STATEMENT OF

MARION C. BLAKEY,
ADMINISTRATOR,
FEDERAL AVIATION ADMINISTRATION

BEFORE THE

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON AVIATION

ON

THE FAA’S FY 2008 BUDGET,

FEBRUARY 14, 2007.

Good afternoon, Chairman Costello, Congressman Petri and members of the subcommittee.  As this is my first appearance before the 110^th Congress, I would like to take this opportunity to acknowledge the new Chairman and Ranking Member of the subcommittee and say that I look forward to working with you on what I’m sure will be a broad range of issues.  It is a pleasure to appear before you on behalf of the 44,000 men and women of the Federal Aviation Administration (FAA) to discuss our FY 2008 budget request.  But before discussing next year’s budget, I would like to touch briefly on the Administration’s reauthorization proposal.  I cannot overstate how important enacting the reauthorization proposal is to FAA’s ability to meet the safety and capacity needs of our Nation’s aviation system -- both in the short and long term.     

Reauthorization Proposal

As most everyone knows, we have been working on this reauthorization proposal for over two years.  FAA’s aviation taxes and programmatic authorization under Vision 100 both expire on September 30^th of this year.  Given where we are as an agency and taking into account the significant challenges before us, we consider this a rare opportunity to make the critical programmatic and financing changes needed for FAA - and the aviation community as a whole - to move forward and meet those challenges while maintaining the safest, and most efficient aviation system in the world

FAA did not develop this proposal in a vacuum.  We conducted extensive outreach to our stakeholders, and analyzed best practices from industry, other government agencies, and other countries.

Our legacy aviation system has served the country well, but it is in dire need of a major transformation.  There is no way that the current system can handle future traffic increases without major delays.   The Federal Government’s commitment to being ready for the future is embodied in the Next Generation Air Transportation System (NextGen) initiative.  This is a multi-agency, multi-year endeavor that is of the highest importance.  A successful transformation to NextGen will require bold action and central planning over the next 20 years.     

Unfortunately, the current financing mechanisms are not well suited to support the transformation to the Next Generation Air Transportation System (NextGen).  This transformation is essential.  As we look out into the future, we see a system that will need to grow to accommodate the demands of our stakeholders and the flying public.  The current financing mechanisms – both in terms of taxes and spending – are not tied to FAA’s cost to deliver services, and therefore are not scalable to meet these growing demands.  To deliver the benefits of NextGen efficiently and on schedule, the financing system should be reformed so that both our income and our outgo are better tied to the services we provide.

I know you plan to have a series of hearings on reauthorization and I look forward to participating in what I know will be a robust discussion of the best way to proceed.  Let me just emphasize how important I believe it is to move toward a stable, cost-based funding structure to ensure that FAA’s costs and revenues are better aligned and that our stakeholders are treated equitably and reap the benefits of their investments in the system.  That is what our proposal provides.  It is a simple, transparent, and repeatable methodology to divide FAA’s costs among users and services.  It also contains other needed programmatic reforms that provide airports with greater financing flexibilities, address environmental and congestion challenges.  All in all, I expect it will be a very interesting, and hopefully productive year.

FY 2008 Budget   

I will now turn to the issue at hand.  The FY 2008 budget requests a total of $14.1 billion to improve safety, reduce congestion, and improve global connectivity.  The request supports our financing and programmatic reforms and focuses on accountability and performance.  For several years, we have pushed to manage more effectively, rein in costs, and better respond to our customers’ needs.

As always, safety is FAA’s primary concern.  Our collaboration with industry speaks for itself: efforts to improve operations have contributed to the safest period in aviation history.  At the same time, the demand for FAA services has never been greater.  We oversee about 50,000 flights per day.  In 1995, the system supported about 545 million passengers.  In 2005, it was 739 million.  Forecasts estimate one billion passengers annually by 2015.

Given the anticipated growth—both  in terms of passengers, and, critically, in the number of aircraft operations—we know that our services must adapt to meet the demand.  We also know that the complexity of the future operating environment—with evolving fleet mixes, new aircraft, technology, and environmental constraints—must be approached in partnership with our customers.  This budget demonstrates a long-term commitment to NextGen, not as a pie-in-the-sky vision, but as embodied by tangible systems, processes, and capital projects that will lead us to the future.

For FY 2008, FAA has prepared the budget in a new account structure that aligns with the financing reform proposal and the services that we provide.  While the Grants-in-Aid for Airports (AIP); and Research, Engineering, and Development (R,E,&D) accounts remain, the Operations and Facilities and Equipment accounts have been replaced with two new accounts.  There is a Safety and Operations account and an Air Traffic Organization (ATO) account that more closely align the accounts with our lines of business.  Under our reauthorization proposal, beginning in FY 2009 these accounts would be funded by a combination of fees, taxes and general fund contribution.  We consider this structure to be more consistent with and supportive of our business-like approach by expanding our comprehensive pay-for-performance programs, consolidating operations, improving internal financial management, and delivering benefits to our customers.

Safety and Operations

The FY 2008 budget provides $2 billion for Safety and Operations.  Most of the funds requested for Safety and Operations in FY 2008 support maintaining and increasing aviation safety and efficiency, reflecting the President’s commitment in this area.  Other significant amounts support reducing congestion and enhancing safety.  Of this request, $1.1 billion is for the agency’s Aviation Safety (AVS) office.  This level supports increasing the AVS safety workforce by 177 inspectors and 173 other safety staff.

The FY 2008 budget requests $12.8 million for Commercial Space Transportation to continue its commitment to timely and responsive licensing and regulatory processes designed to enable a safe, secure, efficient, and internationally competitive U.S. space transportation industry.  Commercial space transportation is an exciting area, and we are commited to supporting its continued growth.  $758 million is requested for Staff Offices to fund administrative and managerial costs for FAA’s regulatory, international, medical, engineering and development programs, as well as policy  oversight and management functions.

