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[Senate Hearing 109-]
[From the U.S. Government Publishing Office]

                                                       S. Hrg. 109	1010

 
                   EVALUATION OF THE ADMINISTRATION'S
                      FISCAL YEAR 2007 BUDGET FOR
                   THE FEDERAL TRANSIT ADMINISTRATION

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

 THE PRESIDENT'S PROPOSED BUDGET REQUEST FOR FISCAL YEAR 2007 FOR THE 
      FEDERAL TRANSIT ADMINISTRATION, DEPARTMENT OF TRANSPORTATION

                               __________

                           FEBRUARY 28, 2006

                               __________

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

      Available at: http: //www.access.gpo.gov /congress /senate/
                            senate05sh.html

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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  RICHARD C. SHELBY, Alabama, Chairman

ROBERT F. BENNETT, Utah              PAUL S. SARBANES, Maryland
WAYNE ALLARD, Colorado               CHRISTOPHER J. DODD, Connecticut
MICHAEL B. ENZI, Wyoming             TIM JOHNSON, South Dakota
CHUCK HAGEL, Nebraska                JACK REED, Rhode Island
RICK SANTORUM, Pennsylvania          CHARLES E. SCHUMER, New York
JIM BUNNING, Kentucky                EVAN BAYH, Indiana
MIKE CRAPO, Idaho                    THOMAS R. CARPER, Delaware
JOHN E. SUNUNU, New Hampshire        DEBBIE STABENOW, Michigan
ELIZABETH DOLE, North Carolina       ROBERT MENENDEZ, New Jersey
MEL MARTINEZ, Florida

             Kathleen L. Casey, Staff Director and Counsel

     Steven B. Harris, Democratic Staff Director and Chief Counsel

           Sherry E. Little, Senior Professional Staff Member

                    John East, Legislative Assistant

                Tewana Wilkerson, Legislative Assistant

                    Sarah Kline, Democratic Counsel

                       Aaron D. Klein, Economist

   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                       George E. Whittle, Editor

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                       TUESDAY, FEBRUARY 28, 2006

                                                                   Page

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

Opening statements, comments, or prepared statements of:
    Senator Allard...............................................     2
    Senator Carper...............................................     3
    Senator Bunning..............................................     5
    Senator Sarbanes.............................................    13
    Senator Menendez.............................................    16
        Prepared statement.......................................    25

                               WITNESSES

Sandra Bushue, Deputy Administrator, Federal Transit 
  Administration, U.S. Department of Transportation..............     5
    Prepared statement...........................................    26
    Response to written questions of:
        Senator Bunning..........................................    35
        Senator Sarbanes.........................................    40
        Senator Carper...........................................    43
Patrick L. McCrory, Mayor, City of Charlotte, North Carolina on 
  Behalf of the United States Conference of Mayors...............    19
    Prepared statement...........................................    30
William Millar, President, American Public Transportation 
  Association....................................................    21
    Prepared statement...........................................    32
    Response to a written question of Senator Bunning............    45

                                 (iii)

                   EVALUATION OF THE ADMINISTRATION'S
                     FISCAL YEAR 2007 BUDGET FOR
                   THE FEDERAL TRANSIT ADMINISTRATION

                              ----------                              

                       TUESDAY, FEBRUARY 28, 2006

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:42 a.m., in room SD-538, 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.
    Today, we are meeting to consider the Administration's 2007 
budget for the Federal Transit Administration. We will have two 
panels testifying. Our first witness is Sandra Bushue, Deputy 
Administrator of the FTA. Our second panel is comprised of 
William Millar, President of the American Public Transportation 
Association, and testifying on behalf of the U.S. Conference of 
Mayors is the Patrick McCrory, Mayor of Charlotte North 
Carolina.
    Let me just begin by saying that both Senator Sarbanes and 
I are pleased that the SAFETEA reauthorization process is over. 
It was important for us to have a well thought out piece of 
legislation that fosters investment in public transportation, 
because it builds better communities, provides transportation 
opportunities for elderly and low-income people, and relieves 
congestion on our roadways.
    We stuck to our guns and fought to see that transit got 
increased funding in SAFETEA. I am proud to say that the new 
authorization levels provide for a 46 percent increase over T-
21 levels. So I am pleased that the Administration, with one 
exception, has funded FTA at the level that we authorized for 
2007. There is a dire need for more transit investment in this 
country, and this budget will help fund many of the priorities 
this Committee cares deeply about.
    I am concerned about two elements of the budget, however; 
first, the $100 million shortfall in the Small Starts program, 
a new program we created in SAFETEA. We created this program 
for a good reason. There is a nationwide demand for Small 
Starts projects, as evidenced by the 50-plus requests submitted 
to us during the drafting of the bill.
    The shortfall is peculiar to us, as we worked closely with 
the Administration to develop a flexible program to fund small 
but vital transit projects, like bus rapid transit, which is 
not cost-effective or efficient to subject to the lengthy and 
expensive approval process necessary for larger endeavors.
    This budget raises an additional concern: The 
Administration chose to fully fund the Federal highway program, 
which I strongly support, but by not fully funding transit, the 
budget undermines the historic 80/20 split between highways and 
transit that was a hallmark of this reauthorization.
    Let me note, with these exceptions, the Administration 
chose to follow the framework of SAFETEA. The budget request 
respects the creation of new programs. It gives priority to the 
rulemakings that the law mandates and generally tracks closely 
with the law. I am pleased to see that. I think this is a 
testament to the hard work of this Committee and the great need 
that is out there.
    I appreciate the opportunity to address these issues, and I 
look forward to hearing from our witnesses.
    Senator Allard.

               STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Mr. Chairman, I would like to thank you for 
holding these hearings to examine the Federal Transit 
Administration's budget proposal for fiscal year 2007, and as 
Chairman of the Subcommittee on Housing and Transportation, I 
appreciate the opportunity to work with you on issues affecting 
our Nation's public transportation network.
    Chairman Shelby. Closely.
    Senator Allard. Last year's enactment of SAFETEA brought 
with it a host of changes for public transportation, and I 
particularly supported creation of a new Growing States formula 
and a stronger emphasis on the bus program, since most 
Americans rely on bus service for their bus transportation 
service.
    I have been pleased to the Administration moving forward 
with the implementation of these new provisions. While I am 
pleased that the Administration's budget proposal primarily 
follows the outline written by Congress in SAFETEA, I am very 
concerned with the deviation from the funding level for the new 
Small Starts program. This was referred to in the Chairman's 
opening remarks. And having worked with many Members of the 
Senate, I can tell you unequivocally that it is very popular in 
the Senate, and I think every State has a number of projects 
that fall under the Small Starts program, so I want to 
associate my remarks with the Chairman's concerns that he 
expressed in his opening statement.
    This program was important to many of us, which is why it 
was written into the law. Many of us have projects in our 
States that will fit very well into the new category rather 
than being placed inappropriately with bus projects or 
competing against traditional New Starts projects. We are all 
familiar with the tremendous demand for this program; 
therefore, I am quite puzzled as to why the FTA proposes 
funding it at only half the level specified by Congress.
    I am also concerned that this proposed funding cut violates 
the long-held understanding that funding for highways and 
transit will be treated equally; that is to say that if one is 
proposed for a cut, the other program would also be proposed 
for a proportional reduction. Yet, the highway programs are not 
proposed for any cuts, and no one benefits when transit are 
pitted against one another, which is why we worked so hard to 
resolve such issues when writing SAFETEA.
    It is disturbing that the Administration seems to so 
casually suggest undoing that careful balance. In light of 
these facts, I expect that FTA will be able to provide a very 
clear justification for this proposal.
    Beyond this concern, the budget proposal mirrors the 
outline from SAFETEA. Obviously, a number of these regulations 
are still being promulgated, and a number of programs are still 
being created. As Subcommittee Chairman, I intend to be 
actively involved in implementation and plan on working very 
closely with Chairman Shelby, Ranking Member Sarbanes, and 
Subcommittee Ranking Member Reed to conduct the necessary 
oversight, perhaps through additional hearings.
    Mr. Chairman, I also take this opportunity to note that the 
Committee is currently reviewing the nomination of the new 
Federal Transit Administrator, and you were nominated, you were 
put up here just a few weeks ago, I guess.
    Ms. Bushue. Thirty-seven days, to be exact.
    Senator Allard. Thirty-seven days.
    Ms. Bushue. Yes.
    [Laughter.]
    Senator Allard. And I want to take this opportunity to 
congratulate you on that.
    This is an important position, particularly in light of 
SAFETEA implementation, leadership at the agency is more 
critical than ever, and I look forward to working with you at 
the appropriate time as we move forward.
    Ms. Bushue. Thank you, Senator.
    Senator Allard. Again, Mr. Chairman, thank you for this 
opportunity to review FTA's budget request. This hearing will 
be an important part of the Committee's ongoing efforts to see 
that Americans have access to effective, efficient public 
transportation services.
    Thank you, Mr. Chairman.
    Chairman Shelby. Thank you.
    Senator Carper.

             STATEMENT OF SENATOR THOMAS R. CARPER

    Senator Carper. Thanks, Mr. Chairman, and welcome. You say 
37 days?
    Ms. Bushue. Yes.
    Senator Carper. How many hours?
    [Laughter.]
    Thank you for joining us today and good luck in your 
nomination.
    As our highways are clogged with gridlock and our skies 
filled with, among other things, smog, the critical need for 
our transit service across this country, I think, becomes 
clearer and clearer. I believe we must work diligently to 
promote new and strengthen transit operations in both rural and 
urban areas, and we are seeking to do that in my little State 
of Delaware.
    In recent years, there has been tremendous growth and 
interest in transit across my State and across the Delaware 
Valley and the Delmarva Peninsula, where we live, but also 
across the country. And according to some statistics that were 
collected from transit agencies Nationwide by the American 
Public Transportation Association, transit ridership nearly 
doubled from 1990 to 2000, and my guess is that some of the 
increases in gasoline prices we have seen in recent months will 
add to that.
    In Delaware, we are adding the capacity to the commuter 
rail line between Wilmington and Newark, Delaware, and that 
happens to be the Northeast Corridor, and SEPTA, which is the 
Southeast Pennsylvania Transit operation that uses that rail 
corridor, but riding capacity in our State to the commuter rail 
line between those two towns.
    We are also designing an extension of a commuter rail line 
from Newark down to Middletown, which is off the Northeast 
Corridor and heading south. I like to describe it as a 
downpayment, if you will, on eventual rail transit service to 
Dover from Wilmington and Newark and the northern part of our 
State.
    And in the Transportation Reauthorization Bill that passed 
last summer, I believe the Congress authorized close to 400 new 
transit projects. This increased investment in transit has been 
possible because of the Federal-State-local partnership that 
was created in 1991 in ISTEA and has continued in subsequent 
reauthorizations. Creating a dependable and a consistent stream 
of funds supported investment in this very important 
transportation option as increased gas prices and traffic are 
fostering new demands, and the aging of America is increasing 
the need.
    I believe we must continue to bolster this relationship 
with a renewed commitment that keeps pace with the growing 
demand. I do not want to disappoint--my colleagues here both 
talked about the Small Starts transit program, so we are going 
to make this bipartisan. But I was disappointed by the fact 
that the Administration's 2007 budget requests, as you have 
heard, about half of that which was authorized in the Small 
Starts transit program. The program was all created, as we all 
know, in SAFETEA-LU, to provide funding and an expedited 
approval process for streetcars, for light rail, for bus rapid 
transit, and commuter rail projects; I think projects that have 
a Federal share of less than $75 million.
    Small Starts, as we know, encourages the development of 
smaller scale transit projects that can be built more quickly 
and push State and local governments to take on a greater 
portion of the costs, which we need to do. Cutting these funds 
could lead, as my colleagues have suggested, to smaller and 
less expensive projects being delayed or abandoned altogether, 
and communities could lose what I believe or what we believe is 
an important tool to reduce congestion and improve air quality.
    A second concern I want to share with you, and then, I will 
stop, but I have a concern about the fact that the Federal 
Transit Administration has inserted itself into the Amtrak 
funding debate. A provision was slipped into the fiscal year 
2006 Transportation Appropriations Conference Report certainly 
unbeknownst to me at the last minute directing the USDOT to 
reevaluate the fees paid by commuter railroads that operate in 
the Northeast Corridor to support the maintenance and capital 
costs of the Northeast Corridor.
    On February 10, I am told, of this year, the Federal 
Transit Administration put a notice in the Federal Register 
stating that they might withhold transit funding from commuter 
rail systems to cover the newly assessed Northeast Corridor 
maintenance fees.
    I might be wrong on this, but it sounds to me like this is 
nothing but a transfer of funds from the mass transit account 
to Amtrak, which results in the underfunding of both. State and 
local governments understand and are willing to contribute more 
to support Amtrak. However, the question of how to allocate the 
costs of maintaining the Northeast Corridor should be answered 
in an Amtrak reauthorization bill, not an appropriations 
conference report, and it certainly should not be done by 
robbing Peter to pay Paul.
    Thank you.
    Chairman Shelby. Senator Bunning.

                STATEMENT OF SENATOR JIM BUNNING

    Senator Bunning. Thank you, Mr. Chairman, for holding this 
very important hearing today. I recognize that we have several 
witnesses who will each provide us with a different perspective 
on the public transportation industry.
    We are fortunate that we will be hearing from the Deputy 
Administrator of the Federal Transit Administration, from the 
American Public Transportation Association, representing the 
private sector, and from a leader of a local community, the 
Mayor of Charlotte, North Carolina. Thank you all for being 
here today.
    Our public transportation system is vital to communities of 
all sizes, in populated cities and very much so in rural 
communities. For many, it is the only source of transportation 
allowing them to go to work and to reach their community. It is 
important that we provide the necessary resources to carry out 
effective and efficient transportation for those who need it in 
all communities.
    For this reason among many, I look forward to learning more 
about the Administration's proposed funding levels and how we 
can better implement new and existing FTA programs.
    Thank you again, Mr. Chairman, for holding this hearing, 
and I want to thank the witnesses again for their 
participation.
    Chairman Shelby. Thank you, Senator. Your written testimony 
will be made part of the record in its entirety; if you will 
sum up briefly your high points. Thank you, welcome to the 
Committee.

