of capital funds for a variety of purposes, it would be quite likely that Fixed Guideway Modernization

Funds might be directed to other purposes. While APTA supports

giving localities flexibility in how they use transportation funds,

it was the consensus of all of our member organizations to seek the

preservation of the existing Fixed Guideway Modernization Program based on the large and growing need for modernization of

these facilities.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED

FROM WILLIAM MILLAR

APTA’s Reauthorization Proposal

Q.1. Mr. Millar, could you explain in greater detail APTA’s proposals to address the needs of smaller urban communities?

A.1. APTA’s reauthorization proposal includes a number of recommendations that address the needs of smaller urban areas.

Among the recommendations that directly or indirectly benefit

smaller urban areas are the following:

Increased Formula Funding for Small Urban Areas

APTA’s proposal calls for an 87 percent increase in formula funding for small urbanized areas. It would increase funding for the

program from $334 million in fiscal year 2003 to $626 million in

fiscal year 2009.

High Intensity Small Urbanized Area Formula Program

APTA’s proposal recommends the creation of a new ‘‘High Intensity Small Urbanized Area Formula Program’’ that would provide

formula funding—in addition to funding under the current small

urban formula program—that would be distributed among those

small urban areas that provide service above the average level of

service in larger urban areas. The proposed program would be

funded at $35 million in fiscal year 2004 and grow to almost $54

million in 2009.

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This is intended to provide formula funding under the small

urban program which reflects higher levels of service provided by

transit agencies in separate communities with similar population

and density. Under the current small urban formula program,

funding is provided strictly on the basis of population and population density. Unlike the large urban formula program, which includes a service level factor, agencies in small urban areas that

provide higher levels of service get the same amount as agencies

which provide less service in small urban areas with similar population and density factors. Under this APTA proposal, agencies in

similar size communities that run more buses, carry more passengers, or provide more frequent service would receive more Federal formula funding than those in comparable size communities

that provide less service. The proposal is modeled on the recommendations from a Federal Transit Administration (FTA) study

of transit formula funding mandated under Section 3033 of the

Transportation Equity Act for the 21st Century (TEA–21).

Aging Bus Replacement Program

APTA’s proposal recommends the creation of a new Aging Bus

Replacement program for urban areas of less than one million people and in rural areas. Under the program grants would be provided to replace vehicles—buses and vans—that exceed 150 percent

of the FTA recommended age for replacement. The proposed program would be funded at $100 million in fiscal year 2004 and grow

to almost $156 million in fiscal year 2009.

This program would benefit rural areas and medium-size urban

areas, as well as small urban areas. It is intended to focus on the

need to replace overage vehicles—one of the most basic capital

needs for public transportation service—in communities that have

been unable to obtain sufficient funding for vehicle replacement

under the Discretionary Bus and Bus Facilities Program or existing

formula programs. It is meant to help modernize the fleet of public

transportation vehicles in every community, reduce maintenance

costs associated with operating overage vehicles, and attract riders

with the newer vehicles.

Transitional Authorily for UZA’s Going over 200,000 Population

APTA’s proposal would permit urbanized areas that grow from

less than 200,000 people to more than 200,000 or which were

added to urbanized areas of more than 200,000 people as a result

of the 2000 Census, to annually use an amount of Federal transit

formula funds equal to the amount they were allowed to use for operating purposes in fiscal year 2002 for operating purposes through

fiscal year 2009.

Current law permits transit providers in urbanized areas of less

than 200,000 people to use Federal formula funds for either capital

or operating purposes. Many transit agencies in this category use

a significant portion of Federal funds for operating purposes. This

change would provide transit agencies that transition from ‘‘less

than’’ 200,000 population to ‘‘more than’’ 200,000 with the flexibility to use Federal formula funds for operating or capital purposes as needed.

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Other Benefits

In addition to the proposals cited above, APTA’s recommendations would provide increased flexibility under drug and alcohol

testing programs and charter bus regulations, both of which directly benefit transit operators in small urban areas. APTA’s proposal also calls for improved coordination or combining of Federal

reviews and audits to avoid duplication, and the establishment of

Federal requirements that agencies administering TANF and the

Job Access and Reverse Commute (JARC) programs coordinate

with local transit agencies in the provision of transportation services. Finally, APTA’s proposal would allow transit grant recipients

to procure vehicles and other products from the GSA Schedule,

which would help small transit agencies which have limited ability

to negotiate, to save money in the purchase of vehicles and other

capital items.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SARBANES

FROM WILLIAM MILLAR

Q.1. Administrator Dorn testified last year before this Committee

that, ‘‘The guaranteed funding commitment, in terms of the Administration’s point of view, has been one of the key successes of

ISTEA and TEA–21. Most importantly, in our view, it has leveraged State and local investments in transit and in transportation

generally.’’ Do you agree with that statement? What do you believe

would be the practical effect on your members if TEA–21’s guarantees around the entire transit program were not continued in the

next bill?

A.1. I agree very strongly with Administrator Dorn’s statement

that guaranteed funding for public transportation has been one of

the key successes of TEA–21. In fact, maintaining the funding

guarantees in the reauthorization of TEA–21 is one of APTA’s

three key recommendations for the reauthorization of TEA–21. As

Administrator Dorn correctly points out, the funding guarantees

created in TEA–21 enable transit systems to leverage Federal investments and lower project costs, develop public/private partnerships, implement long-range plans, and operate in a business-like

fashion. It is critical that the funding guarantees be retained in the

reauthorization effort.