Air Traffic Organization

As a Performance Based Organization (PBO), the Air Traffic Organization (ATO) continues to provide safe, secure, and cost effective air traffic services.  The budget provides $7 billion for ATO operating expenses.  In FY 2008, this will fund 1,420 new air traffic controllers to address the projected 1,276 controller retirements next year, resulting in a net increase of 144 controllers.  In October 2005, ATO completed the largest non-military A-76 competition in history.  That action will save the agency $51.7 million in FY 2008, with a 10 year projected savings and cost avoidance totaling almost $2.2 billion.  The contract not only saves money, it also commits the vendor to modernize and improve the flight services we provide to general aviation pilots. In addition, the employees who left Federal service as a result of this transition were given offers to work for Lockheed Martin, the successful bidder of the contract.

In FY 2006, ATO consolidated its administrative and staff support functions from nine service areas to three. This will allow us to provide better service to customers while saving an estimated $360 to $460 million over the next ten years. In FY 2008, we anticipate savings of $29 million from Service Area Consolidation.

NextGen and Capital Needs

The ATO FY 2008 capital program budget requests $2.3 billion to support the ultimate NextGen vision – with $174 million requested for key NextGen activities detailed below  – and continues to support the investments needed to keep the current National Airspace System (NAS) functioning.  We know that it will take not only funding, but new management approaches, to transform today’s aviation system to meet tomorrow’s needs.  We have done much in recent years to break down stovepipes and plan in a more integrated manner, but NextGen requires us to go further.  The new OEP—formerly the Operational Evolution Plan, and now the Operational Evolution Partnership—is a big step in the right direction.  OEP has gone from a 10 year rolling plan to a more comprehensive roadmap for how we get to NextGen.  The emphasis is on “partnership”—within and between major FAA organizations, with the JPDO and its other partner agencies, the private sector, and, of course Congress.   

One of our greatest challenges is our ability to define what the future system will look like.  What technologies will it be comprised of?  In the coming months, the JPDO will publish the first official NextGen Enterprise Architecture and Concept of Operations.  The significance of these foundational documents should not be understated.  They are essential to understanding the  transformed operational environment, will allow us to more precisely develop a plan for achieving it, and will provide the basis for architecture-based, quantitative resource planning.  Our reauthorization proposal is designed to strengthen the key linkages needed to implement NextGen, and to deliver those resources when they are needed. 

Given demand growth, we know it is important to improve operations well in advance of 2025.  To do so, we are requesting funding to stage demonstrations and develop critical infrastructure that will better define how we can move to trajectory based operations and identify implementation opportunities.  Ultimately, trajectory-based operations will allow pilots to select the most cost-effective, fuel-efficient routes, achieving substantial cost and time savings for our customers, while maintaining the highest levels of safety.  Our capital request funds a growing list of NextGen transformational technologies.  Most significantly, these include Automatic Dependent Surveillance-Broadcast, the next generation surveillance technology; System-Wide Information Management, which will provide a broad range of real-time information to users of the National Airspace System; and NextGen Network Enabled Weather, which will improve forecasting and information sharing and enhance safety.  NextGen Demonstration and Infrastructure Development projects will be used to identify early implementation opportunities, refine longer-term objectives, and if results dictate, eliminate certain concepts from further consideration.

We are also requesting research funds to continue supporting the JPDO.  As the unit that spearheads NextGen for the federal government, JPDO will continue defining the future operating environment, identifying demonstration opportunities, and working with the relevant agencies to implement them.  We are also requesting funds to support wake turbulence research, the results of which will help us increase capacity while maintaining safety.  In addition, research funds would be directed to environmental research, especially noise and emission control, critical to the design of the future system.  And finally, we would fund further research on unmanned aircraft systems, a likely addition to the future fleet mix.

Grants in Aid for Airports (AIP)

The FAA is committed to a healthy national air transportation system.  Airports are a key part of the system, and that includes small and medium-sized airports that rely on AIP funding to help meet their capital needs.

We have proposed changes to the Federal funding programs which will stabilize and enhance these funding sources for airports.  With our proposed programmatic changes, the $2.75 billion proposed in our budget will be more than enough to finance airports’ capital needs and meet national system safety and capacity objectives.

Research, Engineering, and Development (R,E,&D)

The FY 2008 request for RE&D is $140 million.  The request includes $91.3 million for continued research on aviation safety issues.  The remaining research funding is for reduced congestion and environmental issues, including $14.3 million for the Joint Planning and Development Office to continue defining and facilitating the transition to NextGen.  An additional $3.5 million in support for JPDO is contained in the ATO capital request, related specifically to the work on the demonstration projects.

Flight Plan 2007 - 2011 

The Flight Plan is FAA’s rolling five-year strategic plan that we first undertook in 2004.  As scheduled, we updated it last fall, with input from our internal and external stakeholders.  The Flight Plan is organized around the agency’s primary goals: increased safety; greater capacity; international leadership, and organizational excellence. 

The Flight Plan is our blueprint for managing the agency.  It has made the FAA more business-like, performance-based, and customer-focused.

As part of our Flight Plan, each FAA organization now has its own individual business plan.  Each of these plans is linked to the Flight Plan, budgeted and tied to what the customers need. The agency’s business plan goals have been built into a performance-based tracking system that is posted to the FAA website each quarter.  It lists each of the agency’s goals, performance targets, who is responsible, and the status of each.  Using this data, the senior management team conducts a monthly review of our performance.  When used with other cost and performance data, the Flight Plan information clearly and precisely identifies the effectiveness of a program across the entire agency.  With this perspective, the agency is able to capitalize on successful strategies.  Let me address our performance and requests under each of our goals.