                   STATEMENT OF SANDRA BUSHUE

                     DEPUTY ADMINISTRATOR,

                 FEDERAL TRANSIT ADMINISTRATION

               U.S. DEPARTMENT OF TRANSPORTATION

    Ms. Bushue. Thank you.
    Thank you, Mr. Chairman, for the opportunity to testify 
today on the Federal Transit Administration's fiscal year 2007 
budget. And as new to the FTA, I would like to say that I am 
really honored and humbled to be with you today. We appreciate, 
Mr. Chairman, your continued interest and your Committee's 
strong commitment to public transportation as embodied in the 
SAFETEA-LU Act enacted by Congress and signed by the President 
on August 10, 2005.
    I am pleased to report to the Committee that the 
President's fiscal year 2007 budget for transit is a record 
$8.9 billion. This is significant given the overall context of 
the President's 2007 budget. At a time when most nonsecurity 
related Government programs are experiencing reductions in 
funding levels and when the Department of Transportation's 
total budget is holding steady, funding in this budget grows by 
more than 4 percent, or $370 million, compared to the fiscal 
year 2006 level. This shows the high priority this 
Administration puts on funding public transportation among many 
competing national priorities.
    Since my recent arrival 37 days ago, I have been impressed 
with the energy and dedication of the FTA staff. Thus, I would 
like to take an opportunity to focus on a few of FTA's 
priorities. They include the effective and timely 
implementation of SAFETEA-LU; the effective management and 
oversight of almost $9 billion in formula and capital 
investment grants, especially New Start's full funding grant 
agreements; and the need to attract and retain the best 
workforce with the skill set to meet the challenges facing the 
agency.
    Since the President signed SAFETEA-LU in August 2005, FTA 
has worked diligently to implement the new changes and new 
requirements. To name a few, we have already signed a 
Memorandum of Understanding Annex with the Department of 
Homeland Security and published in the Federal Register for 
public comment New Starts Policy Guidance, an Advance Notice of 
Proposed Rulemaking for the Small Starts program, and a Notice 
of Proposed Rulemaking for Buy America.
    We have also held numerous outreach meetings and listening 
sessions with the transit industry to discuss the changes in 
SAFETEA-LU and to solicit comments. While I am proud of these 
accomplishments to date, there is still much to do, and we 
remain committed to the aggressive schedule we have set for 
ourselves to implement all the requirements of SAFETEA-LU in a 
timely manner.
    Now, I would like to touch on some of the highlights of the 
President's 2007 budget for the FTA. As I stated earlier, the 
budget reflects the Administration's commitment to public 
transportation as envisioned in SAFETEA-LU. In fiscal year 
2007, $7.3 billion is requested in a solely trust fund account 
for our urban formula and Fixed Guideway Modernization programs 
and for bus and bus-related capital projects. Also included in 
this account are several transit programs administered 
primarily by the States.
    As the capital investment program commonly known as New 
Starts the budget requests almost $1.5 billion. The $1.5 
billion level fully funds the Federal commitment included in 16 
existing full funding grant agreements (FFGAs) with transit 
agencies. We are again requesting funding for two projects, one 
in Pittsburgh and one in New York, that we expect to sign a 
full funding grant agreement before the end of fiscal year 
2006.
    I am also pleased to announce that five new projects have 
made it to the New Starts finish line and we believe are ready 
for full funding grant agreements. These projects include three 
light rail projects: Denver, Colorado; Portland, Oregon; and 
Dallas, Texas; in addition, two commuter rail projects, in 
Washington County, Oregon, and Salt Lake City, Utah, are also 
ready for full funding grant agreements.
    Mr. Chairman, I also want to share with you and the Members 
of the Committee our plans for implementing the Small Starts 
program in fiscal year 2007. This program will provide, as you 
know, Federal Small Starts funding up to $75 million for 
projects under $250 million in total cost. We are very excited 
about this program, and we note that this Committee shares this 
enthusiasm, as I just heard.
    It is a program we originally recommended to Congress 
because it levels the playing field for medium and small 
communities. For example, this program will ensure that 
Birmingham, Alabama, does not have to compete with a big New 
York project for Federal transit funds. We know from several 
listening sessions we have held that communities across the 
country are interested in this program and how it will work.
    Last month, we published in the Federal Register for public 
comment an Advance Notice of Proposed Rulemaking on the 
evaluation criteria and other requirements. Final regulations 
are not expected until June 2007. Given all the work ahead of 
us and the strong interest by communities to help us develop 
the program requirements, we believe that $100 million is a 
great place to start with this new program. It is a good, sound 
first investment for a program we are committed to implement 
during fiscal year 2007.
    And finally, in the budget, we are requesting $85 million 
in administrative expenses to help ensure we can effectively 
and efficiently fulfill our mission. This request supports 14 
additional full time equivalent personnel, for a total of 531 
FTEs and other administrative needs.
    Mr. Chairman, sincerely, I look forward to working with 
this Committee and with you in support of public transportation 
in our great country. Thank you again for this opportunity to 
testify on the fiscal year 2007 budget and other issues, and I 
look forward to your questions.
    Thank you, Mr. Chairman.
    Chairman Shelby. Thank you.
    As I mentioned in my opening statement, my colleagues and I 
were anticipating that the Administration would fully fund the 
transit program consistent with the authorization in SAFETEA. 
To develop more effective solutions to transit issues, like bus 
rapid transit, was a top priority for us in the authorization. 
Can you provide the Committee today with the Administration's 
rationale for cutting the Small Starts program in half, and if 
there was concern about the regulatory structure not being in 
place for the Small Starts program, why fund this new program 
at half its authorized level at all and instead wait until 2007 
to fund it fully?
    Ms. Bushue. Thank you, Mr. Chairman.
    First, I would like to say that we are really excited about 
this new program, and with the advance proposed rulemaking that 
we have out, we are working to ensure and want to ensure, that 
all our stakeholders and the industry are invested in this 
program and can help us to make it the dynamic program we think 
it will become. As mentioned, optimistically, we believe that 
we will be ready to go forward with this program by June 2007. 
This would leave only 3 months in the fiscal year 2007, so we 
believe $100 million at this time is the appropriate 
investment.
    Chairman Shelby. The Banking Committee has spent a 
considerable amount of time trying to evaluate the needs of 
victims of Hurricane Katrina and Rita. I understand that the 
Administration has yet to submit a request for supplemental 
appropriations that address transit needs. Would you provide 
the Committee with an update on what the Federal Transit 
Administration is doing in this area?
    Ms. Bushue. Yes, Mr. Chairman, I am happy to do that. I 
would like to say that since I have been in FTA, I have had the 
opportunity to travel down to Baton Rouge and to see the 
wonderful work that Bill Neville, the head of the New Orleans 
Transportation Authority, has done. It has just been really 
fantastic to see his good work.
    Chairman Shelby. Have you also been to New Orleans?
    Ms. Bushue. Unfortunately, I did not make it down there. I 
was in Baton Rouge. I did not go and tour the disaster site.
    Chairman Shelby. Well, you should.
    Ms. Bushue. Actually, I know I am going to be back there 
again, and that will be a top priority, but thank you.
    In the supplemental that was sent to Congress, three 
requests were made for Federal funding from three different 
modes. It was to replace or repair Federal property that had 
been lost in Katrina: For the FAA, an air traffic control 
tower, for MARAD, a port facility; and for the Federal Highway 
Administration, to repair an interstate highway.
    FTA has received around $68 million through FEMA on a 
mission assignment for the services and operations for transit 
down in the Gulf Coast area. We currently have a consultant 
reviewing the capital costs that are required to repair the 
damage. We will be looking at those costs, and working with the 
private insurance companies and the FEMA public assistance 
programs, to see how we can help that region.
    Chairman Shelby. While we certainly support the 
Administration's choice to fully fund the important highway 
program at SAFETEA levels, I am confused as to why, if cuts 
were necessary, transit and highways were not cut back 
equivalent amounts. The conferees on the conference committee 
for SAFETEA made a conscious effort to treat highways and 
transit similarly. What is the rationale?
    Ms. Bushue. First, I would like to compliment the Committee 
for the funding of transit in SAFETEA-LU. The cut that you are 
referencing is the reduction in the Small Starts program. 
Outside of that, transit is funded at the SAFETEA-LU authorized 
level. Again, it goes back to Small Starts being a new program. 
We do not believe we will have it up and ready to go until June 
2007. That is why we requested $100 million, and that is the 
$100 million reduction from the authorized level.
    Chairman Shelby. Senator Allard.
    Senator Allard. Welcome, and I, as you know, in your 
testimony, the FTA is proposing a clean fuels and electric 
drive bus deployment program to encourage and provide 
incentives to transit agencies to procure low emissions 
technology buses, including hybrid electric buses. I also have 
an interest in renewable energy.
    Ms. Bushue. Yes.
    Senator Allard. In fact, I am Chairman or Co-Chairman of 
the Energy Efficient Caucus, so I am very pleased with your 
efforts in this regard.
    Ms. Bushue. Thank you.
    Senator Allard. Could you please elaborate on this proposal 
and indicate to me whether you intend to forward a legislative 
proposal to Congress, and if so, when?
    Ms. Bushue. Since I am relatively new, I think if you do 
not mind, I am not as familiar with that program as I should 
be, and I would like to be able to get back to you at a later 
date.
    Senator Allard. That would be fine.
    Ms. Bushue. Would that be okay? Thank you, sir.
    Senator Allard. The other question I wanted to bring up is 
I have worked personally with the Colorado projects that we 
have to stress the importance of staying on time and on budget, 
and a couple of really large projects we have in Colorado that 
I think are worth noting is Rocky Flats for cleanup was a 
nuclear trigger manufacturing facilities. We cleaned it up 
ahead of schedule by over a year and saved many millions of 
dollars in doing that.
    Right now, I understand that our Southwest rail line, I 
have been working with them, and they understand the importance 
of staying on time and on budget, that it is close to being on 
time and on budget. And so, I would like to have you discuss 
the budget and schedule status for the New Starts projects 
currently under construction, if you would, please.
    Ms. Bushue. As you know, there are around 18. We monitor 
these projects very carefully, and I share your concern, 
Senator, that these projects are on time and under budget.
    We do have one recent concern. As you all know, 
construction prices have increased due to the increase in steel 
and fuel prices. FTA staff is very sensitive to this and we are 
working very closely with our clients, if I may use that term, 
to ensure that we can work out these issues. We are making 
every effort to make sure that these projects, again, stay 
definitely on time and within the budget.
    Senator Allard. I have always told my constituents and 
agencies I work with back in Colorado that if you will stay on 
time and budget, it is okay for everybody.
    Ms. Bushue. Absolutely.
    Senator Allard. I think it instills confidence in the 
projects that we have in the State of Colorado and also, I 
think, instills projects at the National level in your 
programs, and in that way, I think we all benefit.
    Ms. Bushue. I totally agree with you, sir.
    Senator Allard. And so, we try and push that as much as we 
possibly can.
    I was also pleased to see that Denver's west corridor was 
included in the list of proposed full funding grant agreements. 
This light rail corridor will be an important component of 
Denver's growing transit network, and RTD has worked diligently 
to move it forward through the process. The recommended funding 
amounts for the FFGA is obviously based on the scheduled amount 
from the FFGA, but how were the funding recommendations 
determined for the proposed FFGAs?
    Ms. Bushue. I am sorry; would you restate that for me?
    Senator Allard. How were the funding recommendations 
determined for the proposed full funding grant agreements?
    Ms. Bushue. And you are talking specifically about 
Colorado?
    Senator Allard. No, just in general.
    Ms. Bushue. That is a good question. In only my second week 
in the job, I did the rollout of the New Starts program for 
fiscal year 2006. There is a series of technical criteria that 
are used to determine which projects are worthy. We focus on 
ridership, and even more important, on the financing, 
especially as it relates to the State and local commitment.
    It is very important that the States and the locality are 
invested in the project and really want the infrastructure 
improvements. So we evaluate what sort of commitment comes from 
the State and the locality.
    Senator Allard. That is very helpful, and the people of 
Colorado and Denver actually voted a tax increase to help pay 
for these projects. So there is a very solid commitment there.
    Ms. Bushue. That is correct.
    Senator Allard. Thank you very much. My time has expired.
    Ms. Bushue. Thank you, Senator.
    Chairman Shelby. Senator Carper.
    Senator Carper. Thanks, Mr. Chairman.
    I do not think I am going to ask any more questions about 
the Small Starts projects. You have heard from us, and I 
appreciate the fact that you say that $100 million is going to 
be enough to fund for the year a program that will start a year 
and a half from now. I just wish it did not take a year and a 
half to start. Why does it take so long to get up and running.
    Ms. Bushue. That is a good question, Senator.
    Senator Carper. It is not a year and a half. It is another 
15 months, though.
    Ms. Bushue. Largely, it is due to really two reasons: 
First, it is a new program, and we are really reaching out to 
the stakeholders to ensure that they are invested in the 
program and that the program is designed to meet their needs. 
Second, the overall review process for a new program through 
some statutory requirements does take some time to complete.
    I must stress that we are really reaching out to the 
industry on this program. We, again, put out an advance notice 
for rulemaking, which we did not need to do. However, we wanted 
to get formal comments from the industry. We are also hosting 
listening sessions, around the country which is a little bit 
new. This will allow us more detail to the industry and collect 
their comments to help us pull together the proper guidance for 
this program.
    Senator Carper. As you do all that listening, just listen 
to us as well.
    Ms. Bushue. Absolutely, Senator, we will.
    Senator Carper. I think from the time we actually passed 
the legislation, the President signed it, until this program 
will be ready to roll is about 2 years.
    Ms. Bushue. Yes.
    Senator Carper. That seems like a long time.
    I want to come back to another issue that I mentioned in my 
opening statement, and that deals with the burden that we are 
prepared to place on States and local transit authorities to 
increase the fees that they are paying for the maintenance of 
the Northeast Corridor.
    Tell me, what is your understanding of how the system 
currently operates with respect to determining the magnitude of 
the fees, the fee schedule, if you will, that transit agencies 
have to pay to Amtrak in order to use the Northeast Corridor, 
which Amtrak owns from Boston to Washington? What is the 
current arrangement?
    Ms. Bushue. As you know, that language was put in the 
fiscal year 2006 appropriations bill in the FRA title. Right 
now, this program is still being evaluated. We at DOT are 
looking at it. FRA is on point of this program. FTA is 
facilitating. The commuter rail operators are our customers, as 
you know.
    Senator Carper. No, no, what was my question? My question 
was how----
    Ms. Bushue. Excuse me.
    Senator Carper. What is the status quo? How do transit 
agencies, how do we currently determine, how is it determined 
what fees transit agencies from Boston to Washington are going 
to pay to Amtrak? How does it currently work?
    Ms. Bushue. It is a new program, and that is being 
determined. We do not know what formula we are going to use. We 
are not sure yet what fees each State will have to pay. That is 
still being determined. As a matter of fact, as we speak, there 
is a group of DOT----
    Senator Carper. I do not mean to be rude, but let me just 
make sure we stay on point here. Currently, transit agencies 
pay fees to Amtrak. This is not a new thing. How are those fees 
determined?
    Ms. Bushue. Sir, I will have to get back to you on that. I 
really do not know at this point know how the commuter rails 
pay Amtrak for the use of the track.
    Senator Carper. You have been around 37 days, and you do 
not know that yet?
    [Laughter.]
    I say that with tongue in cheek.
    Ms. Bushue. I know, sir, but----
    Senator Carper. Maybe on the 38th day, you can get your 
arms around that one, too.
    But currently, I believe the transit agencies, SEPTA in our 
region but up and down the corridor, they actually negotiate 
with Amtrak, and they reach between the two parties, the 
transit agencies saying this is how often we use the corridor; 
Amtrak, knowing what kind of wear and tear there is on the 
corridor from the utilization by the transit rail operations, 
they reach an agreement on what the transit authorities will 
pay.
    As I understand it, what this language does, and let me 
just say, some of the fee schedules have been agreed to not 
just for this year and not just for next year, but I understand 
from a member of my staff that there is actually a schedule 
that goes up through maybe 2010, 2011 with respect to SEPTA and 
Amtrak.
    And for us to step in and say that while these fee 
schedules have been negotiated I think in good faith that we 
are going to come in after the fact and tell them now, you have 
to set that aside, and we are going to tell you what fees to 
schedule, seems wrongheaded.
    I yield to you.
    Ms. Bushue. Thank you.
    Again, this was new language in the fiscal year 2006 
appropriations bill that we are currently reviewing, and we 
have not really made any formal or final decisions on how we 
are going to implement this new rule.
    Senator Carper. I have a series of questions I am going to 
submit. Maybe you should turn your attention to this issue in 
the days ahead. If you would be good enough to respond to me, 
but this is--we just see something that just says, kind of 
shouts out at me, this is not right. And when I heard about 
this, I just said this is not right. And my hope is that you 
will not just take a close look at it but try to figure out 
what is the right thing to do, because I do not believe this 
is.
    Ms. Bushue. I understand, sir, and thank you.
    Chairman Shelby. Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    The New Freedoms program provides funds for public 
transportation alternatives beyond those required by the 
Americans with Disabilities Act, the ADA, to assist persons 
with disabilities. Some communities have already exceeded the 
minimum ADA requirements. The question then becomes what will 
happen in communities where existing services already exceed 
the ADA minimum requirements?
    For example, will communities that provide door-to-door 
service rather than curb-to-curb service be able to use the New 
Freedoms program to fund the incremental cost difference?
    Ms. Bushue. Thank you, Senator.
    As you know, the New Freedom program is in SAFETEA-LU. We 
are working on implementing it. The Federal Register notice 
that will be put out will request comment on the issue of 
funding existing services where they exceed. So that is 
something that we will definitely be looking at in the New 
Freedoms program.
    Senator Bunning. In other words, you do not have an answer.
    Ms. Bushue. At this time, as you know, it is a new program, 
and we are at the beginning of the rulemaking for it.
    Senator Bunning. But was it not in last year's bill?
    Ms. Bushue. I believe it was in the SAFETEA-LU 
reauthorization bill that was signed in August, right. Excuse 
me.
    Senator Bunning. Yes, last August; you are right.
    Ms. Bushue. As a result, we are drafting a circular to 
provide more guidelines on the provisions of this new program, 
but it was in the SAFETEA-LU bill that was signed in August.
    Senator Bunning. So we have no proposal or even proposed 
rule changes or how you are going to implement that?
    Ms. Bushue. We are in the middle of that process right now. 
Regarding your specific issues, we will be asking questions 
about them. But we are right now beginning to put together that 
new program.
    Senator Bunning. I would submit to you that I would like a 
written response, then, when you decide how you are going to do 
that.
    Ms. Bushue. Absolutely. We will be happy to provide that 
for you, sir.
    Senator Bunning. The same program, the New Freedoms and the 
Job Access Reverse Commuter program before it required 
coordinated public transportation and human services plans. How 
do you envision implementing this requirement? Will it be 
phased in? What will the expectation be for the coming Federal 
fiscal year?
    Ms. Bushue. Because, again, this is a new program. and I 
guess because of my newness in this position, I would like to 
get back to you as well in writing.
    Senator Bunning. Well, since the rest of my questions are 
about the Small Starts program, I will submit them also for the 
record and ask for your written response to them.
    Ms. Bushue. Okay, that would be great. Thank you.
    Senator Bunning. Thank you, Mr. Chairman.
    Chairman Shelby. Senator Sarbanes.