I should note, however, that ISTEA did not include funding guarantees for public transportation. Between fiscal year 1992 and fiscal year 1997 under ISTEA appropriated funding for the Federal

transit program equalled only 77 percent of authorized funding and

varied year to year. This level of transit funding under ISTEA and

lack of predictable funding under ISTEA only confirms the importance of the TEA–21 guarantees. Furthermore, appropriated funding under ISTEA probably would have been less than 77 percent

of authorized levels if not for the fact that the 1992 authorization

was concluded after the fiscal year 1992 appropriations bill was

completed. The fiscal year 1992 authorization level was therefore

written to conform with the previously enacted appropriations

level.

We believe that the guaranteed funding provided by TEA–21 has

stretched scarce Federal dollars for public transportation further

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and produced additional benefits by accelerating construction and

leveraging new sources of State and local matching funds. For example, Congress is now able to spread its commitments to New

Start fixed guideway projects over a longer time frame than the

construction period. The flexibility to borrow against Full Funding

Grant Agreements has allowed the total number of projects participating in Section 5309 New Starts Program to increase in recent

years. In that regard, we are pleased to have shared with the Committee and its staff a recent report that demonstrates just how important the guarantees are, ‘‘The Benefits of TEA–21 Funding

Guarantees’’ by Jeffrey A. Parker.

Higher levels of guaranteed Federal support under TEA–21 are

attracting even higher levels of stable, reliable nonfederal matching

funds. During the 1990’s Federal outlays for transit capital investment grew at an average of 5.0 percent per year, while local expenditures climbed at an average annual rate of 11.7 percent.

We believe that the practical effect on our transit members if

guaranteed funding were not continued in the next bill is that the

long-term viability of the transit program would be threatened. Our

members and private financial institutions have come to rely on

the stable and predictable funding provided under the guarantees.

In the absence of the guarantees, the private financial markets

would be unlikely to make longer-term commitments when faced

with the uncertainty of the annual appropriation process. The ability to leverage funds and to make long-term commitments would be

seriously impaired. It is for this reason that I strongly urge the

Committee to keep guaranteed funding as part of the reauthorization of TEA–21 legislation.

Q.2. The Administration has proposed to merge the Fixed Guideway Modernization Program into the Urbanized Area Formula Program, and to allow those funds to be used for any purpose eligible

under the formula program, not just for fixed guideway modernization. Given your experience in the transit industry, I would like to

understand, first, why the Fixed Guideway Program was created,

and second, whether you believe that its original purpose has been

fulfilled. In your view, would the Administration’s proposal further

the purpose for which this program was created?

A.2. The Fixed Guideway Modernization Program was originally

created to help modernize aging fixed guideway systems that were

built without Federal assistance prior to the establishment of a

Federal transit program. Over the years, it has developed into a

program to assist with modernization needs of fixed guideway systems, built with or without Federal assistance, that require upgrading and rehabilitation of aging infrastructure, as well as other

technology improvements that permit the movement of an increasing number of passengers through existing systems. In addition to

installing equipment that did not exist when these systems were

built or previously modernized, the program helps address mandates and needs not envisioned when these systems were built, including state of the art security equipment and accommodations for

people with disabilities.

In short, modernization, whether it is based on new addressing

new technology, safety, security, efficiency, and increased pasVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00089 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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senger capacity, or basic infrastructure upgrading, is a necessary

and ongoing part of running these systems.

APTA questions the Administration proposal to distribute Fixed

Guideway Modernization Funds under the urban formula program

and to permit the use of Fixed Guideway Modernization Funds for

nonfixed guideway modernization purposes. As noted, the Fixed

Guideway Modernization Program was designed to ensure the

proper maintenance of the Nation’s older rail transit and fixed

guideway systems, and it helps ensure that as Federal New Start

investment projects age they can be modernized. Rail systems in

large metropolitan areas carry millions of passengers each year and

their ridership has grown substantially in recent years. Many of

these systems are approaching capacity constraints. These funds

also help systems address this growth in ridership and ensure that

passengers can use these systems safely and efficiently. The Administration proposal would allow these funds to go to an urbanized area and be used for any transit purposes, not just modernization. We are concerned that diverting these funds from Fixed

Guideway Modernization, where needs far exceed available resources, would only exacerbate unmet modernization needs and potentially result in the deterioration of some of the Nation’s most

valuable capital assets. Again, the Fixed Guideway Modernization

Program has been a critical component of the Federal transit program structure since 1982, and it is a great success.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY

FROM JEFF MORALES

Q.1. I understand that AASHTO continues to support the funding

guarantees in TEA–21. How would you reconcile the goals of providing predictability for transit agencies while not tying the hands

of future Congresses to deal with current fiscal situations? Can you

suggest any way in which the program could be made more predictable while still giving Congress a way to adjust program levels in

the future should circumstances require it?

A.1. I believe that the tools for that adjustment already exist in the

current appropriations process and through obligation authority

limitations. California is supportive of extending RABA provisions

to the Mass Transit Account provided that Congress can create a

mechanism that can dampen the impact of financial downturns.

Q.2. What are AASHTO’s views with respect to use of various Federal bonding proposals to finance the transit program? Do you support continued allocation of 2.86 cents to the Mass Transit Account

as a base from which any program increases should be taken?

A.2. AASHTO supports maintainig the existing balanced approach

to addressing highway and transit needs. It has adopted principles

for reauthorization that recognize that the current funding structure under TEA–21, in which Highway Trust Fund revenues are

split with 80 percent credited to the Highway Account and 20 percent credited to the Mass Transit Account is working well and

should be retained. The Federal transit program needs a stable

source of guaranteed funds from the Mass Transit Account of the

Highway Trust Fund and the General Fund in order for decision

makers to commit to expensive transit solutions. The current arVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00090 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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rangement under TEA–21 provides a stable, more predictable environment for planning, programming, and constructing these key

transit projects.