Increased Safety

At FAA, safety is our top priority, and approximately 66 percent of our budget request, $9.4 billion, supports this goal.  Over the last three years, the accident trends in both commercial and general aviation have been at all-time lows. Commercial space transportation continues its remarkable safety record, without a fatality, injury, or any significant property damage to the public. The Flight Plan continues our commitment to reduce commercial and general aviation fatal accidents. We continue to strive toward a three-year rolling average for our commercial airline fatal accident rate of 0.010 fatal accidents per 100,000 departures or below. 

We have achieved the highest safety standards in the history of aviation. Even so, our goal is—as always—to continue to improve safety. We address our operational vulnerabilities to reduce risk. We work to improve airport infrastructure, safety management systems awareness, runway safety training, and new procedures.  One major key to our successful safety efforts is cooperation among our stakeholders. We constantly work with our stakeholder groups to meet our safety goal. Each group helps us with technology, communications, and its own unique expertise. In our responsibility for safety oversight, we work with them to establish their own safety management systems that meet the highest standards of quality. 

To help reduce runway incursions, we deployed the Airport Surface Detection Equipment-Model X (ASDE-X) warning system at five major airports in FY 2006. We also strengthened the airfield paint markings standard for taxiway centerlines at 72 large airports to alert pilots when they are approaching hold short lines so they won’t inadvertently enter a runway without a clearance.  Our efforts also are helping controllers do their jobs more safely, especially when it comes to tracking and eliminating operational errors. In response to a long-standing recommendation by the Department of

Transportation Inspector General and the National Transportation Safety Board to improve reports of operational errors, we’ve added a new initiative to automate data collection. The Traffic Analysis and Review Program—known as “TARP”—is a state-of-the-art traffic analysis and playback system that will improve operational error identification and quality assurance. We’re putting the software in place for use next year, with all installations complete by 2011. The high-fidelity, near-real time playback feature of TARP will also support more effective and efficient air traffic controller training.

At airports, over 48 percent of our AIP grants go to safety-related projects, such as upgrades to runway safety areas, runway safety action team recommendations, purchase of airport rescue and fire fighting vehicles, and airfield signing, marking and lighting.  AIP also supports projects that reduce runway incursions.  For example, end-around perimeter taxiways at Atlanta and Dallas-Fort Worth will not only increase capacity, but will also reduce the risk of runway incursions by substantially reducing the number of runway crossings.

Three operating capabilities are key to handling the traffic demand forecast for 2025 and beyond: Navigation, Communications, and Surveillance. We have already developed design criteria as well as aircraft and operator requirements for Required Navigation Performance (RNP) approaches – a key element of NextGen’s near term operational environment. We published 6 special RNP approaches in 2005, 28 in 2006, and set a goal of 25 each for FY 2007 and FY 2008. We will continue to develop and implement RNP procedures to reduce our already low airline fatal accident rate.  In addition to its safety benefits, we expect RNP to help keep airports open in challenging environments and that could mean fewer canceled or diverted flights, thereby saving time and money.

The work of the Commercial Aviation Safety Team (CAST), which includes representatives from government, industry, and employee groups, has been instrumental in using data to drive decisions. The team’s disciplined and focused approach to analyzing accidents and incidents, identifying precursors, and developing targeted implementation strategies helped to reduce the airline fatal accident rate over 60 percent in the last 10 years. We are also working with this team to develop new targets to more effectively measure performance in commercial aviation safety. 

Finally, we continue our work to expand the growing field of commercial space transportation. In 2006, there were seven commercial launches. We are issuing experimental permits and are now ready to grant safety approvals of commercial space launch and reentry vehicles, safety systems, processes, services and personnel. We met our commercial space launch target and continued improvement of internal processes and partnerships with the Air Force, other government agencies, and the commercial space transportation industry.

Increasing Capacity

While safety is always our primary concern, our mission includes expanding capacity throughout the aviation system – both in the air and on the ground.  The FY 2008 budget requests $3.6 billion to support expansion of capacity on the ground, in the form of new runways, and the continued deployment of new technologies that allow more efficient use of the system.

Given the anticipated growth— both  in terms of passengers, and, critically, in the number of aircraft operations —we know that our services must adapt to meet the demand.  We also know that the complexity of the future operating environment—with evolving fleet mixes, new aircraft, technology, and environmental constraints—must be approached in partnership with our customers. 

The FAA Flight Plan identifies over 50 percent of AIP funding being used to increase capacity and decrease delays at the most congested airports in the country.  These projects include new runways and runway extensions, new airports, and perimeter taxiways which not only improve capacity, but eliminate runway crossings which improves airfield safety.

Every day, our capacity accomplishments, such as Domestic Reduced Vertical Separation Minimum (DRVSM), help provide more economical and efficient aircraft operations. DRVSM created an additional six layers of cruise levels at higher altitudes enabling aircraft to operate at more fuel-efficient cruising altitudes while also increasing system capacity.  Implemented in FY 2005, DRVSM was estimated to yield over $5.3 billion in savings from FY 2005 through FY 2016, but with the rise in jet fuel prices, the savings will exceed $13.4 billion, a 152 percent increase.  

Advanced Technologies and Oceanic Procedures (ATOPs) are now available in 24 million square miles of airspace. Using ATOPS, the Atlantic routes will save airlines 6.5 million pounds of fuel and $8 million per year.

International Leadership

The United States established world leadership in aviation with a consistent commitment to make safety our most important export.  Today, FAA has operational responsibility for about half of the world’s air traffic, certifies more than two-thirds of the world’s large jet aircraft, and provides technical assistance to more than 100 countries to improve their aviation systems.  In FY 2006 alone, FAA provided technical guidance and training to 66 countries and 5 international organizations.  The FY 2008 budget requests $78 million for global connectivity so FAA can be even more globally focused, helping to ensure that U.S. citizens can travel as safely and efficiently around the world as they do at home, and strengthen America’s aviation leadership role in both safety and air traffic control. 