             STATEMENT OF SENATOR PAUL S. SARBANES

    Senator Sarbanes. Thank you very much, Mr. Chairman.
    Ms. Bushue, did I get it correct?
    Ms. Bushue. You did absolutely great, yes, sir.
    Senator Sarbanes. You know, we worked very hard on this 
legislation. It took a long time to get this SAFETEA bill 
passed. I want to commend the very skillful work of Chairman 
Shelby in that regard. He really was tireless in trying to move 
through the transit portion of this, which is what we have 
jurisdiction over, and also, the Subcommittee Chair and Ranking 
Members, Senator Allard and Senator Reed.
    Now, recognizing the importance of transit, the legislation 
authorizes almost a 50 percent increase in funding. So we were 
hopeful we would get this legislation finally in place after a 
delay of, you know, we had these temporary reauthorizations, 
and then, we finally passed it. The President signed it. 
Everyone was happy and excited, and we thought we would really 
get moving on this thing. Well, I am going to focus on, you 
know, we are losing momentum.
    First of all, the request in the budget is below the 
authorized amount for transit. It is at the authorized amount 
for highways. That is always a big issue, and one of the things 
that we worked very hard here on was the balance between the 
two and so forth and so on. That is a very delicate bargaining 
problem, I guess, would be the way to put it.
    But we put something out, and it was acceptable and so 
forth. Then, right out of the box, the budget request, the 
funding falls off of the agreement. That is very upsetting. 
Then, we had these Small Starts program cuts, which I gather 
the Chairman has asked about, but the demand is far in excess 
of the $200 million, let alone the $100 million. It is not as 
though there is a dearth of prospects for this Small Starts.
    So, you know, that kind of gives the knock to Small Starts. 
So you knock the balance between highway and transit; you knock 
the Small Starts. I am really concerned that--it is like a 
race. If you do not get out of the blocks at the beginning at a 
pretty good clip, you are going to end up last in the race, not 
first.
    So having said all of that, and you may want to address 
those items, I want to put a very specific question to you. 
There is a provision in SAFETEA which requires the FTA to amend 
the full funding grant agreement for Largo to provide $100 
million in Federal funds for the Washington Metro system. WMATA 
will be providing local funds for the remainder of the rail car 
purchases.
    This is very important, because we have the system in 
place. We have the platforms; we have the stations. We do not 
have enough cars. I mean, it pains me to see this 
infrastructure developed at considerable cost over the years 
and then to see our failure to maximize the use of the 
infrastructure when we have passengers who want to ride these 
trains.
    And if we can just get these extra cars, we can run longer 
trains more frequently. So the incremental costs in enhancing 
the capacity of the system are quite reasonable. We do not have 
to build more stations. We do not need to lengthen the 
platforms. We just need more cars, you will need a little more 
personnel, and so forth. And the FTA staff has not been 
responsive to trying to get this amendment to the FFGA, the 
full funding grant agreement. WMATA is desperate to get this 
going. The need is apparent. It makes sense. And there is a 
specific Congressional intent.
    What is the problem? What can we do about this?
    Ms. Bushue. Thank you, sir. As to your first question 
regarding the funding for fiscal year 2007, the President's 
budget, would fund it at a SAFETEA-authorized level with the 
exception of the Small Starts program. And as stated earlier, 
Small Starts is a new program, and we expect to have the 
guidance and the program ready to go by spring 2007.
    Therefore, we believe that the $100 million investment that 
we have proposed for that program for fiscal year 2007 is 
satisfactory.
    Senator Sarbanes. Why do you believe that?
    Ms. Bushue. Because----
    Senator Sarbanes. If there are a lot of programs which add 
up not to $100 million or $200 million but a significant 
multiple of that number, of Small Starts, why do you believe 
$100 million is enough? Where does that figure come from?
    Ms. Bushue. Actually, we are just looking at exactly when 
we will have the program up and running. And we hope to do so 
by June 2007, to be precise regarding the month. And that only 
would give us 3 months remaining in fiscal year 2007. So by the 
time we get it up and running, accept grants and so forth, we 
believe $100 million will be enough for fiscal year 2007.
    It is hoped, and it is a possibility that we can recapture 
that $100 million in the out years, but right now, for fiscal 
year 2007, we believe that the $100 million would be enough.
    As for your other issue regarding the rail cars for WMATA, 
they are in the President's budget. We are in talks with WMATA 
to determine what would be the amount of funding involved. At 
this time, we are still talking to them, and we hope to have a 
decision by April.
    Senator Sarbanes. The amount needed was decided in the 
legislation. That represents a Congressional decision at $100 
million. It was not left to the discretion of the FTA. That was 
decided in the Congressional legislation, and we obviously 
expect you to follow the Congressional legislation. The need 
for this is obviously apparent I guess would be the way to put 
it.
    Chairman Shelby. Senator Sarbanes, can I interject? I want 
to associate myself with Senator Sarbanes' remarks. We felt 
this was so clear, and we, on this side of the aisle, we wonder 
why you have not followed the language. We support him on this.
    Ms. Bushue. Yes, Mr. Chairman, that is why we have included 
this project that in the budget. At this point, we are just, 
again, in discussions with WMATA to determine what the amount 
should be. But we absolutely do have it in the President's 
budget, and again, will be working with WMATA and the Committee 
staff to have the full funding agreement amendment up here by 
this spring.
    Senator Sarbanes. I do not think it is a question of what 
the amount should be. It is just a question of working out the 
process by which the amount will be provided so WMATA can move 
ahead with these rail cars.
    Do you use the DC Metro yourself ?
    Ms. Bushue. I do, not as much as what I used to, but I do.
    Senator Sarbanes. Well, then, you will serve your own 
purposes.
    Ms. Bushue. Absolutely right, Senator, and by the way, I 
just want to let you know that I went to the Hunt Valley ribbon 
cutting ceremony in Timonium, Maryland, yesterday.
    Senator Sarbanes. Yes, I could not make that, because I was 
at a ceremony for the Silver Spring transit center.
    Ms. Bushue. But you were well-represented. And by the way, 
I would like to add, it was, as you know, a pretty cold day 
yesterday. I bet there were about 150 to 200 people there, 
hardy souls. I thought if there were 30 people there, I would 
have been impressed, but they were all there. We were out there 
for about 45 minutes to an hour, and that was really 
gratifying.
    It gets back to what I said earlier about the criteria for 
selecting full funding grant agreement recipients. It is really 
that local kind of ownership. It was very impressive, and I had 
a very nice time.
    Senator Sarbanes. That is another example of the point I 
was making about taking a capability and doing some incremental 
additions and significantly enhancing its capacity, because 
that line was not double-tracked throughout the length of it, 
and the double tracking now will mean cars will come every 10 
minutes instead of every 18 minutes.
    Ms. Bushue. That is right.
    Senator Sarbanes. So it is going to make a big difference.
    Mr. Chairman, my time has expired, but we are following 
this WMATA situation very closely, and I think the FTA needs to 
move to provide the $100 million so they can get on with the 
project.
    Chairman Shelby. Again, I want to associate myself with the 
remarks of Senator Sarbanes. I think the legislative language 
is clear. We hope you are going to get that done. It seems to 
be very cost-effective, too.
    Ms. Bushue. Yes.
    Chairman Shelby. Senator Menendez.

              STATEMENT OF SENATOR ROBERT MENENDEZ

    Senator Menendez. Thank you, Mr. Chairman.
    Mr. Chairman, I am very pleased to be on the first hearing 
on public transportation since I joined the Committee. This is 
the jurisdiction that I had in the Transportation Committee 
when I served in the other body, and it has been very 
important. We have the second highest percentage of transit 
riders in the Nation in New Jersey, and I want to thank you and 
the Ranking Member for ensuring that transit got record levels 
in this reauthorization as well as thank both of you.
    I know that when my predecessor, now our Governor, Senator 
Corzine, was here, you worked with him on some language that 
was very critical to us, and we appreciate it in New Jersey.
    So Administrator Bushue, I have two sets of questions, and 
hopefully, you can shed some light on it for me. One is are you 
familiar with the Trans-Hudson Midtown corridor project that is 
in the reauthorization?
    Ms. Bushue. Yes, I am, sir.
    Senator Menendez. We included some language in the 
transportation bill to help advance and project some 
preliminary engineering in that effort, and I was hoping you 
could let us know where we stand on that.
    Ms. Bushue. Certainly; absolutely. That is a very exciting 
and very ambitious project, if I may say.
    The language that was put into the bill asks for the 
project to be put into preliminary engineering within 120 days. 
However, the language did not include any waivers of the other 
statutory requirements which the FTA is under. So, therefore, 
because it is such a complex and large project, we are really 
focusing on the due diligence that is required to ensure that 
the project does become eligible for Federal assistance. We are 
working very closely with the people in your district on the 
project, and we hope to make some progress.
    But again, I think it is really at the pretty early stages 
at this point in time, and I am not sure; it does not seem like 
it is ready at this point to probably go into preliminary 
engineering. But we are working closely with the project 
sponsors.
    Senator Menendez. Do we have any sense of a timeframe?
    Ms. Bushue. I think it is really hard to say. We just 
recently, as I understand it, received some of the documents 
such as the environment impact study. We got the documents, in 
November, and we are still reviewing them. And so, at this 
point, I clearly cannot say when will be the appropriate time 
for the----
    Senator Menendez. We will be following up with your office.
    Ms. Bushue. That would be great. We would love to work with 
you on it. It is a great project.
    Senator Menendez. It is incredibly important to the 
region's future economic prosperity.
    Ms. Bushue. Absolutely.
    Senator Menendez. On behalf of not just the region but the 
Nation, but also, it has a very significant, in my view, in a 
post-September 11 world, a security element of having another 
access in and out of the region. So there are many dimensions 
to it.
    Let me turn to, since I talked about a post-September 11 
world, to transit security. I see, and I understand there is 
$42.5 million in the FTA budget for transit security; is that 
correct?
    Ms. Bushue. That is correct, sir.
    Senator Menendez. Now, I also see there is about $600 
million elsewhere in the budget for security grants to cover 
all critical infrastructure, including ports and transit from 
the Department of Homeland Security. Do you have any sense of 
whether, out of that budget, transit is getting anything more, 
or is your figure the figure for transit security?
    Ms. Bushue. As you know, Department of Homeland Security 
has jurisdiction for transit security. The $42.5 million that 
you see in the FTA's budget is the 1 percent setaside of 
urbanized area formula funds required by SAFETEA-LU. The rest 
of the funding comes from the Department of Homeland Security. 
As I mentioned, our number one act after SAFETEA-LU was enacted 
was to sign an MOU with the Department of Homeland Security to 
work with them as an adviser, as a consultant, on transit 
security issues.
    As I understand, the funding for transit security at DHS is 
$150 million.
    Senator Menendez. $150 million out of that $600 million?
    Ms. Bushue. I would assume that is correct.
    Senator Menendez. That would be in addition to your $42.5 
million?
    Ms. Bushue. That is correct.
    Senator Menendez. Now, your $42.5 million, how do you 
intend to spend that, and is this in coordination with other 
grants or----
    Ms. Bushue. Actually, it is a requirement that our grant 
recipients spend the 1 percent as they see fit. We do not 
really dictate to them how they should spend it, but we do 
review how they spend it.
    And I would like to also say, Senator, that our grant 
recipients are very much aware of the need to protect their 
property, and security is their number one priority. In my 
short tenure at the FTA, I have had the privilege to travel to 
New York City to see what is going on there. At every meeting I 
had with them transit security was truly the number one topic.
    Senator Menendez. I ask that question because under the DOT 
budget, it says that FTA will emphasize security training in 
these following areas: Training for transit system employees, 
emergency preparedness and response, and public awareness 
efforts, all which are welcomed, but it does nothing about 
application of technology in terms of creating security.
    So is that, is your understanding of how you are going to 
use the budget in accordance with what DOT has listed in their 
budget?
    Ms. Bushue. Our grantees will be using the $43 million for 
those three areas. And again, the Department of Homeland 
Security does have jurisdiction, and we will be working with 
them as a consultant to see how they use those additional 
monies.
    Senator Menendez. Now, the $150 million that you mentioned 
before, is that fiscal year 2006 or fiscal year 2007?
    Ms. Bushue. It is fiscal year 2006.
    Senator Menendez. What about 2007? Do we know?
    Ms. Bushue. I am not----
    Senator Menendez. If you could get back to us through the 
Committee, I would appreciate that.
    Ms. Bushue. Yes, we will absolutely get back to you.
    Senator Menendez. Last, let me just say that our challenge 
is very significant. We have 100,000 New Jersey Transit riders 
every day; we have a huge number of PATH riders between New 
York and New Jersey. We spend $9 for everybody who flies in an 
airplane, like I did coming in here; we spent a cent in terms 
of transit riders.
    And when we look at that $600 million that is overall in 
terms of security grants to cover all the critical 
infrastructure, and we hear what the Coast Guard is saying is 
necessary just for the security of our ports, I look at it, and 
I say after Madrid, after London, how much of a wakeup call do 
we need?
    That is a concern that we have. I know that we are 
constrained, but there are certain questions of priorities and 
values, security being the number one thing the Federal 
Government does on behalf of its citizens. So, I hope we are 
going to have a more robust effort in the days ahead. Clearly, 
the $42.5 million is nowhere near what we need to do to protect 
the Nation's public transportation system.
    Thank you, Mr. Chairman.
    Chairman Shelby. Thank you.
    Thank you, Madam Administrator. We look forward to working 
with you. They have propounded, the Members have a number of 
questions to you, and I hope you will be diligent in answering 
those.
    Ms. Bushue. Absolutely, sir, I will.
    Chairman Shelby. And I hope you will also follow up on 
Senator Sarbanes' request to get those cars.
    Ms. Bushue. Will do, sir.
    Thank you, Mr. Chairman.
    Chairman Shelby. Thank you very much.
    Chairman Shelby. Our second panel is Patrick McCrory, the 
Mayor of Charlotte, North Carolina. He is testifying on behalf 
of the United States Conference of Mayors; William Millar, 
President, American Public Transportation System. Gentlemen?
    Thank you, Mayor, Mr. Millar. Senator Sarbanes has to go to 
another Committee. He wants to make a statement.
    Senator Sarbanes. Mr. Chairman, yes, I regret very much 
that I am not going to be able to stay for this panel. I have, 
as so often happens here, competing obligations. But I did want 
to welcome both of our witnesses. Mayor McCrory has been here 
before. I particularly recall some very helpful testimony he 
gave to the Committee a few years ago on the importance of 
integrating transit into a community's long-term planning 
process. I want you to know, Mayor, that was extremely helpful. 
We referred back to that testimony from time to time.
    Mr. McCrory. Thank you very much.
    Senator Sarbanes. So thank you very much.
    And Bill Millar, I do not know that there is a more 
articulate or effective advocate for transit in the country, 
and he was with us all through that reauthorization process, 
and we are extremely appreciative to him for his very positive 
contributions, and I apologize to both of our witnesses that--I 
mean, I have your statements, and I obviously will read them 
very carefully.
    Mr. Millar. Thank you.
    Chairman Shelby. Thank you, Senator.
    Mayor, you and Mr. Millar's testimony will be made part of 
the record. If you will just briefly sum up your remarks.