Q.3. As we have heard, 40 percent of rural counties have no public

transportation at all and many with transit have very, very limited

service. Do you support the Administration’s proposal to increase

rural funding? What has been the States experience managing this

program?

A.3. Certainly more funds are needed for rural transportation systems. Rural operators tend to keep vehicles in service significantly

beyond Federal useful life standards because of fund needs. As you

point out, there is a large proportion of rural America that does not

have the benefit of transit service. However, over 80 percent of our

population lives in urban areas and many urban transit systems

face similar challenges. It is clear that the only way that we can

address this diversity of needs is to make sure that there are sufficient resources available. The goal is not to increase the size of one

program at the expense of others, which is a zero sum game, but

to increase the amount of resources to accommodate all needs.

A good example of California’s experience with rural transit programs is Governor Gray Davis’ program to provide shuttle services

for farm laborers to work sites. Rural areas offer few job opportunities and in some counties, available jobs are concentrated in the

seasonal agricultural sector where the demand for labor fluctuates

monthly. In the Southern San Joaquin Valley, workers were being

killed riding to work in unsafe vehicles. Governor Davis’ rural transit program uses Federal funds to augment existing transit services

and to add safe transit shuttles to move laborers to their work.

This helps case labor costs for farmers and provides laborers with

a safe, low-cost transportation option. It is one example of where

a well designed rural transportation system can link labor to jobs.

Q.4. The Administration proposes requiring States to consult with

intercity bus operators if they wish to certify that all intercity bus

needs have been met, and that there is no need to spend the full

15 percent intercity bus set aside for that purpose. What has been

your experience with the intercity bus program? Don’t you agree

that intercity bus operators should be consulted before a State certifies that it does not need to spend all of the funds?

A.4. California uses the full 15 percent set aside for its Intercity

Bus Program. This program funds public transit projects that serve

the intercity travel needs of Californians in nonurbanized areas.

We invite public and private operators to propose projects and

award funds on a competitive basis. Our criteria for selection includes consideration of the proposal’s ability to meet State and

Federal program objectives, local support and operator commitment, and sustainability of the project. In California’s case, needs

outpace funding and the proposal process functions as a consultation mechanism.

Q.5. The Administration is proposing to use the current State warranty approach to labor protection for all of the State managed programs. What has been your experience with the State warranty in

the 5311 Nonurbanized Program? Currently, the 5310 Program is

88

exempt from the labor protection provisions because subrecipients

are private nonprofit organizations which do not normally provide

transit service. The Administration is instead proposing a case-bycase waiver for nonprofit organizations. Would this approach be

workable?

A.5. State warrantees for the 5311 program work well in California. However, we believe that the 5310 program could be greatly

impacted by the implementation of a case-by-case waiver for nonprofit organizations. The 5310 program does contract with many

private nonprofit agencies, whose operations are very reliant on a

large volunteer workforce. Case-by-case waivers would pose additional administrative burdens that could become onerous for recipients and States and could dilute the effectiveness of the program.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED

FROM JEFF MORALES

Funding Guarantees

Q.1. Would California end certain transit projects, if Congress

adopts the Administration proposal to guarantee only a portion of

the Transit Bust Fund?

A.1. That decision would lie with their sponsors and the Metropolitan Planning Organizations that are responsible for cobbling funding together. There is no question that losing a funding guarantee

would create uncertainty over the long-term financing of a project,

and very likely lead to the termination of some. That presents a

very untenable position for us for several reasons. First, because

we are increasingly dependent on transit as part of our overall

transportation system, and the inability to move forward would

have mobility consequences throughout the State. Second, in most

cases, transit projects are a strong component of achieving air quality conformity. If those projects were unable to proceed, conformity

could be jeopardized, and other Federal transportation funding

would be at risk.

Finance Committee Bonding Contract

Q.2. Some in the Senate have proposed using the transit share of

the gas tax to increase highway spending and start a bonding program to meet the Nation’s transit needs. If the shoe was on the

other foot, do you think you would support a proposal to subject

all highway spending to an untested bonding scheme without

guarantees?

A.2. We do not support that shoe on either foot. One of the great

advances in the last two reauthorizations was the push, not yet

complete, to break down the barriers between modes of the transportation. The reality is that California, like other States, needs

both transit and highways, and needs to be able to evaluate them

without bias. We would oppose any measure that moves backward

in that area, whether it is the bonding proposal you mention, or the

Administration proposal to subject New Starts to a different costsharing formula than every other transportation program.

89

RESPONSE TO A WRITTEN QUESTION OF SENATOR SARBANES

FROM JEFF MORALES

Q.1. Administrator Dorn testified last year before this Committee

that, ‘‘The guaranteed funding commitment, in terms of the Administration’s point of view, has been one of the key successes of

ISTEA and TEA–21. Most importantly, in our view, it has leveraged State and local investments in transit and in transportation

generally.’’ Do you agree with that statement? What do you believe

would be the practical effect on your members if TEA–21’s guarantees around the entire transit program were not continued in the

next bill?

A.1. Yes, I agree with Administrator Dorn’s statement. The original

intent of the very first surface transportation program Acts was to

encourage States and local communities to step forward to leverage

their dollars with Federal funds. It is an intent that has continued

through to TEA–21, and it has been successful. In California, Governor Gray Davis made an unprecedented $6 billion commitment of

State funds to transit and highway transportation projects in the

first years of his administration. Almost all of those projects utilize

the State funds as match to Federal and local dollars in a partnership framework. According to FHWA, nationally, the distribution

of highway user revenues is almost two-to-one local and State governments to Federal. Clearly, the intent of the program is being

realized.