We cooperate with bilateral and multilateral partners in Europe and Asia to negotiate executive agreements and implementation procedures supporting the transfer of aviation products to help lower accident rates in areas that are experiencing substantial growth in operations.  We have also developed initiatives to collaborate with key international partners to implement NextGen technologies globally as they become available to improve aviation safety and capacity.  Last June, the FAA entered into a cooperative agreement with European aviation organizations to participate in each other’s air traffic management modernization programs to harmonize operations.  These efforts are essential to seamless operation of aircraft.

We are also leading the world in the development of both private human spaceflight and commercial spaceports. 

Environmental Stewardship

The FAA is committed to managing aviation’s growth in an environmentally sound manner.  Indeed, NextGen recognizes the need to develop and insert technology to reduce levels of aviation noise and emissions, thereby reducing environment as a constraint on capacity.  The FY 2008 budget requests $354 million to support environmental stewardship for noise mitigation, fuel efficiency, and a comprehensive approach to both noise and emissions.  We are on track to reduce the impacts of airport noise to more than 100,000 people over the next five years through AIP grants in our FY 2008 budget.

In April 2006, the Office of Airports issued its revised environmental guidance handbook.  This handbook is the most recent product in our continuing efforts to meet the streamlining goals of Vision 100 and the President’s Executive Order (13274) on environmental stewardship and streamlining of transportation infrastructure projects.  Recent environmental review for capacity enhancing projects at O’Hare, Dulles, and Philadelphia Airports demonstrated this integration process produces meaningful results.

We are also working with our Center of Excellence for Aircraft Noise and Aviation Emissions Mitigation to foster breakthrough scientific, operations, and program advances.  We call the Center “PARTNER”, and it truly is an excellent partnership of government, academic, and industry participants. – led by MIT.  Our work this year includes Continuous Descent Approaches to airports that can reduce noise, emissions, and fuel use; the feasibility of alternative fuels for aircraft; and assessing fuel burn reduction through enroute optimization.  In FY 2008, with our reauthorization and budget request, we plan to expand PARTNER’s work to develop and certify lower energy, emissions, and noise engine and airframe technology over the next ten years.

Security

While the U.S. Department of Homeland Security’s TSA now has primary responsibility for transportation security, FAA still retains responsibility for the security of its personnel, facilities, equipment and data.  The agency also works closely with TSA and other federal agencies to support aviation security, transportation security, and other national security matters.

FAA ensures the operability of the national airspace, which is essential to the rapid recovery of transportation services in the event of a national crisis.  The budget request includes $246 million to continue upgrading and accrediting facilities, procure and implement additional security systems, enhance IT security, and upgrade Command and Control Communications equipment to meet the increased national security demands that have resulted since the September 11 attacks.

Organizational Excellence

The budget requests $384 million to support our organizational excellence initiatives.

FAA’s progress over the past four years has been steady, as we’ve embraced the vision of the President’s Management Agenda (PMA) and its strategy to improve management throughout the federal government.  Through the Flight Plan and PMA, we’ve made significant gains in human capital, competitive sourcing and consolidations, financial performance -- including controlling costs; and, in terms of accountability to Congress, the taxpayers, and our customers.

Controlling Labor Costs/Pay-for-Performance – Human Capital Reform

We know that labor costs drive a significant share of our budget, and we have been working to slow the rate of growth of these costs, as was evidenced by our efforts in the recent controller negotiations, and our focus on back-filling positions with new employees at lower pay grades when possible. We’re also increasing workforce productivity in several ways and we are on track to achieve cost efficiencies of 10 percent by FY 2010 in controller staff costs.  We achieved the first five percent of this goal in FYs 2005-2006 by reducing staffing standards where appropriate and imposing greater scrutiny of the use of controllers on duties that take them away from controlling traffic. Our budget request assumes we will achieve controller productivity improvements of two percent in both FYs 2007 and 2008. 

Through improved oversight and proactive management of our worker’s compensation caseload we’ve slowed the growth of this program, which has resulted in $5.5 million in avoided costs in FY 2005 and $7 million in FY 2006.  In FY 2007, this effort is expected to yield an additional $7 million in avoided costs. 

I have mentioned in past the ATO’s efforts to streamline its organization.  Over the last several years, ATO reduced its overhead expenses by cutting multiple levels of senior management, reducing its executive ranks by 20 percent.  In addition to the Service Area Consolidation noted above, ATO has used Activity Value Analysis to help streamline its operations, and eliminate and consolidate administrative staffs and support functions. Since FY 2003, the ATO non-safety workforce was reduced by 16 percent.

Much of the efficiencies I’ve noted are the result of the personnel reform that was granted to the agency in 1996.  It has enabled FAA to transition from the traditional General-Schedule pay system to pay for performance. Accountability for results is systemic throughout our organization, with 80 percent of our employees on a pay-for-performance system, including our executives. Flight Plan performance targets must be achieved before annual pay raises are calculated.  The system provides discretion to reward high-performing employees, and incentives are available to ensure that quality work and innovation are rewarded.

In December 2003, we strengthened the approval process for negotiated agreements by requiring, among other things, an analysis of the budget impact of all proposed agreements. 

Smarter Capital Investment Choices and Improved Performance

A capital investment team was created in 2004 to review financial and performance data. The team completes an evaluation of baseline performance and includes associated variances, obligations, schedule milestones and earned value management (EVM) data. EVM will provide an early warning for potential and actual variances as well as help the program manager develop corrective actions.  The members of this team apply a business case approach to each project as the program is assessed.  Since April 2004, over 100 projects have been reviewed.  Seven major projects (a total of $60 million) have been significantly restructured and segmented.  Three projects were terminated.  These changes alone resulted in $460 million in lifecycle savings to FAA.  In the fiscal year 2006 Flight Plan, all of our major capital programs were on schedule and we missed only a single program milestone.  As we move to the NextGen environment, it will be critical to maintain rigorous oversight of our capital investments.