                STATEMENT OF PATRICK L. McCRORY

                MAYOR, CHARLOTTE, NORTH CAROLINA

                          ON BEHALF OF

             THE UNITED STATES CONFERENCE OF MAYORS

    Mr. McCrory. That would be fine. In fact, I am going to, 
instead of reading the statement, I am going to talk from the 
heart.
    Chairman Shelby. Absolutely.
    Mr. McCrory. I have some comments I wrote on the envelope 
on the way here in the airplane.
    Let me first thank you, Mr. Chairman, for your past work 
and the Committee's recommendations. I would also like to thank 
FTA. They have been a good partner in working with them and 
their staff, especially the previous Administrator Dorn, and I 
look forward to working with the new administrator also. Also, 
it is an honor to be Mayor of the City of Charlotte, a great 
suburb of Shelby, North Carolina.
    [Laughter.]
    Chairman Shelby. A little larger than Shelby, I think.
    Mr. McCrory. Just a tad. We follow your lead all the time, 
though.
    Let me first say I also speak on behalf of the U.S. 
Conference of Mayors, where I have been Chairman of the 
Environmental Committee for the past 6 to 7 years, and on 
behalf of all the mayors, I just want to stress to you the 
importance of mass transit in all of our cities. Our employers 
are demanding it as they look at their long-term plans for 
whatever city they are going to invest in the future.
    And their primary concern is how am I going to get people 
to and from work and around the congestion? And if I cannot get 
them to and from work in a reasonable amount of time with many 
choices, we are going to move elsewhere. And so, it is 
extremely important for not only cities in North Carolina, and 
I am glad to see Senator Dole's staff here also; it is great to 
see you all here, but also cities throughout the United States.
    I also want to say it is very important to us from an 
environmental standpoint, from an economic development 
standpoint, and just preparing not just plans for transit but 
housing, brownfields, economic development; it has to be part 
of a comprehensive plan, which I appreciate the Senator 
mentioning earlier.
    In Charlotte, by the way, we do have, we continue the 
implementation of our 25-year plan. We appreciate your full 
funding grant agreement. We hope to implement our 10-mile line 
in the fall of next year. We are on budget; we are on time, 
although we are having to make some major adjustments due to 
the cost escalations, but we just have to adjust, and we are 
doing the best job we can.
    I do want to get quickly to the issues in the limited 
amount of time that we have. I would like to speak on behalf of 
the Mayors and for the City of Charlotte. We totally agree with 
you regarding the Small Starts programs. In fact, if anything, 
I anticipate cities and towns throughout the United States 
wanting more of the Small Starts programs, not less.
    In fact, there is already becoming a backlog of these 
programs. And what is happening right now is we are seeing the 
Small Starts programs are going to be more effective. It has 
the potential to just be an excellent program, because it is 
more flexible; you can finish in a timely manner; you can show 
the results, and we also think they cost less money.
    And we are also seeing the more larger New Start projects 
dealing with major budget implications because of the inflation 
we are seeing in construction costs, cement and steel and other 
matters. Also, I compare it to highway funding, where a lot of 
times, my highway funding, road funding, I want to improve an 
intersection before building a new highway. And this is very 
similar to intersection improvement or right-of-way 
improvement, which will try to increase the flow of traffic and 
reduce congestion, and that is our goal.
    The second thing I want to state is that we really want to 
emphasize for the Small Starts program is that the bureaucracy 
has to be lessened. You cannot treat it as New Start lite. If 
we treat this where you have to go through so many bureaucratic 
steps to get it implemented, it is just going to add to the 
cost and the time, and it is going to become like a New Start 
program. The advantage of the Small Start is to save money. It 
is the flexibility; it is the implementation, and it is getting 
it on time.
    So, I would like us to review the process in which we 
implement those, and maybe that would then help implement 
getting the money that you originally budgeted, too, if we cut 
out some of the bureaucratic steps.
    I also want to state, as a Mayor, and I think all Mayors 
agree with me, in Charlotte, we are only going to recommend, 
whether it be a New Start program or a Small Start program, 
programs that make sense financially, make sense to ridership, 
make sense to economic development. We are not going to submit 
programs that are pie in the sky, because in the long run, I 
have to pay for it; you have to pay for it; and it makes no 
sense, and I make that commitment on behalf of all mayors.
    The last thing I want to talk about is this, is that we 
cannot deemphasize land use and economic development. You have 
in your bill and in statute right now an emphasis on economic 
development and land use, and right now, we want to emphasize 
the need to make sure that FTA also emphasizes that as a 
priority, not as a subset, because I am convinced--I am a 
Republican mayor. If you do not have the right land use; if you 
do not have economic development as part of the plan, we are 
wasting our money.
    It has to be implemented as part of a total package, and in 
the long-run, Mr. Chairman, that will save us money in 
infrastructure costs and water and sewer, infrastructure costs 
in roads, and infrastructure costs in future transit monies.
    And my time is up, and I would love to spend more time with 
you, but I am here to answer any questions you might have.
    Chairman Shelby. Thank you, Mayor McCrory.
    Mr. McCrory. Thank you, Mr. Chairman.
    Chairman Shelby. Mr. Millar, welcome to the Committee.

            STATEMENT OF WILLIAM MILLAR, PRESIDENT,

           AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

    Mr. Millar. Mr. Chairman, thank you very much, sir, and it 
is a pleasure to be back in front of the Committee, and I 
appreciate your and Senator Sarbanes' kind comments. We always 
get a good welcome here, and we appreciate that very much.
    Again, I want to thank you as I have on so many other 
occasions. You have been and are a great leader of this 
Committee. We are so appreciative of the way you have worked 
through all of the issues in SAFETEA-LU, and we are now moving 
to play our part in implementing that program. And on behalf of 
my 1,600 members all across the country, we really do 
appreciate it.
    It is also a great pleasure to be here with one of the 
great urban leaders in America, Mayor McCrory, and we have been 
to Charlotte and seen the great work that he and his colleagues 
are doing there.
    Mr. Menendez, I am so pleased to be with you on this side 
of the Hill, and we appreciate particularly your concern for 
transit and the terrorism issue, which I will be discussing 
momentarily.
    I really have three issues that I want to address briefly 
here. The first is the Small Starts program. I think I will 
shorten up my comments there, because I think the Committee has 
a good understanding of our concerns. The second relates to 
security issues; and then, finally, I want to pick up on some 
issues that Mr. Carper raised relating to commuter rail fees in 
the Northeast Corridor.
    With regard to Small Starts, I certainly agree with all the 
statements that the Senators made and you made, in particular, 
Mr. Chairman; It is incomprehensible that the President could 
sign a law 6 months ago with tremendous need and then turn 
around and cut the program in half as we get started. I am sure 
the Committee is aware this is not the first Small Starts 
program. There used to be a smaller New Starts program, but it 
had a $25 million cap, and there are many projects lined up 
that were already in line for the old program that could easily 
be funded by the new program, could quite properly use at least 
$200 million worth of investment, and we would certainly 
encourage the Administration to consider that as well.
    Also, we very much appreciate the Committee's concern about 
the careful balance between highways and transit. As I have 
testified, we certainly understand the importance of highways, 
as we do transit, but that was a carefully crafted bill, and 
the effect of the Administration, whether they intended it or 
not, was to thwart the Congressional intent in that regard. So 
we certainly hope that the Administration will listen carefully 
to what you all told them, and we certainly stand ready to work 
with you and the Committee in that regard.
    The other irony of cutting Small Starts is that critics of 
the public transit program for decades have said we need to 
learn to do things cheaper and quicker, and this program is 
designed to do both that, and yet, it is the one program they 
choose to cut.
    With regard to transit security, and perhaps I can 
embellish on some of the answers that were given to you 
previously, Senator, we continue to be concerned about the lack 
of attention on transit security by the Administration. We are 
most appreciative of the work of this Committee in acting on 
Senate Bill 2032 that would establish a 3-year, $3.5 billion 
program. We are very hopeful that the full Senate will take 
that up, and we are very hopeful that the House will have 
companion legislation as well.
    We particularly appreciate your leadership and that of Mr. 
Sarbanes last summer during the appropriations and budget 
fights where you tried to raise dramatically the amount of 
investment in public transit security. As you know from 
personal experience in London, as I understand it, these 
terrorist acts can occur anywhere, anytime and we need to take 
reasonable steps to move forward to secure our transit systems.
    The Deputy Administrator is correct. The primary 
responsibility is over at the Department of Homeland Security, 
and we do appreciate that FTA has been as supportive as they 
can be given where the primary responsibility lies, but Mr. 
Menendez, you are quite correct: $600 million to do transit, to 
do ports, to do all the other infrastructures that are intended 
is nowhere near enough.
    In the current fiscal year, the Department of Homeland 
Security is yet to decide how they will divide up between 
transit and the other infrastructures. In the 2005 year, they 
provided about $130 million of the $150 million for public 
transit. So we continue to be concerned that not only when 
Congress has acted, the Administration is slow to allocate the 
money, and that is a very important concern for us.
    A final issue I wish to discuss very briefly is the one 
that Senator Carper raised, and that relates to the taxation is 
the word I will use of commuter rail users in the Northeast 
Corridor to help fund Amtrak. We certainly all understand the 
importance of having good intercity rail transit, but commuter 
rail properties in the Northeast Corridor have negotiated with 
Amtrak over the years the proper balance between what costs 
those commuter rail operators impose in the corridor and what 
they should pay, and now, to come along and just out of the 
blue say that they should pay at least $59 million more makes 
no sense.
    Over 800,000 commuters a day use the Northeast Corridor for 
commuter rail. Only a few thousand use Amtrak. There has to be 
a better way. The Congress called for an open process to 
determine this. So far, we have not seen any evidence of that 
open process.
    Thank you, Mr. Chairman. I would be happy to expand on 
these points as you might wish.
    Chairman Shelby. Thank you.
    My first question is to Mayor McCrory. In June of last 
year, Mayor, you will recall the U.S. Conference of Mayors 
Working Group on Transportation sent a letter to the House and 
the Senate conferees of the transportation bill urging us to 
maintain an 80/20 highway and transit split. Why is this parity 
important to mayors?
    Mr. McCrory. Well, it shows a commitment to a dual 
transportation system. And if you visit any city, you cannot 
live on one transportation mode alone. And if you do not 
reserve a certain percentage for one versus another and have 
that guaranteed percentage, you know it will constantly dwindle 
away.
    And I think there is a very strong feeling among mayors, 
you have to have choice among transportation. You have to have 
both highways, but you also have to have mass transit. And that 
seems to be a very fair and consistent formula that has stayed 
in place for a pretty long time, and we need to continue that.
    Chairman Shelby. Mayor, you are the mayor of a fast growing 
city, the second largest financial center in the United States 
is my understanding from being here on the Banking Committee.
    Mr. McCrory. That is correct.
    Chairman Shelby. You have drawn on Federal funds to address 
growing congestion in the Charlotte area. If the $100 million 
cut in the Small Starts program were to stand, how would 
smaller communities wishing to build smaller, cost-effective 
projects be impacted?
    Mr. McCrory. I think you are going to first of all have 
very few projects using $100 million. I mean, that could be 5 
or 6 at most projects, 7 projects.
    Chairman Shelby. It would wipe out most of the----
    Mr. McCrory. Yes; in fact, Charlotte alone has two projects 
that they would like to submit, which are excellent projects. 
So just looking at ourselves is one, 17th largest city; we 
would take two of the projects if we got what we wanted.
    And again, in the long-run, I think these projects are the 
types of projects that cities and towns throughout the United 
States are going to direct a lot of the resources to, because 
you see immediate results, and the cost-effectiveness is very 
good.
    Chairman Shelby. What is the approximate population of the 
metropolitan area now in Charlotte?
    Mr. McCrory. It is about 1.5 million now, and our city 
population is 615,000 people.
    Chairman Shelby. So 1.5 million in the metropolitan----
    Mr. McCrory. That is correct.
    Chairman Shelby. And growing, right?
    Mr. McCrory. And it is one of the fastest growing areas in 
the Nation. And, you know, we have a choice. We can either 
prepare for that growth or react to it 20 years from now, and 
we will find out reacting to it is much more expensive.
    Chairman Shelby. Very much.
    Mr. Millar, you spent a lot of time in your written 
testimony and in your comments sharing APTA's concerns about 
the Administration's effort to have commuter rail authorities 
pay additional costs for their usage of Amtrak-owned Northeast 
Corridor. I understand that among other issues, that your 
association is concerned about how the costs are to be 
calculated and how existing contracts for usage in the 
Northeast Corridor would be treated.
    Are you also concerned that Amtrak may wish to assuage 
their own serious financial woes by tapping into the limited 
funds made available in the mass transit account at some time 
in the future?
    Mr. Millar. Yes, sir, that is a concern. My association has 
a longstanding policy. We are in favor of intercity rail 
transportation, but we do not believe that the limited amount 
of funding that is available for public transit use in the Mass 
Transit Account, which it does not even cover those costs of, 
let alone trying to expand the Mass Transit Account to cover 
intercity rail and bus as well.
    So it is very much a concern, as is the concern that 
somehow, the Federal Transit Administration can just routinely 
deduct money from grants that are going to be used for other 
purposes and redirect it in different ways. We think that is 
wrong as well, sir.
    Chairman Shelby. What should the Department of 
Transportation and the Department of Homeland Security be doing 
to address the transit security needs in this country that we 
have worked together on?
    Mr. Millar. Yes, sir. First and foremost, DHS needs to 
admit that there is a big problem and that it takes resources, 
Federal resources in partnership with State and local 
resources, to improve the situation with regard to security on 
our public transit systems. As I have testified here before, we 
have spent over $18 billion on the aviation system; about $250 
million on the public transit system. Yet, every day, 16 times 
more people use local public transit than use the air network.
    Now, we do not begrudge the air network. They need to be 
secure. But we need to get serious. We need money for planned 
drilling, for training, for new equipment, for the application 
of new technology that could make our systems that much safer, 
for new communications systems; the list goes on and on and on, 
and I do not understand why that is so difficult for the 
Department of Homeland Security to understand.
    Chairman Shelby. I share a lot of views on that, as you 
know.
    Mr. Millar. Thank you, sir.
    Chairman Shelby. Gentlemen, I appreciate your patience here 
this morning in waiting and your views here before the 
Committee. The Committee will take those into consideration as 
we always do and work together.
    The hearing is adjourned.
    [Whereupon, at 11:59 a.m., the hearing was adjourned.]
    [Prepared statements and response to written questions 
supplied for the record follow:]
             PREPARED STATEMENT OF SENATOR ROBERT MENENDEZ
    Thank you very much, Mr. Chairman, and I would like to start off by 
saying how pleased I am to be here for the first hearing on public 
transportation since I joined the Committee. As you may know, I served 
for 13 years in the House on the Transportation and Infrastructure 
Committee, and I represent a densely packed state that has the second 
highest percentage of transit ridership in the country, so this is an 
issue that is very close to New Jersey's heart, and to my own.
    Just last weekend, I had the honor of helping to open two new 
stations on the Hudson-Bergen Light Rail system, including one in my 
old home of Union City, where, as mayor, I helped to start the planning 
process for this project many years ago. This light rail system has 
been a textbook example of the power of public transportation to 
revitalize communities. It has been an economic engine that fueled new 
businesses, created new jobs, and brought people back to our 
waterfront. It helps to clean our air and make commutes easier for 
people in Hudson County and around the region, allowing them to spend 
more quality time at home with their families and less stuck in 
traffic. There are few things we do in government that can bring all of 
these things together, and I am tremendously proud at having helped to 
make the Hudson-Bergen Light Rail a reality.
    I am also very proud of the work that we did last year on the 
transportation bill, which I helped to negotiate as part of the House 
delegation of the conference committee. In particular, I am proud of 
the large increases in transit funding that the bill contained, and I 
know that much of that was due to the hard work of this committee, and 
I commend the Chairman and Ranking Member for their leadership in 
ensuring that transit will see record levels of funding in the coming 
years. I would also like to extend my sincere gratitude to them for 
working with Senator Corzine to make sure that we got a number of 
provisions in the bill that are very important for New Jersey, 
including some language that will help facilitate the construction of a 
new trans-Hudson tunnel.
    We have already reached the practical capacity of the existing 2-
track tunnel, with well over 42,000 people arriving on 186 trains 
between 6 and 10 AM. Meanwhile, more and more people are moving from 
New York to New Jersey to live, while maintaining jobs in Manhattan. 
The last Census found that the New York to New Jersey net migration was 
the third highest State-to-State migration in the country. In order to 
keep up with this influx of new residents, and to make sure that people 
can get to jobs on both sides of the river, we desperately need to 
build a new tunnel under the Hudson River, and we need to do it 
quickly. In SAFETEA-LU, there is language expediting the entry of the 
project into the Preliminary Engineering portion of the New Starts 
process, and I hope to hear from the Deputy Administrator about FTA's 
timetable for getting this project to that next step.
    In general, I am very pleased with this transit budget, although I 
join many of my colleagues on the Committee in expressing some concern 
about the fact that the Small Starts program was cut by $100 million. 
As I mentioned, I know how important these types of projects can be for 
communities, and I think it is unfortunate that we are seeing these 
cuts proposed before this program even has a chance to get off the 
ground.
    There are other transit issues in the overall budget that I am also 
very concerned about, even though not all fall under FTA's 
jurisdiction. First of all, the Administration has proposed to once 
again slash Amtrak's budget below the level that would allow it to 
avoid bankruptcy. If Amtrak were to go bankrupt, nearly 100,000 New 
Jersey commuters would be stranded each day because they depend on New 
Jersey Transit trains that use the Northeast Corridor. So, I can not 
let that happen. Also, there is a provision in the fiscal year 2006 
appropriations for the Federal Railroad Administration that could 
result in commuter agencies having to pay Amtrak considerably higher 
fees for use of the Northeast Corridor. New Jersey Transit already pays 
Amtrak $120 million each year, and a very murky process is just 
beginning where they could end up being forced to pay an extra $10 to 
$20 million, and it is not clear that they will be fully informed about 
how those fees are calculated. Nor is it clear if their existing 
contributions will be fully credited. And, in the end, the real loser 
in this process will be the commuters of New Jersey, who would probably 
be forced to endure service cuts as a result of the higher fees.
    I am also very concerned about the level of funding in the budget 
for transit security. This is, unfortunately, part of a pattern from 
this Administration. As I have known for a long time, but is now 
becoming clear to the rest of the country through the recent debate 
over port security, the Administration has simply not taken substantial 
enough steps to protect the security of our critical infrastructure 
assets, whether we are talking about ports, chemical plants, or public 
transit passengers. We have plenty of all of those in New Jersey, and 
it is extremely important to me to make sure this country commits the 
necessary resources to protect them. And yet, it appears that once 
again transit security will get neglected, despite the lessons of 
Madrid in 2004 and London in 2005. The Federal Government spends over 
$9 in security for each flying passenger, but less than one cent for 
the security of each person on a transit bus or train. If we do not 
take serious action now, I am afraid that we will be doing it in the 
aftermath of another deadly attack on our own soil.
                               ----------
                  PREPARED STATEMENT OF SANDRA BUSHUE
          Deputy Administrator, Federal Transit Administration
                   U.S. Department of Transportation
                           February 28, 2006