The latest landmark in the highway and transit programs is the

guaranteed funding provisions of TEA–21. This funding stability

provision made possible long-term financial planning for both highways and transit and made increased leveraging of future program

dollars much more feasible. Should these provisions be repealed, it

would require more funding to be devoted to debt service because

of greater perceived risk on the part of the financial community.

This could lead to termination or delay for some projects, and

increase costs for others. The unintended consequence of such a

delay in project delivery would be failure to meet air quality attainment and conformity targets (which may jeopardize regional transportation improvement programs) and increased congestion, which

are counterproductive to the goals of the national transportation

program.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY

FROM ROBERT MOLOFSKY

Q.1. As with other members of the panel, your testimony opposes

elimination of the Bus Discretionary Program. The Administration

claims that providing these funds would make the program more

predictable and would enhance local planning. You have said predictability is important in supporting the continuation of the funding guarantees, so why isn’t it just as important in bus funding?

What examples can you provide about the kinds of projects where

discretionary funding makes more sense?

A.1. Mr. Chairman, thank you for your question. We indeed support the guaranteed funding provisions under TEA–21 because of

the predictability and stability they have brought to the industry.

But when we allude to the importance of predictability, we are referring to the firewalls that guarantee funding for the entire proVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00093 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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gram. Within the program itself, however, the current breakdown

between formula and capital programs has worked well, and there

is no reason to change it.

ATU supports retention of the Discretionary Bus Capital Program for a number of reasons. Most importantly, transit systems

have periodic bus replacement and facility needs that simply cannot be met from the formula program alone. The role of the Discretionary Bus Program is to address those needs. We believe that

eliminating this crucial program would only mean that too little

funding would be spread too thinly to provide safe and efficient bus

service throughout the United States, especially with the drastic

cuts in overall guaranteed funding levels proposed in SAFETEA.

Therefore, in answer to your question regarding the kinds of

projects that would be best served by discretionary funding, we

suggest that the TEA–21 structure has worked well. Under TEA–

21 Capital Investment Programs, funds are restricted in their distribution to transit agencies or government entities that meet

specific criteria. Funds are distributed by allocation for New Start

projects and Bus Capital projects, and by formula to qualifying

areas for Fixed Guideway Modernization projects. Other programs,

such as Planning, Research, and Job Access and Reverse Commute

(JARC) are independent, and they do not come under either the

Formula or Capital Investment category. Under this model, funded

at increasing, guaranteed levels, the Federal transit program has

increased transit ridership in the United States to the highest levels in more than 40 years.

And finally, the earmarking of the Bus Program has been the

main reason for the expansion of the Federal transit program from

what was once an urban-only program. Through the earmarking

process, lawmakers from both sides of the aisle in the House and

Senate—from rural and small urban areas—have sought to introduce public transportation into their communities to complement

the highway system. This process has served to generate a great

deal of interest in the transit program, and as a result, the largest

growing transit areas in the United States today are located in the

southern and western parts of the Nation. Had the discretionary

Bus Program not been in existence, many of those communities

would have never been able to experience the benefits of public

transportation because the formula program alone would not have

been adequate to steer badly needed funds toward our Nation’s

rural and small urban areas. The bulk of the money would have

instead gone toward funding general transit needs in the Nation’s

‘‘traditional’’ transit areas.

In summary, TEA– 21’s funding structure has worked quite well,

and we see no reason to change the current system.

Q.2. The Administration proposes a modest new incentive tier in

the urbanized and nonurbanized programs. You do not support this

proposal. You indicate that part of your reason for opposing this

change is that it comes with limited overall growth in the program,

and thus would reduce basic predictable funding in the later years

as the incentive takedown increases. Would you have supported the

concept if the overall program grew enough that basic funding was

growing?

91

A.2. ATU supports, and has always supported, efforts to increase

public transportation ridership. Our locals have engaged in numerous initiatives nationwide throughout recent years that have focused on this crucial issue. However, it has been our experience

that such efforts are best performed at the local level, where consideration of individual routes and travel patterns may be examined in greater detail.

Therefore, we endorse the principles of the Administration’s ridership incentive concept. The Federal Transit Administration (FTA)

should be commended for attempting to address this important

issue. However, we believe that there is little the Federal Government can actually accomplish toward this worthy goal in the manner proposed. Specifically, there is no direct connection between

potential Federal incentive grants and public transportation patronage. Transit ridership is determined by a number of factors, including quality of service, convenience, availability, and especially,

the economy. As we have seen in recent months, when unemployment is high, fewer people take the bus or the train to work. Furthermore, although the FTA has stated that urbanized areas that

experience a ‘‘significant’’ decline in public transportation patronage would not be eligible for so-called performance awards, it is difficult to imagine how any transit system could achieve ridership

increases in a poor economy without cutting or significantly reducing service to our most vulnerable citizens.

TEA–21 has proven that the best way for the Federal Government to accomplish its goals in the ridership area is to continue to

provide record levels of funding to meet transit infrastructure

needs. Indeed, as indicated by the chart below, the annual Federal

investment in the transit program, beginning with ISTEA and continued by the budgetary firewalls under TEA–21, has had a direct

affect on public transportation ridership.

Transit Funding

(fiscal year) (Billions)

Transit Ridership

(Calendar Year) (Billions)

1996 .......................................... $4.1 7.9

1997 .......................................... $4.4 8.4

1998 .......................................... $4.8 8.8

1999 .......................................... $5.4 9.2

2000 .......................................... $5.8 9.4

2001 .......................................... $6.3 9.5

Therefore, even if the whole program grows enough so that takedowns are rendered insignificant, we still believe the best way for

the Federal Government to increase ridership is to provide increased funding under the existing capital and formula programs.