SAVES

The Strategic Sourcing for the Acquisition of Various Equipment and Supplies (SAVES) initiative is an ambitious effort begun in FY 2006 to implement best practices from the private sector in the procurement of administrative supplies, equipment, and IT hardware.  It is expected to achieve $5 million in savings in FY 2007 and annualized savings of $6 million thereafter.

Improved Financial Management Performance

We’re making significant strides in improving our financial management. The Government Accountability Office (GAO) removed us from its high-risk list in 2006, a particular accomplishment since FAA Financial Management had been a high-risk item since 1999.  We also received, for the third year in a row, the Association of Government Accountants’ prestigious Certificate of Excellence in Accountability Reporting (CEAR) for our 2005 Performance and Accountability Report.

Closing

I’ll end where I began.  At FAA, our top priority is safety.  Because of the growth forecasted in air traffic, however, we must also focus significant energy on training and transitioning to a NextGen air transportation system.  Even with new efficiencies, the current system cannot meet future demand.  America’s ability to launch NextGen depends on the enactment of FAA financing and programmatic reform proposals and our FY 2008 budget request which supports them.  I thank you for your time and look forward to discussing both these proposals and our budget request in greater detail today and in the coming weeks.

Statement of

John R. Baxter
Associate Administrator for Federal Lands
Federal Highway Administration
U.S. Department of Transportation

Hearing on

Transportation Issues in Indian Country

Before the

Committee on Indian Affairs
U.S. Senate

July 12, 2007

Chairman Dorgan and Members of the Committee, thank you for the opportunity to testify today on tribal transportation, including the Indian Reservation Roads (IRR) Program and the Federal Highway Administration’s (FHWA) implementation of related SAFETEA-LU provisions.

Introduction

            The IRR system provides access to and within Indian reservations, Indian trust land, restricted Indian land, eligible Indian communities, and Alaska Native villages.  The IRR Program serves over 560 federally-recognized Indian Tribes and Alaska Native villages and currently consists of over 82,000 miles of road, 4,500 bridges, and other transportation facilities.  These facilities link housing, schools, emergency services, and places of employment, as well as facilitate employment and resource use. 

            More than 2 billion vehicle miles are traveled annually on the IRR system, even though it is among the most rudimentary of any transportation network in the United States.  Over 66 percent of the system is unimproved earth and gravel.  Approximately 24 percent of IRR bridges are classified as deficient.  These conditions make it very difficult for residents of tribal communities to travel to hospitals, stores, schools, and employment centers. 

            The poor road quality also affects safety.  Recently, U.S. Secretary of Transportation Mary E. Peters announced that traffic deaths on U.S. roads were down slightly in 2006 according to preliminary figures, but far too many lives continue to be lost.  The annual fatality rate on Indian reservation roads continues to be more than 4 times the national average.  This is a very serious problem.  The Administration is committed to providing safe, efficient transportation for both residents and visitors, for access to and within Indian lands and Alaska Native villages, while protecting the environment and cultural resources.

            The Safe, Accountable, Flexible, Efficient Transportation Equity Act – A Legacy for Users (SAFETEA-LU) includes several provisions to improve the IRR system, with a particular focus on safety.  SAFETEA-LU also strengthens the direct relationship between FHWA and the Tribes, including the authority to enter into direct funding agreement with Tribes and the requirement for FHWA to conduct a National Indian Reservation Road Inventory.

Status of SAFETEA-LU Implementation

FUNDING

Indian Reservations Roads Program

As authorized under SAFETEA-LU, the Federal Lands Highways Program  (FLHP) receives almost a 27 percent increase for the 5-year period of the Act compared to the last five years of Transportation Equity Act for the 21^st Century (TEA-21) -- a total of approximately $4.5 billion over the life of the Act.  Direct transfer of apportioned funds to a Federal agency, upon State request, is now allowed.  FLHP funds also can be used as the State or local match for most types of Federal-aid highway or transit funded projects that provide access to or within Indian lands.

The IRR Program, in particular, received a substantial increase in funding.  IRR Program levels range from $300 million in fiscal year (FY) 2005 to $450 million in FY 2009, for a total of $1.86 billion over the life of the Act.   The funds are distributed according to a formula based on tribal shares, which was implemented through a negotiated rulemaking with tribal governments.  Also, SAFETEA-LU increased the eligible uses of the IRR Program funds by allowing a Tribe to utilize up to 25% of its share of funds for road and bridge maintenance activities.

            SAFETEA-LU also replaces the previous set-aside with a separate authorization totaling $70 million ($14 million per year) for the IRR Bridge Program (IRRBP) to help design and rehabilitate deficient bridges in Indian Country.  Under SAFETEA-LU, the total amount of funding for the IRR Program, including the IRRBP, is $1.93 billion.   This is a 40% increase over the funding provided for a comparable period in TEA-21. 

National Scenic Byways Program

Indian Tribes have participated in the National Scenic Byways Program since its inception under the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA).  From 1992-2005 (prior to SAFETEA-LU), FHWA provided at least $3.4 million for projects on byways with direct tribal involvement or for byways crossing tribal lands.  SAFETEA-LU amended section 162 of title 23, United States Code, to provide the Secretary of Transportation the authority to make grants directly to Indian Tribes and to allow Indian Tribes to nominate Indian roads directly to FHWA (without going through a State department of transportation) for possible designation as a National Scenic Byway or American Road.

FHWA has participated in tribal transportation conferences to inform Tribes of these changes to the National Scenic Byways Program.  FHWA also has worked with the America’s Byways Resource Center (Duluth, MN) to establish a tribal liaison position within the Resource Center.  The liaison started work in May 2007, and will provide technical assistance to Indian Tribes in establishing tribal scenic byways programs and designating roads as Indian Tribe scenic byways. 