    Thank you, Mr. Chairman, for the opportunity to testify today on 
the Federal Transit Administration's fiscal year 2007 budget request. 
We appreciate your continued interest and strong commitment to public 
transportation as embodied in the Safe, Accountable, Flexible, 
Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) 
enacted by Congress and signed by the President on August 10, 2005.
    I am pleased to report to the Committee that the President's fiscal 
year 2007 budget for transit is a record $8.9 billion. This is a 
significant commitment given the overall context of the President's 
fiscal year 2007 budget. At a time when most non-security related 
domestic programs are experiencing reductions in their funding levels 
and when the Department of Transportation's total budget is holding 
steady, funding for transit in this budget grows by more than 4 percent 
or $370 million above the fiscal year 2006 level. This shows the high 
priority this Administration puts on funding public transportation 
among many competing national priorities.
Top Fiscal Year 2007 Priorities
    Since my recent arrival, I have been impressed with the energy and 
dedication of FTA's staff. Thus I want to take this opportunity to 
focus on FTA's top priorities. They include:

 Effective and timely implementation of SAFETEA-LU;
 Effective management and oversight of almost $8.9 billion in 
    formula and capital investment grants, especially New Starts full 
    funding grant agreements;
 Improved coordination of human services transportation for 
    disabled persons, older adults and individuals with lower incomes;
 Continued work with the Department of Homeland Security to 
    strengthen transit security, including training, emergency 
    preparedness, and public awareness;
 Use of performance information and program assessments to 
    better manage risk and drive agency results; and
 Attracting and retaining the best workforce with the skill-set 
    to meet the challenges facing the agency.
SAFETEA-LU Implementation
    SAFETEA-LU authorizes a total of $45.3 billion in guaranteed 
funding for Federal transit programs over the 5-year period fiscal 
years 2005-2009, an increase of 46 percent over TEA-21 funding. In 
addition to historic funding levels, SAFETEA-LU added new programs such 
as New Freedom and Alternative Transportation in the Parks and Public 
Lands that began in fiscal year 2006, and modified other programs. 
SAFETEA-LU also required that FTA promulgate about a dozen new 
regulations for joint planning requirements, New Starts (including the 
Small Starts program), Buy America, Charter Bus, and a joint rulemaking 
on security with the Department of Homeland Security.
    Since the President signed SAFETEA-LU in August 2005, FTA has 
worked diligently to implement the many changes and requirements. FTA 
has demonstrated progress with an aggressive schedule to meet the 
requirements in SAFETEA-LU and facilitate program implementation. In 
the early months following enactment, FTA signed the Memorandum of 
Understanding Annex with the Department of Homeland Security, published 
interim fiscal year 2006 transit program guidance for public comment, 
and initiated a communications and outreach strategy that included 
publishing informational materials on its website and hosting several 
dozen listening sessions to solicit public and industry input on its 
program proposals.
    Since January, FTA has worked to publish for public comment in the 
Federal Register New Starts Policy Guidance, an Advance Notice of 
Proposed Rulemaking on the Small Starts program, and a Notice of 
Proposed Rulemaking on Buy America. FTA will continue its aggressive 
implementation of SAFETEA-LU and will hold additional listening and 
outreach sessions to obtain public input for agency consideration as it 
develops circulars and guidance for official comment.
Fiscal Year 2007 Budget Request
    Now, I would like to touch on some of the highlights of the 
President's fiscal year 2007 budget for the FTA. The budget reflects 
the Administration's commitment to public transportation as envisioned 
in SAFETEA-LU.
Urbanized Area Programs
    In fiscal year 2007, $7.3 billion is requested in a solely trust-
funded account for Formula and Bus Grants. This includes $3.9 billion 
for the Urbanized Area Formula Grants Program, including Growing States 
and High Density States and $1.4 billion for the Fixed Guideway 
Modernization Program to ensure that the Nation's older fixed guideway 
systems continue to meet the transportation needs of the communities 
they serve.
    Formula Grants funding can be used for all capital transit purposes 
and, in areas under 200,000 in population, for operating assistance. 
Eligible capital expenses include: Planning, bus, van, railcar, 
intelligent transportation systems (ITS), and equipment purchases; 
facility repair and construction, new technology introduction, and 
preventive maintenance. These funds help public transit agencies reduce 
congestion, ensure basic mobility, promote economically vital 
communities, and meet the requirements of the Americans with 
Disabilities Act (ADA) and the Clean Air Act (CAA).
Bus and Bus-Facilities
    FTA requests $856 million for bus and bus-related capital projects 
that enhance the efficiency and safety of the Nation's bus systems. In 
fiscal year 2007, FTA is proposing a clean fuels and electric drive bus 
deployment (hybrid-electric) program to encourage and provide 
incentives to transit agencies to procure low emission technology 
buses, including hybrid electric buses. The FTA hybrid-electric program 
will develop a comprehensive approach to addressing existing barriers 
and challenges to the adoption and deployment of new low emission 
technology by a greater number of the Nation's transit agencies.
State Administered Grants
    The important goal of improving mobility for the elderly, persons 
with disabilities, and individuals with low incomes requires more 
flexibility and fewer funding constraints on communities. FTA's budget 
requests $809 million for several transit programs administered 
primarily by States. For the Nonurbanized Area Formula program, $467 
million may be used to support intercity bus service as well as to help 
meet rural and small urban areas' transit needs and includes funding 
for the new Growing States program. A total of $117 million in formula 
grants for the Elderly and Individuals with Disabilities program will 
be apportioned to each State according to a legislatively required 
formula to assist in providing transportation to the elderly and 
individuals with disabilities. The budget includes $144 million for the 
Job Access and Reverse Commute program apportioned to States by formula 
for grants to nonprofit organizations and local transit agencies to 
support transportation services for welfare recipients and low-income 
individuals. Funding for the New Freedom program totals $81 million and 
will provide additional support to overcome the significant 
transportation barriers facing millions of Americans with disabilities 
seeking access to jobs and integration into the workforce.
Metropolitan and Statewide Planning
    In fiscal year 2007, FTA requests a total of $99 million for 
Metropolitan and Statewide Planning. Funding will support 
implementation of the expanded analytic, environmental, transportation 
air-quality conformity, and evaluative work necessary to ensure that 
Federal and other transportation investments are cost-effective. 
Metropolitan Planning Organizations (MPOs) and State departments of 
transportation use these funds for planning activities that support 
over $8 billion in annual capital transit projects located in all 50 
States, Puerto Rico, and the District of Columbia. These funds also 
support planning activities for FTA capital grants that will be made to 
rural transit operators and tribal governments. Both the FTA and the 
Federal Highway Administration (FHWA) carry out statutory planning 
requirements through Metropolitan Planning Organizations, State DOTs, 
and transit operators as a condition of Federal assistance for most 
mass transportation and highway projects.
Alternative Transportation in Parks and Public Lands
    For fiscal year 2007, $23 million is requested to enhance the 
protection of America's national parks and public lands by improving 
the experience of those visiting our national parks, while ensuring 
transportation access and mobility for all visitors, including 
individuals with disabilities. FTA is working with the Department of 
the Interior and the U.S. Forest Service to implement this new program. 
Investment in alternative transportation solutions in our national 
parks and public lands has many benefits, such as relieving traffic 
congestion and parking shortages, enhancing visitor mobility, 
accessibility, and safety, enhancing mobility and safety for local 
residents, conserving sensitive natural, cultural, and historic 
resources, and reducing pollution.
Clean Fuels Grant Program
    The Clean Fuels Grant program is requested at $45 million to 
provide financing for the purchase or lease of clean fuel buses and 
facilities and the improvement of existing facilities to accommodate 
these buses. This includes buses powered by compressed natural gas, 
biodiesel fuels, batteries, alcohol-based fuels, hybrid electric 
technology, fuel cell and certain clean diesel fuels (up to 2 percent 
of grants annually), and other low or zero emissions technology.
Major Capital Investments
    The budget requests almost $1.5 billion for the New Starts program. 
New Starts projects help improve mobility, reduce congestion and 
pollution, and promote new economic activity throughout the Nation. The 
$1.5 billion fully funds the Federal commitment included in 16 existing 
full funding grant agreements (FFGAs) with transit agencies. Funding 
also supports two FFGAs that we expect to sign before the end of fiscal 
year 2006, one in Pittsburgh and one in New York City.
    I am also pleased that five new projects have made it to the New 
Starts finish line and are ready for FFGAs. These projects include 
three light rail transit projects in Denver, Portland, and Dallas. In 
addition, commuter rail projects in Washington County, Oregon, and Salt 
Lake City, Utah, are also ready for FFGAs.
    I want to share with the committee our plans for implementing the 
new ``Small Starts'' program in fiscal year 2007. This program will 
provide Federal Small Starts funding up to $75 million for projects 
under $250 million in total cost. We are very excited about this new 
program. It is a program we recommended to Congress because it levels 
the playing field for medium and small communities.
    We know from several listening sessions we have held that 
communities across the country are interested in this new program and 
how it will work. Last month, we published in the Federal Register, for 
public comment, an Advance Notice of Proposed Rulemaking on the 
evaluation criteria and other requirements. Final regulations are not 
expected until June 2007. Given all the work ahead of us and the strong 
interest by communities to help develop the program requirements, we 
believe that $100 million will provide a sound first investment for a 
program we are committed to implement during fiscal year 2007.
Project Oversight
    FTA remains committed to ensuring the completion of New Starts 
projects on time and on budget. Our successful oversight program works 
with transit agencies to identify potential problems before they grow 
into major crises. The DOT Inspector General has reported that FTA's 
oversight program is ``essentially a sound approach that can provide 
early warnings of cost, schedule, and quality problems.''
    One tool we use to help ensure that projects meet their cost, 
schedule, and transportation benefit expectations is a quantitative 
risk assessment. These risk assessments help project sponsors identify 
the issues that could affect schedule or cost, as well as the 
probability that they will do so. Utilizing the risk assessment tool, 
every project sponsor is required to: Identify the project's key cost 
drivers; identify, quantify, and prioritize based on impact and 
probability the risks associated with potential cost increases and 
schedule delays; and develop contingency levels and risk mitigation 
plans sufficient to assure confidence in the project cost estimates.
Research and University Research Centers
    In 2007, $61 million is requested for the National Research and 
Technology program, Transit Cooperative Research Program, the National 
Transit Institute and University Research Centers. Of this amount, $40 
million is requested for the National Research and Technology program. 
These funds support the goals of FTA's Strategic Transit Research Plan 
developed in consultation with the transit industry. The budget 
includes $9.3 million for the Transit Cooperative Research Program 
(TCRP), which focuses on issues significant to the transit industry. 
The budget requests $4.3 million for the National Transit Institute 
(NTI) and $7 million for University Research Centers that provide 
continued support for research, education, and technology transfer 
activities aimed at addressing regional and national transportation 
problems.
Administrative Expenses
    FTA is requesting $85 million in administrative expenses to help 
ensure it can effectively and efficiently fulfill its mission. This 
request supports 14 additional full time equivalent (FTE) personnel for 
a total of 531 FTEs, information technology, space management, travel, 
training, and other related administrative expenses.
    New requirements and program changes must be supported with higher 
staffing levels if FTA is to be effective and timely in implementing 
SAFETEA-LU. The law creates a number of new programs such as Small 
Starts, Transit in the Parks, and New Freedom, and requires that 
regulations be developed and published in the Federal Register for New 
Starts, Buy America, security, and Charter Bus. In addition, 
significant outreach efforts are needed in order to provide other 
Federal and State agencies, public transit agencies, the transit 
industry and the transit riding public with information on changes in 
statute, policies and procedures, guidance, and technical assistance.
Transit Security
    The security of our public transportation system remains a high 
priority of this Administration and the Department and our budget 
includes $42 million to support security, within which is the 1 percent 
set aside from urban formula grants to fund public transportation 
security projects. Transit agencies across America have strengthened 
their security systems and enhanced their emergency response plans, and 
FTA has placed a high priority on increasing the security of our public 
transportation systems and ensuring that they are prepared for security 
threats and emergency situations.
    Working with the Department of Homeland Security, FTA has 
identified three priority areas with regard to security: (1) Training 
transit employees to deter, detect, mitigate, and respond to a variety 
of emergency scenarios; (2) ensuring local agencies have emergency 
plans in place and routinely practice them; and, (3) increasing public 
awareness, so that passengers can identify suspicious or unusual 
behavior, communicate with transit officials, and exit safely in the 
event of an emergency.
Enhanced Coordination of Human Service Transportation
    In response to the recommendations of the President's Council on 
Access and Mobility, and in accordance with the President's Executive 
Order 13330, FTA implemented United We Ride, a five-part nationwide 
initiative to improve transportation services for people with 
disabilities, individuals with low incomes, and older adults. The 
initiative to improve the coordination of human services transportation 
includes: (1) Publication of ``A Framework for Action''--a self-
assessment tool that States and communities can use to identify areas 
of success and the actions still needed to improve the coordination of 
human service transportation; (2) recognition of leadership--in 
February 2004, Secretary Mineta recognized five States--Ohio, North 
Carolina, Washington, Florida, and Maryland that are leading the way in 
building and implementing infrastructures, policies and programs that 
facilitate human service transportation coordination; (3) holding a 
national Leadership Forum--Governor-appointed senior leadership teams 
from 47 States and U.S. territories met to raise the visibility of the 
need to improve human service transportation coordination among State 
leaders, provide technical assistance, and secure commitments to 
action; (4) providing grants--$1.5 million to address gaps and needs 
related to human service transportation in their geographic regions; 
and (5) providing technical assistance--``Help Along the Way'' was 
launched that built on the work of the Community Transportation 
Assistance Program, the Rural Transportation Assistance Program, and 
Easter Seals Project ACTION.
    Mr. Chairman, we look forward to working with this Committee in 
support of public transportation in our great country. Thank you again 
for the opportunity to testify on the fiscal year 2007 budget request 
and other issues important to us. I would be happy to respond to 
questions from the Committee.
                                 ______
                                 