Finally, as mentioned above, the most expedient way to increase

transit ridership is to get people working again so that they have

a job to travel to. We hope the Committee recognizes that the reauthorization of the highway/transit bill is an opportunity to create

thousands of good paying jobs. Every penny that is deposited into

the Highway Trust Fund generates approximately $1.5 billion, and

creates nearly 50,000 jobs.

Q.3. The Administration is proposing to adopt in law the current

State warranty approach to labor protection for all of the State

managed programs. What has been your experience with the State

92

warranty in the 5311 nonurbanized program? Currently, the 5310

program is exempt from the labor protection provisions because

subrecipients are private nonprofit organizations which do not normally provide transit service. The Administration is instead proposing a case-by-case waiver for private nonprofit organizations.

This would appear to be an expansion of labor protection to a whole

class of recipients and to a whole program which is now exempt in

practice. Why is this appropriate? Further, the Administration

would apply this to the New Freedom and National Parks Legacy

Programs. Why is this appropriate when these are completely new

programs, and new services?

A.3. First, with regard to the Section 5311 Program, nonurban

projects must currently satisfy the employee protection requirements of 49 U.S.C. 5333 (b), formerly Section 13(c). However, under

this section, grants are labor certified without a referral using the

Department of Labor’s (DOL) specially designed Warranty arrangement. Although the Secretary may also waive application of 13(c),

this has never been done, and the Warranty has been routinely applied. The Administration proposes to allow 5311 grants to be subject to the requirements of 5307, but only ‘‘to the extent the Secretary considers appropriate.’’ Section 13(c) would apply, provided

that the DOL utilizes the expedited warranty procedure, which as

you have noted, is current practice. However, DOT could waive the

applicability of the special warranty for private nonprofit subrecipients on a case-by-case basis.

There is no justification for changing the grant requirement language of 5311. In answer to your question, under this program, the

warranty has worked well, and there is no basis for the waiver. In

fact, to reflect current practice, the current language allowing for

the waiver should be deleted.

The waiver first arose under the Elderly and Disabled (5310)

Program and was based on an early 1970’s Department of Transportation (DOT) decision that the waiver should apply to private

nonprofits. The primary reason for the decision was that the program was very small in size, and the role of such private nonprofits

was quite limited. Clearly, this justification no longer applies.

Your second question asks about the Elderly and Disabled Program, but your statement actually misstates the present-day application of 13(c) to the 5310 program. Currently, under Section 5310,

grants to State and local governmental authorities are covered by

13(c), but grants to private nonprofit corporations (passing through

the State) are covered by 13(c) only to the extent the Secretary considers appropriate. As mentioned above, since 1974, DOT has

deemed that 13(c) shall not apply to private nonprofit grant recipients under 5310. Such decision was based on the limited size of the

program at the time (approximately $15 million) and the limited

role of private nonprofits.

The Administration proposes to apply Section 5310 grant requirements to all requirements of a grant under Section 5307, but

only ‘‘to the extent the Secretary considers appropriate.’’ This

amounts to a possible waiver of 13(c) for the whole 5310 program—

grants to State and local governments and grants to nonprofits.

Therefore, while your question suggests that there would be an expansion of labor protection, the bill would actually remove 13(c)

93

coverage because it would repeal current 5310 subsection (a)(1),

which subjects grants to State and local governments to all requirements of a grant or loan under Section 5309. The Section 5310 program is now funded at nearly $100 million

annually. Denying labor protection on the basis of the size of the

program, therefore, is no longer appropriate. As with all 5311

grants, Section 13(c) should now apply to the entire 5310 program,

whether such grants are allocated to States, local governmental authorities, or private nonprofits.

Next, with regard to 13(c) coverage for the proposed New Freedom

and National Parks Legacy Programs, as we stated in our testimony, every surface transportation reauthorization bill enacted

since 1964 has been linked to a strong labor policy that provides

employee protections for public transit workers. Today, as in the

past, ATU’s support for reauthorization will be contingent on the

continuation of those policies and their application to any new

programs or innovative finance mechanisms created through the

new bill.

There is a strong precedent for attaching labor protections to new

Federal transit programs. For example, the highly successful JARC

Program, established in 1998, was enacted on the condition that

grants would be subject to all of the terms and conditions of a

grant made under Section 5307. The value of this historic link between a strong transportation bill and sensible labor policy has

been clearly recognized by the Administration, which has recommended the application of 13(c) to the new programs.

A grant under the New Freedom Program would be subject to the

requirements of 5307, but only ‘‘to the extent the Secretary considers appropriate.’’ Section 13(c) would apply, provided that the

Secretary of Labor utilizes the special warranty. However, DOT

would be authorized to waive the applicability of the warranty for

private nonprofit subrecipients on a case-by-case basis as the Secretary deems appropriate.

As we mention in our testimony, the warranty could work here

if the New Freedom Program was folded into the JARC program.

(As discussed below, JARC grants to applicants serving populations

under 200,000 are labor certified without a referral using the DOL

specially designed warranty arrangement). However, again, the

waiver option should be removed. The Administration would authorize $145 million for this program in the first year alone, and

$162 million annually by the end of the reauthorization. A waiver

for a program of this size is certainly not appropriate.