In addition, FHWA has modified its grant application procedures so Indian Tribes may submit grant applications directly to FHWA and has included information on tribal participation in the National Scenic Byways Program.  In FY 2006, Tribes submitted five applications directly to FHWA and eight applications through the State departments of transportation, requesting a total of $1.3 million.  The Department selected 12 of the projects, providing a total of $789,816.  Nationwide, FHWA received 417 applications requesting $53.4 million, and $25.5 million was provided for 309 projects.

Public Lands Discretionary Program

            The Public Lands Highway Discretionary (PLHD) program provides funding to any project eligible under title 23, United States Code, that is within, adjacent to, or provides access to Federal public lands.  For FY 2007, there are $87.3 million available for the PLHD program.  In FY 2007, unlike the past several years, projects for PLHD program funding were not designated by Congress. Applications for the PLHD program are being evaluated based on whether the specific project meets the statutory criteria for the program and how well the project addresses the Department’s priorities of improving safety and reducing congestion.   For each application, we will consider the benefit of the safety improvement, the need for the safety improvement, and the likelihood of expediting implementation of the improvement.  A similar analysis will be done for congestion relief.  We are in the process of reviewing applications now, and will be announcing awards this summer. 

SAFETY

Road Safety Audits

In recognition of the need to improve safety on Indian reservation roads, FHWA has conducted several road safety audits (RSA) with Tribes.  An RSA is a formal safety performance examination of transportation systems within a reservation or Alaska Native village and is an effective tool for identifying existing safety issues and eliminating them through improved planning and design. To promote their benefits, FHWA sponsored training on RSAs and Road Safety Fundamentals with four Tribes this past year -- Tohono O’odham and Navajo Nations (in cooperation with the AZ DOT and others), Santa Clara Pueblo and Jemez Springs Pueblo (in cooperation with the NM DOT), and Standing Rock Sioux (in cooperation with ND and SD DOT).  This training specifically targeted local and tribal transportation experts.  A document summarizing the findings and lessons learned will be completed by the end of this year.  Additional RSAs are planned for later this fiscal year. 

Also, FHWA, with the help of the Tribal Technical Assistance Program (TTAP), continues to provide technical assistance and training to Tribes on conducting their own RSAs.  For example, FHWA has provided funding and support to the Northern Plains Tribal Technical Assistance Program to sponsor a Road Safety Audit Outreach Coordinator, who has provided training and RSAs for the Spirit Lake Nation, the Winnebago Nation, and others.

Safe Routes to Schools

The Safe Routes to School program is a federally funded, but State managed and administered grant program established by section 1404 of SAFETEA-LU.  Each State receives not less than $1 million each fiscal year to plan, design, and construct infrastructure-related projects that will improve the ability of students to walk and bicycle to school.  Safe Routes to Schools funding also may be used for non-infrastructure-related activities to encourage walking and bicycling to school.  FHWA has determined that federally recognized Tribes are eligible sub-recipients of this State administered program.  Most States are in the early stages of implementing this new program.  States with high tribal populations, such as those in the Southwest, are reaching out to tribal groups and encouraging them to apply for funding. For example, in Arizona, the Safe Routes to School coordinating committee includes tribal representatives from the Tohono O’odham and Navajo Nations.

High Risk Rural Road Program

SAFETEA-LU established a new safety program, funded as a set-aside at $90 million per year, known as the High Risk Rural Roads Program (HRRRP).  This federally funded, State administered program is intended to reduce fatalities and injuries on small rural roads with above average crash rates.  Tribal roads that meet the criteria for improvements are eligible for the funding.  FHWA has undertaken extensive outreach to Tribes on the HRRRP, including developing and disseminating guidance and making presentations at a variety of conferences, including National and Regional Tribal Transportation Symposia, and Local Technical Assistance Program and TTAP meetings. 

OTHER

Indian Reservation Road Program Changes

SAFETEA-LU made significant changes to the IRR Program and the Federal Transit Program that will greatly assist tribal transportation.  Tribes meeting eligibility requirements now have the option of entering into IRR Program agreements directly with FHWA for their respective share of IRR Program funding.  Section 1119 of SAFETEA-LU amended the IRRBP to allow funding for preliminary engineering activities for the replacement or rehabilitation of structurally deficient or functionally obsolete IRR bridges.  As a result of the changes to the IRRBP, in consultation with the Indian Reservation Roads Coordinating Committee (IRRCC), FHWA issued a notice of proposed rulemaking (NPRM) on June 5, 2007.  The NPRM proposes a number of changes, including an explanation of the priority process for both Bureau of Indian Affairs (BIA) and non-BIA owned bridges, separate queues for both construction and preliminary engineering, and a reduction in the funding ceiling for construction of non-BIA owned bridges. 

Section 1119(k) of SAFETEA-LU allows Tribes and States to enter into road maintenance agreements for which the Tribes assume the maintenance responsibility for the State on Indian Reservation Roads.  These Agreements are negotiated directly between the State and Tribe.  FHWA has provided an annual report to both the Senate and the House in each of the past two years with the results of these agreements. 

Deputy Assistant Secretary for Tribal Government Affairs

Section 1119(l) of SAFETEA-LU requires the Department of Transportation to have, within the Office of the Secretary, a Deputy Assistant Secretary for Tribal Government Affairs appointed by the President.  The duties of the Deputy Assistant Secretary are to plan, coordinate, and implement the Department of Transportation policy and programs serving Indian tribes and tribal organizations and to coordinate tribal transportation programs and activities in all offices and administrations of the Department and to be a participant in any negotiated rulemaking relating to, or having an impact on, any projects, programs, or funding associated with the tribal transportation programs.  Currently, the Deputy Assistant Secretary for Intergovernmental Affairs is carrying out the functions prescribed for the Deputy Assistant Secretary for Tribal Government Affairs, including coordinating tribal transportation programs within the Department.