                PREPARED STATEMENT OF PATRICK L. McCRORY
                Mayor, City of Charlotte, North Carolina
               on behalf of the U.S. Conference of Mayors
                           February 28, 2006

    Chairman Shelby and Members of the Committee. My name is Patrick 
McCrory and I am pleased to speak with you today as the Mayor of the 
City of Charlotte, North Carolina and to share with you my perspective 
of the President's fiscal year 2006 budget, as it relates to the 
Federal Transit Administration.
    I would also like to extend greetings to you from The U.S. 
Conference of Mayors, as I serve on that organization's Executive 
Committee through my role as the Chair of the Conference's Environment 
Committee.
    I would like to begin my remarks today by commending Congress for 
reauthorizing the Safe, Accountable, Flexible, Efficient, 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Your 
demonstrated commitment to invest in America's transportation 
infrastructure is invaluable and will continue to promote economic 
prosperity and will go a long way to address our overburdened 
transportation system. Most importantly, the act will live up to its 
name and truly leave a positive transportation legacy for users 
throughout America.
    I, like Mayors across the country, certainly welcome the Federal 
Government's partnership in transit and transportation issues. North 
Carolina is a donor State when it comes to gas tax usage for transit 
and transportation funding. Given this situation, I am pleased to know 
that President Bush has identified the importance of investing nearly 
$3 billion in ``New Starts'' and ``Small Starts'' in the Federal 
Transit Administration's budget for transit projects. These ``New 
Starts'' and ``Small Starts'' programs will go a long way to direct 
more money toward the Nation's rapid transit needs, such as light rail, 
street cars, and busways.
    In 1998, Charlotte and Mecklenburg County voters approved a half-
cent sales tax increase to establish a dedicated revenue stream to 
support the Charlotte-region's 2025 transit and land-use plan. This was 
a big leap of faith and a strong demonstration of support by Charlotte-
Mecklenburg voters, as this additional sales tax gave Mecklenburg 
County the distinction of having the highest sales tax rate in the 
State--and this is a city and region that faces stiff competition for 
commerce from our adjacent neighbor, the State of South Carolina.
    The pitch for establishing the dedicated transit revenue stream in 
Charlotte-Mecklenburg was an easy sell because of three factors--we 
presented a compelling vision in the 2025 transit and land-use plan, 
the State government agreed to be a funding partner and the Federal 
Government was identified as a partner through the Transportation 
Equity Act for the 21st Century (TEA-21) in 1998.
    Today, I am proud to sit before you and highlight that the first 
leg of a light rail line is under construction in the South Corridor, 
our first of five corridors to be developed under the 2025 plan. The 
10-mile South Corridor light rail line is slated to open in fall 2007 
and when it does, I will be able to cut that ribbon and proudly say it 
was all possible thanks to the Federal Government's commitment to pay 
nearly half of the project costs through our Full Funding Grant 
Agreement and through our partnership with the State of North Carolina 
and with the foresight of those voters who helped to pass the 
Charlotte-Mecklenburg transit half-cent sales tax.
    As the 19th largest city in the country by population, Charlotte is 
considered a tier-two city. Tier-two cities are those that have just 
begun to plan and implement transit projects in our communities as 
compared to the many U.S. cities that have had light rail, commuter 
rail, and other transit projects for decades.
    The importance of transit investment in the life of a city, 
particularly a tier-two city like Charlotte cannot be underestimated. 
This first generation development of transit in Charlotte is having a 
profound impact in attracting new investment to blighted areas such as 
the more than $400 million that has been invested in Charlotte's South 
End area in the way of new condominiums, mixed-use development, 
apartments, townhomes, and even hotels. And all of this is linked and 
generated by the anticipated opening of the South Corridor light rail 
line.
    Our transit development has not only galvanized our way of thinking 
about planning and transit-oriented development issues, but it has 
helped us to consider how we address commute patterns, environmental 
impact, pedestrian accessibility to even looking at even bigger 
concepts of livability, sustainability, and quality of life.
    Charlotte's transit and land-use plan is first and foremost a 
transportation plan that will address long-term congestion and air 
quality issues. Charlotte was ranked by the Texas Transportation 
Institute as the second-most congested second-tier city in the country. 
We view transit as a way to address our congestion and provide 
solutions to reduce vehicle miles traveled and redevelop brownfields 
instead of encouraging more urban sprawl to greenfields. We are 
developing mixed-use facilities and promoting transit-oriented 
development projects with high-density housing in conjunction with our 
park and ride lots and even putting a school playground and green space 
on top of a park and ride lot. The paradigm has changed in Charlotte on 
how we will grow and evolve as a dynamic sun-belt City.
    I am pleased to say the Federal Government and particularly the 
President's budget have played a large role in this positive shift in 
Charlotte and many other communities across the Nation. I must give a 
personal note of appreciation to Transportation Secretary Norm Mineta, 
past FTA Administrator Jenna Dorn, and FTA Deputy Administrator Sandra 
Bushue for their efforts to invest in Charlotte's 2025 Transit and 
Land-Use Plan. Their willingness to be flexible in addressing local 
needs while adhering to the standards and spirit of Congressional and 
Presidential funding directives is to be commended. The Federal 
Government's support of transit programs throughout the country is 
helping to develop a more balanced transportation system for America.
    While I am pleased with the funding level authorized for the FTA 
and its many programs, particularly the ``New Starts'' and ``Small 
Starts'' programs, I do want to offer some concerns and a cautionary 
note. The development of the ``Small Starts'' program for projects that 
will cost less than $250 million (or up to $75 million in Federal 
funds) is tremendously exciting and attractive for cities like 
Charlotte--and the ``Small Starts'' program is one I hope we can tap 
into. I worry that the reduction in the total level of funding to only 
$100 million nationally among all the Small Starts proposals will make 
it harder for the Federal Government to be a catalyst to help cities 
like Charlotte get transit programs established.
    While I think the ``Small Starts'' program is extremely positive 
and visionary, I would hate to see this innovative approach stymied by 
low funding and the pending rulemaking process that would squelch the 
flexibility and innovation designed in the ``Small Starts'' program. I 
am concerned that the FTA is considering requirements that will 
undermine Congressional intent to create a simplified and streamlined 
program that recognizes the lower risk associated with smaller transit 
projects. We need to make sure that the process of developing and 
evaluating Small Starts projects does not unnecessarily add time and 
costs.
    In addition, I am concerned about the approach that the FTA is 
proposing to take in ranking land-use and economic development issues 
when evaluating Small Starts projects. Cost effectiveness is important 
but it is only one aspect of what needs to be looked at. Land-use and 
economic development are very important to cities, particularly cities 
like Charlotte that are trying to change how they are developing and 
see the investment in transit as a critical tool in accomplishing this 
change. The FTA's proposal to treat land-use as a risk factor 
trivializes the importance of land-use impacts when evaluating transit 
investments. I would like to see the FTA treat land-use and economic 
development as factors equal in importance to cost effectiveness when 
evaluating both Small Starts and New Starts projects. I urge that the 
FTA create a process which allows this to occur.
    Finally, I would like to see the FTA strive to stabilize the 
requirements it expects transit project sponsors to adhere to in the 
development of fixed guideway transit projects. Over the past few 
years, we have seen a stream of new and revised requirements that 
project sponsors must comply with. When these requirements are 
continually changed the result is added time and increased project 
costs which can cause good projects to lose some of their 
attractiveness.
    In conclusion, I am pleased with the work that we have done in 
Charlotte to implement our 2025 Transit and Land-Use Plan and the 
partnership we have established with the Federal Government to make our 
plan a reality. I would like to offer you all an early invitation to 
join us for the ribbon cutting of our first light rail line in August 
2007.
    Mr. Chairman and Members of the Committee, I thank you for allowing 
me to address the Committee today and I thank you for your continued 
interest and support of the necessary funding to ensure America's 
transportation and transit programs continue to address our needs.
                                 ______
                                 
                  PREPARED STATEMENT OF WILLIAM MILLAR
         President, American Public Transportation Association
                           February 28, 2006

Introduction
    Mr. Chairman and Members of the Committee, on behalf of the 
American Public Transportation Association (APTA), we thank you for 
this opportunity to testify on the need for and benefits of investment 
in Federal Transit Administration (FTA) programs for fiscal year 2007.
About APTA
    APTA's more than 1,600 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 economic, energy conservation, 
environmental, and community goals.
    APTA member organizations include public 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 public transportation systems.
Overview
    Mr. Chairman, APTA's members deeply appreciate the work of this 
Committee throughout the development of the Safe, Accountable, 
Flexible, Efficient Transportation Equity Act: A Legacy for Users 
(SAFETEA-LU) which was enacted into law only last August 10. SAFETEA-LU 
incorporates the major goals that APTA set for the reauthorization 
process: grow the Federal transit program, preserve the funding 
guarantees and improve provisions that affect the program delivery. 
SAFETEA-LU provides a record level of Federal transit investment, $52.6 
billion over 6 years, an increase of 46 percent over the amount 
guaranteed in TEA 21. Again, our members very much appreciate and thank 
this Committee for its hard work and commitment to this important 
legislation. Now that the reauthorization process is behind us, APTA 
also appreciates this Committee's efforts to monitor the implementation 
of the law.
    At the outset, Mr. Chairman, I want to commend FTA for acting 
expeditiously in implementing rulemakings and other activities required 
by SAFETEA-LU. The new law calls for FTA to implement a significant 
number of programs, rulemakings, notices, and other measures, some with 
very short deadlines, and the agency has made every effort to do this 
in an open and transparent way. We very much appreciate the FTA's 
efforts in this regard, and look forward to continuing the good working 
relationship we have with the agency and its new leadership.
    Mr. Chairman, I want to focus today on three concerns we have with 
the Administration's fiscal year 2007 budget proposal.
    While we appreciate that the Administration's budget proposal 
adheres to the SAFETEA-LU transit program in most respects, it proposes 
to fund only $100 million of the $200 million authorized in fiscal year 
2007 for the Small Starts program that is meant to assist the 
development and construction of smaller fixed guideway projects such as 
streetcars, trolleys, commuter rail, and bus rapid transit systems.
    Mr. Chairman, we are also concerned that the Administration's 
budget fails to adequately fund transit security and efforts by transit 
agencies to better protect transit riders from terrorism.
    Finally, the President's budget proposal for the Federal Railroad 
Administration (FRA) proposes, as it did last year, that commuter 
railroad riders will assume a higher portion of maintenance and capital 
expenses on the Amtrak-owned portions of the Northeast Corridor. We are 
concerned that the unilateral imposition of these fees by the Federal 
Government will increase operating costs for these commuter railroads 
and will result in higher costs for commuter rail users and the State 
and local taxpayers who fund these systems.
New Starts/Small Starts
    Mr. Chairman, APTA is disappointed that the Administration has 
proposed to fund transit below the level so recently authorized and 
guaranteed by Congress. The Administration requested $100 million less 
than the amount authorized from the general fund for the New Starts 
program, proposing only half of the funding authorized for the new 
Small Starts program, a program to fund less costly fixed guideway 
projects such as light rail, commuter rail, and bus rapid transit 
systems.
    As this Committee knows, there is overwhelming demand for New 
Starts projects, and SAFETEA-LU authorized 387 projects. These new 
fixed guideway projects are an important part of meeting transit needs, 
but they each take a long time to develop and require a predictable 
funding commitment. Once appropriated for a fiscal year, New Starts 
program funding remains available for the two subsequent fiscal years. 
The effect of a funding cut will be felt disproportionately in future 
years by causing transit providers to fall further behind in the 
development of new less expensive projects due to the cuts that would 
be implemented under the Administration proposal, robbing communities 
of the congestion relief and environmental benefits associated with the 
projects.
    We want to make another point, Mr. Chairman. SAFETEA-LU 
restructured the general fund and Mass Transit Account (MTA) funding 
sources so that MTA outlays are now scored when they are actually spent 
rather than when they are appropriated. The good news is that MTA 
balances now are significantly higher than they would have been under 
the old scoring system. But it also means that the New Starts program 
is now funded exclusively from the general fund. Mr. Chairman, it is 
important to emphasize that this was done to improve the overall 
financing of the Federal transit program, and was not meant to create 
an opportunity for program cuts. That is why we fought so hard in 
support of the guarantees in SAFETEA-LU, and why this Committee worked 
so hard to retain them. We look forward to working with this Committee 
and others in support of fully funding the fiscal year 2007 Federal 
transit program.
Public Transportation and Energy Independence
    APTA is pleased that President Bush highlighted the need to focus 
on energy independence in his recent State of the Union address. The 
President said that ``keeping America competitive requires affordable 
energy . . . . America is addicted to oil, which is often imported from 
unstable parts of the world.'' He further stated that ``the best way to 
break this addiction is through technology.''
    We agree, Mr. President! We cannot think of a more important 
technology in that regard than fixed-guideway transit, including heavy 
and light rail, commuter rail, and bus rapid transit. This technology 
is readily available and many communities already have systems which 
can be expanded with more investment.
    The value of public transportation in this regard was quantified by 
economists Dr. Robert Shapiro and Dr. Kevin Hassett in their report: 
Conserving Energy and Preserving the Environment: The Role of Public 
Transportation. Among their findings:

 Public transportation saves more than 855 million gallons of 
    gasoline a year, or 45 million barrels of oil. These savings equal 
    about 1 month's oil imports from Saudi Arabia. In 2004, 9.6 billion 
    trips were taken on public transportation.
 If Americans used public transportation at the same rate as 
    Europeans--for roughly 10 percent of their daily travel needs--the 
    United States would reduce its dependence on imported oil by more 
    than 40 percent or nearly the amount of oil we import from Saudi 
    Arabia each year.