Finally, ATU supports the Administration’s proposed National

Parks Legacy Project. Labor protections are appropriate here for a

number of reasons. First, the program would establish new service

in only some instances; there are a number of parks that are already running bus service. Second, as with all other elements, if

there is no impact on existing employees, the protections remain

dormant. Third, this program would be open not only to federally

owned or managed parks, but also refuges, and recreational areas,

which are located in urban, suburban, and rural areas. Therefore,

the waiver option should not be available under this program.

Q.4. Currently, many recipients in the Job Access and Reverse

Commute program are either small rural transit operators or priVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00097 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
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vate nonprofit organizations. Yet each JARC grant is treated as if

it were being made to an urbanized area transit agency. Thus a

private nonprofit agency providing rural service is subject to three

different processes for labor protection if they get rural, elderly,

and disabled persons and JARC funds. Why shouldn’t a rural transit operator be able to get a JARC grant and be covered by the current State warranty? And why shouldn’t a private nonprofit organization that gets grants under the elderly and disabled persons program and thus is exempted not also be exempted under the JARC

program?

A.4. Your first question asks: Why shouldn’t a rural transit operator be able to get a JARC grant and be covered by the current

State warranty? Actually, since the new guidelines were established in 1999, that is exactly how DOL has processed JARC

grants. Under the regulations, grants to rural and small urban

operators serving populations under 200,000 are labor certified

without a referral using the DOL specially designed warranty arrangement. The regular 13(c) process applies to JARC grants in

areas with a population above 200,000.

But despite the success of the new 13(c) regulations for the JARC

Program, SAFETEA would substantially alter the application of

13(c) under this program by using the warranty and waiver option

for all JARC grants (regardless of the size of the population

served). The Administration proposes to allow the Secretary to

waive the applicability of the special warranty for private nonprofit subrecipients on a case-by-case basis as the Secretary deems

appropriate.

There is no support or justification for changing the grant procedures under this program. Since the 1999 regulations were released, and the separate procedures were set for applicants based

on population, there have been no problems regarding this program. The new time limits are working perfectly, and no JARC

grants have gone unfunded because of 13(c). The current coverage

should be maintained without a new waiver option.

Finally, you ask why shouldn’t a private nonprofit organization

that gets grants under the elderly and disabled persons program

and thus is exempted not also be exempted under the JARC program? As we stated in answer to question #3, because 5310 has

grown substantially since 1974 (when the 13(c) waiver was first instituted for nonprofits), labor protections should now apply to the

entire 5310 program, whether such grants are allocated to States,

local governmental authorities, or private nonprofits. Therefore, we

would of course object to the possibility of JARC grants being

exempted in the same manner. And, we again note that JARC

grants to applicants serving populations under 200,000—where the

majority of nonprofit organizations operate—are labor certified

without a referral through the warranty arrangement. History

shows that this process has worked well, and there is no reason to

change the system.

95

RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED

FROM ROBERT MOLOFSKY

Funding

Q.1. Mr. Molofsky, I appreciate your willingness to not only seek

more money for transit but also propose a source for such funding,

namely the gas tax. Do other nontransportation unions support

this position?

A.1. Organized labor stands united in the effort to raise the Federal gas tax. ATU and the Transport Workers Union (TWU) are

working closely with the American Federation of State, County,

and Municipal Employees (AFSCME), the International Association

of Bridge, Structural, Ornamental, and Reinforcing Ironworkers,

the International Union of Operating Engineers, the Laborers’

International Union of North America, and the United Brotherhood

of Carpenters and Joiners of America to deliver the message that

investing in America’s transportation infrastructure through a

nominal gas tax increase is the best way to stimulate the economy.

Also, in an effort to secure additional resources, the AFL-CIO’s

Transportation Trades Department (TTD), made up of 34 unions,

has endorsed using the interest earned in the Highway Trust Fund

for trust fund purposes and transferring the 2.5 cents of the tax on

ethanol that currently flows into the General Fund to the Highway

Trust Fund.

ATU supports raising and indexing the Federal gas tax as recommended by leadership of the House Transportation and Infrastructure Committee. This proposal would provide the revenue

stream necessary to double the annual Federal investment in highways—to $60 billion—and public transportation—to $14 billion—as

called for in ATU’s comprehensive plan, ‘‘Next Stop, Real Choices,’’

released last summer. ATU also supports bipartisan proposals to

draw down reserves in the highway trust fund, and collect the interest on fund reserves.

Each penny of the motor fuels excise taxes currently yields over $1.7 billion per year, generating more than 80,000 jobs in the

transportation industry, with about $1.4 billion being deposited

into the Highway Account of the Highway Trust Fund and $350

million deposited into the Mass Transit Account. A two-cent gas

tax increase, for example, would cost the average driver a mere $12

per year, or six cents per day. The Federal motor fuels tax is currently 18.4 cents, and has not been raised since 1993.

With unemployment at an 8-year high and nearly two million

workers unemployed for more than 6 months, President Bush and

the Congress should approve a plan that will create jobs in our

communities and ensure that our future transportation needs are

met. As a bipartisan group of 43 United States Senators recently

stated in a letter to President Bush, ‘‘A robust public transportation infrastructure is vital to continuing America’s economic

growth.’’

Security

Q.2. In reviewing your testimony, I was struck by your comment

that a recent survey of ATU members showed that 80 percent of

respondents reported that they had not received any security trainVerDate 11-MAY-2000 07:35 Oct 14, 2004 Jkt 096194 PO 00000 Frm 00099 Fmt 6621 Sfmt 6601 S:\DOCS\96194.TXT BANK1 PsN: BANK1
96

ing from their employer. As one who believes this is a vital issue

that must be addressed in the reauthorization, I would be interested to learn if the ATU has any specific legislative proposals or

funding levels to ensure that transit employees, who are our eyes

and ears in keeping transit systems and riders secure, have the

training they need?