Direct Funding Agreements with Tribes

In the past, Tribes worked directly with the BIA Regional Offices on IRR programs and projects, either through Direct Service Agreements, Self-Determination Act Contracts, or Self-Governance Agreements, and BIA and FHWA administered the IRR Program with FHWA oversight.  Now, eligible Tribes are able to enter into Referenced Funding Agreements directly with FHWA for their respective share of IRR Program funding to carry out the Tribes’ IRR programs or projects in accordance with the Indian Self-Determination and Education Assistance Act.  While the BIA has retained its program management and oversight role on a national and regional level, these agreements have increased the FHWA-Tribal government relationship on both a program and project level. 

            Under these direct agreements, the amount a Tribe receives equals the amount of funding that the Tribe would otherwise receive in accordance with the formula for distributing IRR Program funds, plus an amount, as determined by the Department of Transportation, that would otherwise be withheld by BIA for program or project administration.  A Tribe assumes all powers, functions, and duties that the Secretary of Interior would have performed and that are not inherently Federal or cannot be transferred.  The agreements identify the roles and responsibilities of each party, as well as the specific work that is to be performed with the funds being received.  A Tribe is eligible to participate if it can provide conclusive evidence of financial stability and management capability during the preceding three fiscal years.  Conclusive evidence exists if the Tribe had no uncorrected significant and material audit exceptions in their annual audits.

        To date, five Tribes have entered into these agreements with FHWA – the Standing Rock Sioux Tribe from North and South Dakota, the Ramah Navajo Chapter from New Mexico, the Chickaloon Native Village from Alaska, the Assiniboine and Sioux Tribes of the Fort Peck Reservation from Montana, and the Oglala Sioux Tribe from South Dakota.  We currently are in negotiations with two additional Tribes and letters of inquiry and interest have been received from several more Tribes.  FHWA and the initial five Tribes are currently working together through this first construction season.  Technical assistance with various phases of existing and new projects, as well as capacity building, is being provided by FHWA.  Together, we and the respective Tribes are dedicated to making these agreements successful.

National Indian Reservation Road Inventory

SAFETEA-LU requires FHWA to complete a comprehensive national IRR inventory of eligible transportation facilities and report to Congress by November 2007 (23 U.S.C. 202(d)(2)(G)).  The purpose of the inventory is to develop the true need and cost for tribal transportation, to ensure that the data in the existing inventory is accurate, and to help streamline the procedures that Tribes utilize for updating their inventory.   The inventory is the most significant factor used to calculate the tribal shares of IRR Program funding.   Hence, it is imperative that a Tribe’s data shown in the inventory be as accurate as possible.   

The inventory includes, at a minimum, all transportation facilities eligible for assistance under the IRR program that a Tribe has requested, including all facilities in the BIA inventory since 1992, facilities constructed or reconstructed with Highway Trust Fund dollars (other than the Mass Transit Account) under the IRR program since 1983, facilities owned by an Indian tribal government, primary access routes, and community streets or bridges within the boundary of a recognized Indian community or reservation or Alaska Native village.

FHWA is nearing completion on the initial task of gathering information for the inventory.  This extensive activity has included reviewing existing data for completeness, carrying out on-site surveys of more than 400 individual sections of road throughout Indian Country to verify correctness of data, addressing and correcting regional and national structural and cost data of the inventory and working with the BIA and Tribes to eliminate the barriers that have caused rejection of data or restriction of tribal input to the existing system.  FHWA, BIA, and the IRRCC have all worked together to eliminate roadblocks and inconsistencies in the current inventory system, to allow easier access to the system, and to develop clearer instructions on actual submission requirements.  In addition, FHWA is working directly with Tribes, BIA, and other State and Federal agencies to collect data on established costs of other eligible facilities not yet included in the existing inventory that are eligible for use of IRR Program funds.  Although these facilities currently are not included in the formula used to calculate the amount of funding that each Tribe receives annually, this data will help in the determination of the true national needs of the tribal transportation systems. 

The fluidity and constant evolvement of the inventory makes this effort a “snapshot” in time and interim in its nature.  For instance, a road may be in the inventory as a gravel surface road, but may be paved in the future.  This change will require the inventory to be updated to reflect this new surface type and other changed conditions.  FHWA plans on updating this national IRR inventory annually as part of a continuing effort of all parties involved to ensure that the national IRR inventory reflects the true needs of tribal transportation, but, more importantly, is equitable and fair for all Tribes.

Outreach

FHWA staff has visited tribal governments over the past several years to see firsthand the transportation infrastructure on reservations and also has met with individual Tribes during the annual National Tribal Transportation Conference.  We have seen and heard about successes and partnerships between Tribes and States, but we also have seen roads and infrastructure that are not at an acceptable level.  FHWA continues to work with numerous tribal and State transportation organizations, the IRRCC, as well as the BIA in carrying out informational meetings and presentations covering many transportation issues and potential funding opportunities in locations across the country.  These meetings and visits give FHWA a valuable perspective on the state of tribal programs and help to identify program strengths and weaknesses.

TTAP continues to be a valuable and popular program with tribal governments.  The purpose of our seven TTAP centers is to foster a safe, efficient, and environmentally sound surface transportation system by improving the skills and increasing the knowledge of local transportation professionals.  This year FHWA re-competed and awarded new cooperative agreements for TTAPs for the California-Nevada and Alaska regions, since the prior agreements expired.  FHWA awarded the California-Nevada region TTAP to the National Indian Justice Center in Santa Rosa, California, and the Alaska TTAP to the University of Alaska Fairbanks Interior-Aleutians campus.  While some have expressed concerns about the change in the TTAP center for Alaska, FHWA is confident that the cooperative agreement will be beneficial for delivering training, technical assistance, and information to Alaska Native Tribes, villages and communities.