    Moreover, transit agencies are increasingly investing in 
alternative fuel buses to reduce dependence on oil. Almost 17 percent 
of fixed route buses now use alternative fuels and 20 percent of buses 
on order will use alternative fuels. Public transportation is clearly 
doing its part to promote energy independence through innovative 
technologies, and that is why we urge Congress to honor SAFETEA-LU and 
fully fund the transit program in fiscal year 2007.
Transit Security
    APTA commends and thanks this Committee for advancing legislation 
that would authorize $3.5 billion for transit security: The Public 
Transportation Terrorism Prevention Act (S. 2032). We particularly 
thank this Committee and its leadership for leading the effort last 
summer to increase transit security funding to $1.2 billion in the 
Department of Homeland Security (DHS) appropriations bill. Funding 
transit security is a clear Federal responsibility, and APTA is 
committed to working with the Bush Administration, this Committee and 
others to increase the level of funding for transit security. We look 
forward to working with the Committee in this critically important 
area.
    Mr. Chairman, APTA is concerned that the President's proposed 
fiscal year 2007 DHS budget for the Targeted Infrastructure Protection 
program, a security infrastructure program that includes public 
transportation, fails to provide sufficient investment for public 
transportation security.
    Like last year's proposal, the proposed $600 million funding for 
the Targeted Infrastructure Protection program, is for the protection 
of several critical infrastructures, including transit and ports. This 
amount of funding is insufficient to meet transit security needs, which 
are in excess of $6 billion, let alone other infrastructure needs. We 
are concerned not only about the level of funding, but also the 
uncertainty of how much will be allocated to transit security given 
that the program would fund a variety of security efforts in nontransit 
areas.
    APTA continues to press DHS and Congress for increased resources 
for public transportation security. While DHS has provided well over 
$18 billion for aviation security since September 11, to date only $250 
million has been allocated to transit. There are 32 million trips a day 
on transit compared to 2 million on aviation; terrorists have struck 
transit rail systems in Madrid and London. APTA has surveyed its 
membership and has identified some $6 billion in security needs--beyond 
basic infrastructure needs funded under SAFETEA-LU. Since September 11, 
transit systems have spent more than $2 billion of their own resources 
on transit security.
    Considering the attacks on the London Underground last summer, the 
time for limited investment in transit security has passed. Now is the 
time to propose transit security funding sufficient to protect the 
millions of people who use public transportation systems in the United 
States every day and to help strengthen the security of our Nation's 
transit infrastructure.
Northeast Corridor Commuter Rail Issues
    Turning to another issue in the proposed fiscal year 2007 budget, 
the Administration proposes that commuter railroads will assume a 
higher portion of capital and maintenance expenses on the Amtrak-owned 
portion of the Northeast Corridor. An amount of $59 million in fees on 
commuter railroads is assumed in each of fiscal year 2006 and 2007 to 
support Amtrak spending, even though we have seen little evidence of 
the ``open and transparent process'' which Congress called for in the 
fiscal year 2006 Transportation Appropriations to address this issue.
    The Northeast Corridor commuter railroads already reimburse Amtrak 
for capital and maintenance costs based on contracts negotiated before 
the new legislation was enacted. The riders and State and local 
taxpayers that fund these commuter railroads should not be asked to pay 
more than has been negotiated. Mr. Chairman, while this Committee does 
not have direct jurisdiction over Amtrak, these increased expenses 
could directly affect the health of the Northeast Corridor's commuter 
rail systems and the hundreds of thousands of riders who use those 
systems every day. Furthermore, in a recent Federal Register Notice, 
FTA has raised the possibility of conditioning Federal transit grants 
on the payment of these increased expenses. We want to emphasize that 
the solution to Amtrak's funding problems cannot come from transit 
funding sources--including the Mass Transit Account of the Highway 
Trust Fund--which are not adequate to sustain the commuter rail and 
other transit programs our Nation requires. APTA has developed a 
comprehensive set of principles to guide us in this area which 
establish that existing contractual obligations must be respected; that 
ongoing support for intercity rail must remain separate from the 
Highway Trust Fund, and that the Northeast Corridor and other Amtrak-
owned assets should remain under public ownership and control.
Conclusion
    Public transportation plays a key role in meeting the goals of the 
Administration and Congress in providing energy independence, 
congestion relief, and transportation mobility options for Americans. 
APTA strongly believes that the Federal Government should invest no 
less than the level authorized and guaranteed by Congress for fiscal 
year 2007 in SAFETEA-LU if we are to advance these goals. APTA also 
believes that Congress must pass legislation that will dramatically 
increase funding for transit security, and we look forward to working 
with Committee to reach that goal.
    Mr. Chairman, on behalf of APTA's member organizations, I thank you 
for this opportunity to express our views and would be pleased to 
answer any questions the Committee may have.
                                 ______
                                 
       RESPONSE TO WRITTEN QUESTIONS OF SENATOR BUNNING 
                       FROM SANDRA BUSHUE

Q.1. The New Freedom Program provides funds for public 
transportation alternatives beyond those required by the 
Americans with Disabilities Act ``ADA'' to assist persons with 
disabilities. Some communities have already exceeded the 
minimum ``ADA'' requirements.
    What will happen in communities where existing services 
already exceed ``ADA'' minimum requirements? For example, will 
communities that provide door-to-door service rather than curb-
to-curb service be able to use the new Freedom Program to fund 
the incremental cost difference?

A.1. FTA published a notice in the Federal Register on March 
15, 2006, (71 Fed. Reg. 13456) seeking comments on the types of 
projects that should be eligible for New Freedom funding. FTA 
has not yet made the policy decision as to whether or not New 
Freedom funds will be available for existing services that 
exceed ADA requirements.
    With regards to door-to-door and curb-to-curb paratransit 
service, FTA notes that under 49 CFR Sec. 37.129, ADA 
complementary paratransit service is defined as ``origin-to-
destination'' service, which may be defined by local 
communities as either door-to-door or curb-to-curb. When this 
U.S. Department of Transportation (DOT) regulation was first 
promulgated, the preamble language stated, ``it is reasonable 
to think that service for some individuals or locations might 
be better if it is door-to-door, while curb-to-curb might be 
better in other instances. This is exactly the sort of detailed 
operational decision best left to the development of 
paratransit plans at the local level.'' (56 Fed. Reg. 45604; 
September 6, 1991). In guidance issued on September 1, 2005, 
DOT provided further clarification of the nature of origin-to-
destination service, stating, ``where the local planning 
process establishes curb-to-curb service as the basic 
paratransit service mode, however, provision should still be 
made to ensure that the service available to each passenger 
actually gets the passenger from his or her point of origin to 
his or her destination point. To meet this origin-to-
destination requirement, service may need to be provided to 
some individuals, or at some locations, in a way that goes 
beyond curb-to-curb service.'' It would appear, then, that 
door-to-door service, whether provided across a community or 
only in circumstances in which a particular passenger needs 
additional assistance, is not beyond the ADA. Therefore, FTA 
proposed in the March 15, 2006, notice that the incremental 
cost of door-to-door service in a community that provides curb-
to-curb service would not be eligible for New Freedom funds. 
FTA is seeking public comment on this proposal.
    ADA complementary paratransit service is provided to 
origins and destinations within corridors with a width of \3/4\ 
mile on each side of each fixed route, including, within the 
core service area, those small areas not inside any corridors 
but surrounded by corridors. 49 CFR Sec. 37.131. FTA 
acknowledged in the March 15, 2006, notice that some 
paratransit operators already provide service outside of the 
\3/4\ mile corridor. FTA proposes in the March 15, 2006, notice 
to permit New Freedom funds be used to fund this existing 
service, so long as it is part of a coordinated plan and is 
competitively selected pursuant to 49 U.S.C. Sec. 5317. FTA is 
seeking public comment on this proposal.
    Other areas where providers may be exceeding the ADA would 
be paratransit hours of operation that exceed the hours of the 
fixed route and same day service. In the notice, FTA proposes 
that these services would be beyond the ADA and eligible for 
funding, but did not contemplate whether these services would 
be eligible for funding if they are currently being provided. 
If public comment supports the use of New Freedom funds for 
existing paratransit service beyond the \3/4\ mile fixed route 
corridor, FTA will consider permitting these funds to be used 
for additional, existing paratransit service that is beyond the 
ADA.

Q.2. The new Freedom and Job Access Reverse Commute Programs 
both require coordinated public transportation and human 
services plans.
    How do you envision implementing this requirement? Will it 
be phased in? What will the expectation be for the coming 
Federal fiscal year?

A.2. FTA published a notice for comment in the Federal Register 
on March 15, 2006 (71 Fed. Reg. 13456), in which we made 
several suggestions regarding implementation of the coordinated 
planning process. Specifically, FTA suggested States and 
communities utilize tools developed through the Federal 
Interagency Coordinating Council on Access and Mobility and 
United We Ride to facilitate the coordinated planning process. 
One specific tool includes the Framework for Action, a self 
assessment instrument that provides concrete decision points 
for stakeholders to discuss as they are moving forward with 
assessment and planning. In addition, FTA is providing 
extensive technical assistance to State Department of 
Transportation offices through the United We Ride Ambassador 
program. This includes funding for experts who are assigned to 
assist States with implementing the provisions of SAFETEA-LU 
related to human services transportation coordination. FTA is 
also working with the Technical Assistance Centers funded 
through SAFETEA-LU (for example, Project ACTION, JobLinks) to 
provide a greater level of assistance in this area.
    Through the March 15, 2006, Federal Register notice, we are 
seeking public comment on the coordinated planning requirements 
of the Job Access and Reverse Commute (JARC) and New Freedom 
programs. We expect to publish final guidance in the form of 
circulars later this year. In the notice, FTA acknowledged that 
the New Freedom program does not require projects to be derived 
from a locally developed, public transit-human services 
transportation plan until fiscal year 2007; however, there is 
no delay for the JARC program. We recognize that local public 
transit-human services transportation plans will require 
ongoing attention and are dynamic documents. Therefore, we also 
recognize that plans will change over time. Pursuant to the 
statute, FTA will require recipients to certify that projects 
were derived from a locally developed, public transit-human 
services transportation plan for fiscal year 2007.
    The March 15, 2006, notice included guidance for fiscal 
year 2006, as follows:

 For the New Freedom and Elderly Individuals and 
    Individuals with Disabilities (Section 5310) programs, the 
    Safe, Accountable, Flexible, Efficient Transportation 
    Equity Act: A Legacy for Users (SAFETEA-LU) requires that 
    projects selected be derived from a coordinated plan 
    beginning in fiscal year 2007. This requirement allows time 
    for the development of a coordinated plan and permits 
    projects to be funded in fiscal year 2006 even if a 
    coordinated plan is not yet in place. FTA encourages 
    designated recipients to conduct coordinated planning 
    activities and consultation with planning partners before 
    the selection of fiscal year 2006 projects, but it is not 
    required in fiscal year 2006 that the projects selected be 
    derived from a completed coordinated public transit-human 
    services transportation plan.
 For JARC programs, there is no delay in the 
    requirement that projects be derived from a coordinated 
    plan since a similar requirement was in place for JARC 
    under TEA-21. For areas that previously received JARC 
    discretionary funding, the previously required JARC plan 
    may satisfy the coordinated planning requirement for fiscal 
    year 2006. In areas with no current JARC plan, for fiscal 
    year 2006, the planning partners should, at a minimum, be 
    consulted about projects and where possible expressions of 
    support should be obtained and documented. Each grant 
    application must describe activities undertaken to reach 
    out to stakeholders, including providers and users of 
    service, to identify community-wide needs and to begin to 
    catalog available resources.
 If FTA subsequently establishes more specific criteria 
    for the coordinated planning or competitive selection 
    process, or for project eligibility that were not met by 
    early applicants for fiscal year 2006 funds, the 
    requirements will not be applied retroactively to grants 
    awarded prior to the issuance of the guidance.

Q.3. I am sure you are hearing concerns over the $100 million 
cut proposed to the Small Starts program. This program was 
intended to fund smaller transportation projects that require a 
Federal share less than $75 million and have a total project 
cost of less than $250 million. The idea of including this 
authorization in the highway bill was to get some of these 
small projects moving in a program with reduced criteria and 
procedures.
    Given that Congress supported the idea of a Small Starts 
program to expedite projects at a lower cost, why can't your 
agency utilize some creative steps to implement this program 
and get things moving?

A.3. We believe we have made significant progress this year to 
implement the Small Starts program. FTA published an Advanced 
Notice of Proposed Rulemaking in the Federal Register on 
January 30, 2006, to solicit comment on the new ``Small 
Starts'' program. In addition, FTA wants to ensure that the 
industry helps to develop this new program. Thus, FTA has been 
meeting with transit agencies, industry representatives, and 
other stakeholders to solicit comments.
    In order to advance projects before the formal Federal 
rulemaking process is completed, FTA will issue interim 
guidance this summer for project sponsors to use in submitting 
information that FTA can use to rate and evaluate projects 
under the Small Starts program. The interim guidance will 
specify a simplified evaluation and rating process for Small 
Starts reflecting the requirements specified in SAFETEA-LU.

Q.4. According to GAO, billions of dollars are spent on 
transportation under federally funded human service agencies, 
and are often not coordinated well with transportation 
departments and agencies. Improvements in coordination have 
been supported through the President's transportation 
coordination executive order and also through provisions of the 
highway bill.
    What will the Federal Transit Administration and the 
Department of Transportation be doing next on the 
transportation coordination issue? What can you recommend to 
Congress and this Committee to make continuing progress on 
transportation coordination issues?

A.4. Congress has noted in other human services areas the 
importance of systems change initiatives to enhance interagency 
collaboration, such as the Medicaid Systems Change Grants, the 
Special Education State Improvement Grants, and others. 
Research shows that the implementation of systems change 
requires a sustained level of effort in the areas of leadership 
and partnership development in order to effectively enhance 
changes in policy, resources, and behavior. In the case of 
human services transportation, the complexities of addressing 
systems change at the Federal, State, and local levels, for 
people with disabilities, older adults, and families with lower 
incomes, across a multitude of services (for example, health, 
employment, education, rehabilitation, etc.) adds to the 
difficulty of creating a simplified and seamless coordinated 
human services transportation system.
    The Federal Interagency Coordinating Council on Access and 
Mobility (CCAM) established by Executive Order 13330 includes 
11 Federal Departments, representing over 62 Federal programs 
supporting human services transportation. In order to address 
the requirements of the Order, the CCAM outlined five key 
recommendations that create coordinated Federal policy in 
coordinated planning, vehicle sharing, cost sharing, and 
performance outcomes. Through the United We Ride initiative, 
the Council has also provided small grants to States to enhance 
their efforts in coordinating human services transportation. 
The Council has also developed several tools and strategies to 
assist communities.
    FTA will continue to provide an active leadership role and 
work at the Federal, State, and regional levels to enhance 
coordinated human services transportation planning. FTA has 
dedicated staff resources to work specifically on coordination 
of human services transportation. Staff supports the work of 
the Federal Interagency Coordinating Council on Access and 
Mobility (CCAM), including participation in five active 
workgroups addressing policy, technical assistance, education/
outreach, research and development, and emergency preparedness.
    FTA is also working to implement the provisions of SAFETEA-
LU regarding human services transportation. This includes 
utilizing the tools and strategies developed through United We 
Ride and making these tools widely available for FTA grantees. 
Examples include the Framework for Action, a self assessment 
tool for communities and states; the Useful Practice Database; 
and a Community Action Guide, currently in development.
    SAFETEA-LU established several human services coordination 
provisions that are enormously helpful in establishing more 
fully human services coordinated transportation systems. These 
included: (1) Creating a locally developed coordinated public 
transit-human services transportation plan with transportation 
and human services partnerships and consumer involvement; (2) 
the ability to utilize and match Federal funds across Federal 
transportation programs for coordinated transportation 
services; and (3) creating, as an eligible expense, funding for 
mobility management that provides communities the resources to 
support coordination activities. To implement these provisions, 
FTA is actively providing technical assistance to States and 
communities and providing the tools developed through United We 
Ride to facilitate implementation.
    Similar support for human services transportation 
coordination needs to be created in other Federal programs 
supporting transportation. In particular, Federal programs that 
establish or contract for transportation services should 
require grantees engaged in sponsoring transportation services 
to participate in locally developed, public transit-human 
services coordinated transportation planning processes.
    Through United We Ride, FTA and partner agencies have 
offered small grants (between $35,000-$75,000) to States to 
enhance transportation planning between State agencies. It 
appears that even these small dollars have provided great 
incentives for moving the coordination activities forward. In 
less than 2 years, the number of States with a coordinated 
human services transportation plan has increased from 5 to 32. 
The remaining States are in the process of developing plans.
    It would likely be equally beneficial to provide similar 
types of financial incentives for communities that create 
coordinated planning processes involving multiple human 
services transportation programs that create a single point of 
access for customers to access transportation services and 
establish a comprehensive, coordinated family of transportation 
services to meet the transportation needs of disadvantaged 
populations (low-income persons, including children, older 
adults, and persons with disabilities). Currently, 
uncoordinated programs force customers into a confusing maze of 
individual stove pipe programs to receive rides and often leave 
important service gaps. Incentives might include additional 
funding or more favorable matching requirements.

Q.5. The highway bill was signed into law on August 10, 2005. 
There is a need in Kentucky and elsewhere to get these dollars 
into the economy to meet transportation needs.
    What is the Department of Transportation doing to 
streamline the delivery of funding and projects?

A.5. FTA has worked earnestly to improve program delivery and 
customer service. For several years, FTA has met or exceeded 
its goal of awarding at least 80 percent of grants within 60 
days of receipt of a complete application. We also exceeded our 
goal to reduce the average grant processing time to 36 days or 
less, even given the increase in the grant processing workload 
related to the multiple incremental extensions of funding 
during the reauthorization process.
    FTA has worked with Congressional committees to clarify the 
intended recipients of earmarked projects when it was not 
apparent in bill or report language, and we have reached out to 
local communities, particularly new grantees, to help them 
develop applications for earmarked projects.
    FTA summarized the new provisions and programs of SAFETEA-
LU in a Federal Register Notice issued November 30, 2005, and 
conducted multiple listening sessions for communities 
throughout the country. We established the new codes and grant 
processing procedures necessary to award grants in fiscal year 
2006 and issued interim guidance where necessary to allow 
grantees to apply for funding even while final program guidance 
is still being developed with opportunity for public comment.