A.2. Again, Senator Reed, thank you for your question and for your

continuing efforts to address the pressing security concerns of the

transit industry. The ATU firmly believes that in order to ensure

that all frontline transit employees, including vehicle operators and

maintenance employees, receive the necessary security training,

there must be a specific legislative and regulatory requirement that

all transit systems develop and implement, through a security committee composed of an equal number of employee representatives

and management representatives, a comprehensive, system-specific, security training program that includes regularly scheduled

reviews and update sessions and new employee training. Failure to

meet the training requirement should result in the withholding of

FTA funds in an amount determined by the Secretary.

In addition to training, all transit systems should be required to

adopt a safety and security plan as a condition of receiving FTA

funding. Currently, only rail fixed guideway transit systems are

required to have such a plan. There is no similar requirement

for transit bus systems. In today’s new reality, all transit systems,

bus and rail, should adopt a security plan, again, to be overseen

and implemented by a security committee, including both management and employee representatives. Minimum standards for such

plans should be set by the FTA after thorough consultation with

industry security experts, the Transportation Security Administration (TSA), the transit industry and transit labor organizations.

As I mentioned in my testimony, a lack of funding is the number

one obstacle for transit agencies attempting to address security

needs right now. In order for these agencies to meet the minimum

training and planning requirements discussed above, Congress

must dedicate a source of funding for these purposes. At a minimum, $15 million a year should be authorized from the general

fund to assist transit agencies in meeting these requirements.

In order to address the immediate concern for training, the ATU

is currently calling on the Department of Homeland Security (DHS)

and TSA to dedicate funding for frontline transit employee security

training. Further, in the House, we have endorsed and are seeking

passage of H.R. 1148, The Public Transportation Systems Vulnerability and Reduction Act of 2003, introduced by Representatives

Juanita Millender-McDonald (D–37th/CA) and Mike Ferguson

(R–7th/NJ). H.R. 1148 would authorize $8 million (of the necessary

$15 million) solely for frontline transit employee security training.

We are currently seeking a sponsor for a companion bill in the

Senate.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SARBANES

FROM ROBERT MOLOFSKY

Q.1. Administrator Dorn testified last year before this Committee

that ‘‘The guaranteed funding commitment, in terms of the Administration’s point of view, has been one of the key successes of

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ISTEA and TEA–21. Most importantly, in our view, it has leveraged State and local investments in transit and in transportation

generally.’’ Do you agree with that statement? What do you believe

would be the practical effect on your members if TEA–21’s guarantees around the entire transit program were not continued in the

next bill?

A.1. Senator Sarbanes, thank you for your question. We certainly

agree with Administrator Dorn’s statement on the importance of

TEA–21’s firewalls. Without question, the new programs, planning

rules, and increased levels of funding for transit adopted under

ISTEA and TEA–21 have changed the nature of America’s transportation policies. However, the change in United States surface

transportation law that has had the greatest impact on improving

the quality and delivery of transit services has been the guaranteed

funding levels for transit; between fiscal years 1998–2003, $36

billion was set aside for public transportation purposes by a

unique budgetary firewall erected between transit funds and other

programs funded from the United States domestic discretionary

budget.

Under TEA–21’s budget structure, funds taken from the transit

program are not eligible for any other Federal discretionary program. This unique transit firewall, designed to ensure the funding

of FTA programs at specific annual guaranteed levels, has worked

exactly as designed; since 1998, the Congress and two separate Administrations have honored TEA–21’s firewalls by recommending

funding of the Federal transit program at the guaranteed levels.

As a result of this predictable, increased funding, transit agencies have been able to engage in long-term planning, enabling them

to expand service through the more than 360,000 highly skilled

transit professionals who provide safe, top quality public transportation. The guaranteed funding levels have provided a unique

sense of stability in the public transportation industry, which is reflected in the recent ridership surge.

ATU supports maintaining the funding guarantees included in

TEA–21, especially given the proven ability of systems to rely on

the guaranteed funds and leverage future Federal funding via the

use of grant anticipation financing. Such financing has generated

a record number of bus and rail projects during the 6 years of

TEA–21, creating thousands of new jobs in the public transportation industry. As a result, ATU membership now stands at an

all-time high of 180,000, up from approximately 155,000 in the

year preceding TEA–21.

Therefore, given the Administration’s past recognition of the importance of TEA–21’s guaranteed funding provisions, we cannot understand why SAFETEA proposes to guarantee only a portion of

the program, rather than the entire program, as carried out under

TEA–21. In fact, for fiscal year 2004, the Administration is proposing a guaranteed level of only $5.9 billion for the Federal transit program, which is a $1.3 billion cut from the current fiscal year.

The guaranteed funding level in SAFETEA for fiscal year 2004 is

17.9 percent less than the guaranteed funding level in TEA–21

for fiscal year 2003. In fact, under SAFETEA, the Administration would not even reach the current level of spending by the end

of the reauthorization period. Guaranteed public transit funding

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would be 8 percent less in fiscal year 2009 than it is in fiscal year

2003!

For our members specifically, the discontinuation of the firewalls

would mean the loss of jobs. In addition to leveraging significant

investment from the States, the TEA–21 firewalls have also been

the driving force behind many of the transit ballot measures that

have passed at the local level in recent years. ATU has participated

in many of the campaigns for these local transit initiatives (attached), many of which passed only because of the promise of guaranteed Federal funds to match local dollars. In many of these local

campaigns, a loss at the ballot box would have meant a significant

reduction in fixed route services, loss of man hours, and layoffs.