       RESPONSE TO WRITTEN QUESTIONS OF SENATOR SARBANES 
                       FROM SANDRA BUSHUE

Q.1. During consideration of SAFETEA-LU, the Banking Committee 
and the Transportation & Infrastructure Committee in the House 
received project requests totaling more than seven times the 
amount available for discretionary programs. After careful 
consideration, we determined that these requests justified a 
Small Starts program level of $200 million per year.
    What is the specific basis for FTA's conclusion that $100 
million is the maximum amount that can be distributed in fiscal 
year 2007? Once your program rules are in place, which you have 
estimated will occur in June 2007, why would there be a limit 
(other than the limit provided in SAFETEA-LU) on the amount of 
funds that could be distributed?

A.1. SAFETEA-LU requires regulations to implement the new Small 
Starts program, including the evaluation criteria for selecting 
projects and a new funding grant agreement. FTA expects that 
new regulations will not be finalized until the latter part of 
fiscal year 2007. While we plan to issue interim guidance this 
summer which will allow us to rate and evaluate Small Starts 
projects, we expect that a majority of the initial projects 
will only be ready to enter the project development process, 
not to receive Project Construction Grant Agreements. Given the 
long lead time needed to implement the new program, $100 
million is more in line with the level of effort for awarding 
grants in the first year of this program.

Q.2. I appreciate the fact that the President's budget requests 
the full $23 million authorized for the new Transit in the 
Parks program. This program stems from legislation I introduced 
a number of years ago after a visit to some of our Western 
parks, in which I saw how congested park roads and parking lots 
can be, especially during heavy visitation seasons. This 
program is intended to help alleviate that congestion by 
providing resources to help parks develop transit systems and 
other transportation alternatives. When does the FTA expect to 
begin making grants under this program?

A.2. FTA plans to award funds in the summer of 2006 to projects 
under the new Alternative Transportation in Parks and Public 
Lands program. FTA has been working closely with 
representatives from Federal land management agencies to 
develop this new program. On March 23, 2006, FTA published a 
Federal Register ``Notice of Funding Availability; Solicitation 
of Proposals for Funding through the Alternative Transportation 
in Parks and Public Lands Program,'' requesting project 
proposals for fiscal year 2006 funding. Proposals are due May 
5, 2006, and will be evaluated according to the criteria in the 
law by an interagency team which includes FTA, each of the 
Federal land management agencies and the Department of the 
Interior. The team will provide recommendations to the 
Secretary of Interior who, following consultation with the 
Secretary of Transportation, shall determine the final 
selection and amount of funding for each project. The 
Department of the Interior plans to announce the projects 
selected by summer of 2006. FTA will publish the list of all 
selected projects and funding levels in the Federal Register. 
Funds will be awarded in summer and fall 2006, and administered 
according to Federal requirements as well as the appropriate 
policies, guidelines, and rules of the pertinent agencies.

Q.3. Before Hurricane Katrina, both New Orleans and the Gulf 
Coast of Mississippi had vibrant public transit systems. In New 
Orleans, the transit system carried 124,000 people every day, 
with a fleet of 372 buses and 64 streetcars, while 
Mississippi's Coast Transportation Authority provided over 
2,000 trips per day to residents of Biloxi and Gulfport. Those 
systems are now struggling to get up and running again, so that 
the residents of those areas who do not own a car or who lost 
their cars as a result of the hurricane can access their jobs, 
doctors, and other needed services.
    From all accounts, it will take many more months before the 
affected areas are restored to anything approaching their 
former size and level of activity. And yet, I understand that 
FEMA's authority to pay for operating subsidies to these 
systems is scheduled to expire on June 30 of this year. With 
little to no local tax base, these systems will be forced to 
cut service, stranding thousands of people and hampering the 
efforts of these areas to resume their normal life.
    What is the FTA doing to help these systems make public 
transit available for as long as it takes these areas to 
recover from this devastating storm?

A.3. Since very early in the disaster response and recovery 
effort, FTA has worked closely with local and State officials 
to support public transit. In the early fall of 2005, FTA 
worked with FEMA to secure Mission Assignments and contracts to 
continue operating local transit services damaged by the 
hurricane in Louisiana and Mississippi. FEMA Mission 
Assignments totaled $66 million for provision of transit 
service in New Orleans, Baton Rouge, as well as rural and other 
urban services in Louisiana. In Mississippi, FEMA Mission 
Assignments totaled $3.35 million for provision of transit 
service in Gulfport-Biloxi and surrounding counties, as well as 
emergency transportation services in rural Mississippi. These 
Mission Assignments have or are expected to expire as of June 
30, 2006.
    As these communities move forward in recovery efforts, FTA 
has been and will continue to help local transit authority and 
metropolitan planning officials undertake both short-term and 
long-term planning projects. FTA has found that there is a 
correlation between the erosion of the tax base and the transit 
service requirements. FTA has supported planning efforts in 
both Mississippi and Louisiana designed to help local officials 
better understand and identify future revenues to support 
transit. Although, under the Stafford Act, FEMA has 
responsibility for funding and implementing long-term recovery 
in these areas, FTA's grantees will continue to receive formula 
funds, which in areas over 200,000 in population can be used 
for preventive maintenance costs and in areas under 200,000 in 
population can be used for operating assistance. In addition, 
FTA has deferred the local match for grants to transit agencies 
in the gulf area to help alleviate the burden on local funding 
while the tax base is rebuilt.
    In Louisiana, FTA is working with State and local officials 
and long term recovery planning for New Orleans is currently 
underway through numerous organizations, including the 
Governor's Louisiana Recovery Authority, the Mayor's Bring Back 
New Orleans Commission, and FEMA's ESF-14 Long Term Recovery 
teams. In New Orleans, FTA is working with FEMA on the 
availability of FTA capital funds and FEMA public assistance 
funds for transit equipment replacement and transit facility 
reconstruction and to ensure that priority capital projects in 
the New Orleans area can proceed in the near future. In 
addition, FTA has deferred the local share for existing and 
future grants for the New Orleans Regional Transit Authority 
(NORTA). FTA will work with both FEMA and NORTA officials to 
help process contract modifications that will ensure that the 
$47 million FEMA Mission Assignment for emergency transit 
services in New Orleans and Baton Rouge is utilized to the 
maximum extent feasible for priority transit services. FTA has 
provided in-house staff expertise and has funded contractors to 
support New Orleans planning by continued coordination with 
various Federal, State, and local long-term recovery efforts, 
and will support NORTA and the Regional Planning Commission 
(RPC) as they prepare their Five Year Strategic Plan for 
Recovery. In Baton Rouge, FTA has provided in-house staff 
expertise and has funded contractors to support the Capital 
Area Transit System and the Capital Region Planning Commission 
(CRPC) to prepare transit in Baton Rouge for expanded service 
needs.
    In Mississippi, FTA provided direct, on-site technical 
support for several months beginning in September 2005 for 
Coast Transit Authority (CTA) to operate initial and interim 
disaster response and recovery transit services in the 
Gulfport-Biloxi area. FTA utilized in-house staff expertise and 
provided support to provide direct operational planning 
technical support to CTA. The Governor's Commission on 
Recovery, Rebuilding, and Renewal is undertaking long-term 
planning activities, coordinated with other local and county 
efforts. FTA is providing additional technical support for an 
Intermodal Transportation Working Group that has been 
established and, specifically for CTA and the Gulf Regional 
Planning Commission (GRPC) in short-term and long-term planning 
activities. FTA, CTA, CRPC, and the Mississippi Department of 
Transportation are initiating a transit development plan, to be 
completed in coordination with the regional transportation plan 
and recovery efforts.

        RESPONSE TO WRITTEN QUESTIONS OF SENATOR CARPER 
                       FROM SANDRA BUSHUE

    The Federal Transit Administration placed a notice in the 
Federal Register earlier this month stating that your agency 
will withhold transit funds from agencies that fail to pay any 
additional fees assessed by the Federal Railroad Administration 
for the maintenance of the Northeast Corridor.
Q.1. What was your involvement in the development of this 
policy?

A.1. The development of the policy occurred prior to my 
becoming Deputy Administrator of the Federal Transit 
Administration. Therefore, I did not participate personally in 
its development.

Q.2. What legal authority are you relying on?

A.2. FTA respectfully notes that the opening comment in 
question #1 above misstates the substance of FTA's publication 
in the Federal Register on February 10, 2006. FTA's notice did 
not state that FTA would withhold transit funds from agencies 
that fail to pay any additional fees assessed by the Federal 
Railroad Administration (FRA) for the maintenance of the 
Northeast Corridor. Instead, FTA's notice identified 49 U.S.C. 
Sec. 5334(a)(9) as the authority of the Secretary to include in 
an agreement or instrument a covenant or term the Secretary 
considers necessary to carryout the transit law or to enforce 
the requirements of the Appropriation for ``Capital and Debt 
Service Grants to the National Railroad Passenger Corporation'' 
set forth in Division A of Title I of the Transportation, 
Treasury, Housing and Urban Development, the Judiciary, the 
District of Columbia, and Independent Agencies Appropriations 
Act of 2006 (the Appropriations Act). The distinction between 
stating the basis of the Secretary's authority to enforce the 
Appropriations Act, on the one hand, and declaring FTA's intent 
to exercise that authority, on the other, is significant. As 
the Committee may know, FTA stated at a meeting with commuter 
rail agencies located in the Northeast Corridor on February 28, 
2006, that the Department has no reason to believe that it 
needs to resort to the Secretary's powers under Section 
5334(a)(9) (or the terms and conditions for grants already 
established thereunder) in order to enforce the Appropriations 
Act, since there is an open and inclusive process underway 
between such agencies and the Department to implement that law.
    The legal basis for FTA's right to withhold funds from 
grantees for violation of the Appropriations Act rests on 
certain covenants and terms in the Master Agreement (to which 
each FTA grantee is subject) which are within the authority of 
the Secretary to include in the Master Agreement pursuant to 49 
U.S.C. Sec. 5334(a)(9). Please note, in particular, that 
Section 2(d) of the Master Agreement provides that a grantee 
shall comply with Federal law: ``[t]he Recipient agrees that it 
. . . is ultimately responsible for compliance with all 
applicable Federal laws, regulations, and directives, this 
Master Agreement, and the underlying Grant Agreement or 
Cooperative Agreement for the Project, except to the extent 
that FTA determines otherwise in writing.'' (See Sec. 2(d), 
Master Agreement (MA-12), October, 2005).\1\ Separately, 
Section 11 of the Master Agreement provides FTA with the right 
to suspend or terminate all or any part of the Federal 
assistance provided by FTA to a grantee as a remedy for any 
violation by the grantee of its covenant in Section 2(d): 
``[t]he Recipient agrees that the Federal Government may 
suspend or terminate all or any part of the Federal assistance 
to be provided if the Recipient has violated the terms of the 
Grant Agreement or Cooperative Agreement for the Project, 
including this Master Agreement. . . .'' (See Sec. 11, Master 
Agreement (MA-12), October, 2005). In the event that a transit 
agency violated the Appropriations Act, it would thereby (a) 
violate its covenant in the Master Agreement to comply with 
Federal law and (b) trigger FTA's remedies set forth in Section 
11 of the Master Agreement, including the remedy to suspend or 
terminate all or any part of the Federal assistance payable to 
the grantee. The Master Agreement, which each FTA grantee 
agrees to enter in connection with the disbursement of FTA 
funds, has long included Sections 2(d) and 11.\2\
---------------------------------------------------------------------------
    \1\ Please note that pursuant to Section 2(c)(1) of the Master 
Agreement, each FTA grantee also ``agrees that all Federal laws and 
regulations control Project award and implementation.'' Section 2(c)(1) 
of the Master Agreement also states that the grantee ``agrees that the 
most recent of such Federal laws, regulations, and directives will 
govern the Administration of the Project at any particular time . . . 
.''
    \2\ Please note that, notwithstanding what the Master Agreement 
currently provides, the Secretary has the authority under 49 U.S.C. 
Sec. 5334(a)(9) to include in any future Master Agreement a covenant or 
term that expressly requires payment of assessments made by the 
Secretary in accordance with law, provided the Secretary considered 
such term or covenant necessary to carry out Chapter 53 of Title 49.

Q.3. How long will transit agencies and States be given to 
budget for increased Northeast Corridor maintenance fees before 
the Federal Transit Administration starts withholding transit 
---------------------------------------------------------------------------
funds?

A.3. The FRA, rather than FTA, is responsible for all aspects 
of calculating and assessing the fees contemplated by the 
Appropriations Act, including the terms and conditions relating 
to the enforcement of the obligations of commuter rail agencies 
thereunder. FTA has therefore asked the Office of Chief Counsel 
of FRA to answer this question by separate letter to the 
Committee.

Q.4. Will you expect States to come up with this additional 
funding outside of their regular budget cycle?

A.4. FRA, rather than FTA, is responsible for all aspects of 
calculating and assessing the fees contemplated by the 
Appropriations Act, including the terms and conditions, if any, 
that would bear on the source of funds utilized by commuter 
rail agencies or States to satisfy their obligations 
thereunder. FTA has therefore asked the Office of Chief Counsel 
of FRA to answer this question by separate letter to the 
Committee.

Q.5. Since most additional fees owed for Northeast Corridor 
maintenance will be paid by States, why did the Administration 
decide to threaten to withhold transit funds instead of highway 
funds or other transportation funds?

A.5. The Secretary takes seriously his obligation faithfully to 
execute the laws of the United States, including the directives 
applicable to the Secretary under the Appropriations Act with 
respect to the assessment and collection of fees for capital 
and maintenance costs attributable to commuter rail operations 
over the Northeast Corridor. It is a requirement of the 
Appropriations Act that ``revenues from [the assessments] shall 
be merged with this appropriation and be available for 
obligation and expenditure consistent with the terms and 
conditions of this paragraph.'' By implication, therefore, the 
Secretary is obliged, at a minimum, to act with a view to 
collecting a portion of such assessments prior to the end of 
fiscal year 2006. However, the Appropriations Act itself 
provides the Secretary no means of enforcing the payment of the 
assessments that he is required by law to collect. For that 
reason, and given the shortness of time the Secretary has to 
implement the law, the Department needed to identify a flexible 
enforcement mechanism. Among the mechanisms available to the 
Department, the arrangements governing FTA's grants afforded 
the Secretary the most flexible and effective means to ensure 
compliance with the law. The Department, however, believes that 
such enforcement mechanism is strictly one of last resort, and, 
again, has no reason to believe that the Department would need 
to resort to it.

       RESPONSE TO WRITTEN QUESTIONS OF SENATOR BUNNING 
                      FROM WILLIAM MILLAR

Q.1. Mr. Millar, during the delay over the reauthorization of 
the program, many of the businesses that are involved in 
transportation planning, design, and construction were 
concerned about the impact that the delays were having on their 
businesses.
    What can you tell this Committee about the condition of the 
business side of the transit industry? How are the 
manufacturers and suppliers and consultants doing now that we 
have a new law?

A.1. The business side of the transit industry was particularly 
concerned about the 2-year delay in getting SAFETEA-LU enacted 
into law. That delay created uncertainty and limited the 
ability of transit agencies to make long-term planning and 
investment decisions--which curtailed business activity and 
thus had an obvious negative impact on transit businesses. All 
of our members, and particularly our business members, were 
pleased that reauthorization legislation became a reality with 
the enactment of SAFETEA-LU on August 10, 2005. While it took a 
few months longer for the fiscal year 2006 transportation 
appropriations to become law, and while it takes time for that 
law to be translated into the apportionment and then allocation 
of Federal transit funds by the Federal Transit Administration, 
there is a clear sense now on the part of both our public and 
private sector members, with a long-range reauthorization law 
in place with guaranteed funding, that the transit industry 
business climate is greatly improved going forward. On behalf 
of our more than 1,600 member organizations, we thank the 
Senate Banking Committee for its key role in getting SAFETEA-LU 
enacted into law with significant increases for public 
transportation.
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