The Congress must ensure that the guaranteed Federal funding

levels under TEA–21 are preserved and that the next surface

transportation bill maintains these crucial firewalls so that we may

continue to provide the highest quality, safest possible level of

transit service.

Q.2. The ATU has proposed an incentive program to encourage

States to make more resources available for transit. Why did you

choose this model rather than a direct mandate? What are the potential benefits of this proposal? Are there any other examples in

Federal law of incentive programs like this?

A.2. Thank you for the opportunity to discuss the ATU’s proposed

Flexibility Incentive Grant (FIG) Program, which is designed to

provide incentives that would encourage States to establish new

sources of revenue for transit projects and services and to reward

States for creating more flexibility in the use of their existing

transportation funds. Attached please find draft legislative language creating such a program.

Despite record levels of Federal investment and the undeniable

will of local jurisdictions to tax themselves for the purposes of increasing the level and quality of public transportation services,

State funding for public transportation has been grossly inadequate

in recent years. As a result of this and other factors, we are currently experiencing widespread fare increases, service cuts, and

massive layoffs in the transit industry.

The FIG Program is designed to encourage States to think twice

before they cut transit funding by providing ‘‘bonus’’ Federal transportation dollars to those States that increase public transportation

funding or take steps to increase funding. Significantly, States

could use funds derived under the FIG Program for any highway

or transit projects eligible for assistance under Title 23 or Chapter

53 of Title 49. Moreover, the program would be funded out of General Funds and therefore would not put further pressure on the

Federal Highway Trust Fund.

Under the proposed FIG Program, the Secretary of Transportation would be authorized to allocate $5 million annually to each

State that increases transit expenditures by at least 10 percent as

compared to the previous fiscal year. If a State is already expending more than $1 billion on public transportation, the Secretary

would be authorized to allocate $10 million to such State if it increases transit expenditures by at least 1 percent.

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In addition, States would be eligible for grants on the condition

that they create new dedicated sources of revenue for public transportation. Such sources may include the dedication of new State

motor fuels taxes, sales taxes, interest on existing highway funds,

motor vehicle excise taxes, tolls, loans to be made out of highway

funds, or other sources of funding.

Finally, in order to encourage flexibility in the spirit of ISTEA,

as continued under TEA–21, the FIG Program would authorize the

Secretary of Transportation to reward States for amending their

existing statutes or constitutions to allow funds that are currently

restricted for highway purposes only to be eligible for transit

projects and services as well as highway purposes.

We chose the framework of a bonus program rather than a direct

mandate because the intent of the FIG Program is not to penalize

States for failing to invest in transit; it is to encourage them to use

their existing transportation resources in a more efficient manner.

In today’s fiscal climate, State legislatures, facing huge deficits, in

many cases have little choice but to freeze or cut funding for many

important programs, including transit services. Penalizing States

for such actions would be not only unfair, but it would also put further stress on State budgets and transportation systems. Therefore,

the FIG Program is modeled as a ‘‘bonus’’ program to be awarded

in addition to any funds States receive through Title 23 or Chapter

53 of Title 49, and it would not affect existing formulas under

which States receive Federal transportation funds.

This proposal has many potential benefits. It seeks to unlock billions of dollars in State resources, each year, for public transportation, community and rural transportation, and ADA services.

While some States are heavily investing in public transportation,

others are struggling to meet their transportation needs simply because their archaic laws prevent them from using gas tax receipts

for any purpose other than highway use. Due to State constitutional or statutory provisions, in 34 States, all highway user tax

distribution funds must be used solely for highway purposes. The

Federal Government realized that such a policy was no longer efficient in 1982 when it carved out a small portion of the Federal

Highway Trust Fund for transit. If the States did the same with

their own transportation dollars, when combined with Federal dollars, perhaps the United States could finally approach the more

than $40 billion annual level that is needed for our Nation’s transit

systems.

Of course, the proposal is aimed at much more than changing

State constitutions. Essentially, it seeks to encourage State legislation similar to Arkansas Senate Bill 581, now Act 949 of 2001,

which created a permanent, dedicated source of revenue for transit

through the establishment of a rental car tax. The State’s new Public Transit Trust Fund is used to provide expanded public and community transportation throughout Arkansas. Similarly, Maryland

in 2001 approved a $500 million transit initiative that has increased public transportation services in every corner of the State,

from St. Mary’s County to Baltimore. The FIG Program would reward States such as Arkansas and Maryland for dedicating a significant portion of their revenue toward public transportation, and

it would encourage other States to take similar action.

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Finally, with regard to examples of similar incentive programs

under Federal law, there are currently two incentive programs in

the transportation sector which served as the model for the proposed FIG Program. Both programs attempt to encourage certain

behavior on the part of the States in connection with transportation policies. First, there is the TEA–21 created program that

provides ‘‘Safety incentive grants for use of seat belts’’ (23 U.S.C.

157, TEA–21 Section 1403). This program requires the Secretary to

determine which States had, for each of the previous calendar

years and the year preceding the previous calendar year, a State

seat belt use rate greater than the national average seat belt use

rate for that year. The program authorizes DOT to make grants to

those States that have reached a certain level of seat belt usage

and States that have implemented innovative projects to promote

increased seat belt use rates. Similarly, 23 U.S.C. 163 (TEA–21

Section 1404) authorizes ‘‘Safety incentives to prevent operation of

motor vehicles by intoxicated persons.’’ Under this Section, the Secretary is authorized to make a grant to any State that has enacted

and is enforcing a law that provides that any person with a blood

alcohol concentration of 0.08 percent or greater while operating a

motor vehicle shall be deemed to be driving while intoxicated.

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