            FHWA also participates in research and outreach efforts to gather and disseminate information important to tribal transportation.  Recently, FHWA contributed to the Transportation Research Board’s (TRB) study to provide information useful to tribal governments and Federal, State, and local agencies to help in determining the state of tribal transportation programs and the steps needed to assist Tribes in developing the capacity to perform and manage effectively transportation-related functions.  This effort was authorized by the American Association of State Highway and Transportation Officials (AASHTO), through the National Cooperative Highway Research Program (NCHRP).  TRB published the results of the study May 29, 2007, in a report entitled “NCHRP Synthesis 366, Tribal Transportation Programs: A Synthesis of Highway Practice.”

Conclusion

            Transportation is a critical tool for Tribes to improve the quality of life in their communities.  The challenges facing us are to maintain and improve transportation systems serving Indian lands and Alaska Native villages in order to provide safe and efficient transportation options for residents and access for visitor enjoyment, while at the same time protecting environmentally sensitive lands and cultural resources.  SAFETEA-LU provided tools and resources to improve tribal transportation and the Department is actively implementing these provisions.  We are committed to building more effective day-to-day working relationships with Indian Tribes, reflecting respect for the rights of self-government and self-determination based on principles of tribal sovereignty. 

Mr. Chairman, Senators, thank you again for this opportunity to testify.  I will be pleased to answer any questions you may have.

VADM Thomas J. Barrett, USCG (ret.)
Administrator
Pipeline And Hazardous Materials Safety Administration
United States Department Of Transportation

Before The 110^th Congress
Committee on Commerce, Science and Transportation
United States Senate

January 18, 2007

Chairman Inouye, Vice-Chairman Stevens, Chairman Lautenberg, and distinguished members of the Committee, on behalf of the Secretary of Transportation, I want to thank you for the invitation to appear today. 

I would like to take a moment at the outset to commend the Committee for your leadership and support in passing the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006, Public Law 109-468, which the President signed into law last month.  The PIPES Act will save lives and foster economic growth by strengthening the pipeline safety program.

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is moving ahead to implement the new authority and fulfill the Act’s mandates.  We will keep the Committee informed of our efforts and progress.    

I appear before you today on another important subject:  PHMSA’s activities and role in enhancing hazardous materials transportation security.  

We understand the Committee is considering options to improve commercial surface transportation security, and we look forward to working with the Committee.  Working in close coordination with the Department of Homeland Security (DHS), and with the Department of Transportation’s (DOT’s) Federal Railroad Administration (FRA) and the Federal Motor Carrier Safety Administration (FMCSA), we are moving forward in that effort on several fronts.

When it comes to improving transportation security, we follow a systems risk-based approach, recognizing that safety and security are connected, and that significant safety and economic consequences will flow from our decisions.  The success of our efforts over time lies in our ability to mitigate overall risk, while avoiding undue burdens on transportation systems, operators, and the public.  Effective coordination within the federal government is essential to addressing security concerns in the way that the American public deserves.

Improvement should be developed in a transparent manner, with the benefit of stakeholder input, to produce practical approaches suited to the demands of an economy that depends on the efficient movement of hazardous materials.  We must focus and prioritize our efforts, preventing incidents that pose the greatest overall risk to the public, property, and the environment, and mitigating the consequences of incidents that cannot be prevented.

Multi-modal Hazardous Materials Program

Hazardous materials are essential to our citizens, and to our economy.  These materials fuel automobiles, heat and cool our homes and offices, and are used in farming, medical applications, manufacturing, mining, and other industrial processes.   More than 3 billion tons of regulated hazardous materials – including explosive, poisonous, corrosive, flammable, and radioactive materials – are transported each year. 

We oversee the safe and secure shipment of over 1.2 million daily movements of hazardous materials moving through the air; on the railroads, seas and waterways; and over the highways.  Many of these shipments require transfer between modes.  Programs that increase the security of highway infrastructure and intermodal transfer points are required to maintain the security and safety of these movements.  Additionally, large volumes of hazmat are moved by pipelines out of the view of most Americans.

These hazardous materials shipments frequently move through densely populated or sensitive areas where an incident could result in loss of life, serious injury, or significant environmental damage.  Our communities, particularly the public and workers engaged in hazardous materials commerce, count on the safe and secure transport of these shipments.

Post-9/11 Hazmat Security Requirements

With Congress’ active assistance and direction, much progress has been made since 9/11 to improve the security of our transportation systems.  Congress confirmed PHMSA’s role in the Homeland Security Act of 2002, when it amended Federal law to clarify the agency’s responsibility for the “safety, including security,” of hazardous materials transportation.

In 2003, we amended the Hazardous Materials Regulations to require shippers and carriers of certain hazardous materials to develop and implement security plans.  The regulations established a general baseline for the development and scope of plans, rather than a prescriptive list of specific security measures.  Each security plan must include an individualized risk assessment and, at a minimum, address personnel security, unauthorized access, and en route security risks.  Plans must be appropriate to the company’s individual circumstances, considering the types and amounts of hazardous materials shipped or transported and the modes used for transportation.  The regulation establishes a meaningful performance standard for security planning, while providing shippers and carriers with the flexibility necessary to develop security measures addressing their individual circumstances and operational environments.

DOT regulated pipeline operators are subject to different security planning standards, also requiring the development of site-specific security plans.  Most pipeline operators follow a set of consensus guidelines that were jointly developed by PHMSA, pipeline operators, and State pipeline safety agencies following the 9/11 terrorist attacks.  The security requirements governing operators of liquefied natural gas (LNG) facilities predate 9/11 and are enforced, along with our other LNG safety standards, by PHMSA and our State partners. 

As the Committee is aware, PHMSA also has been actively involved in government-wide security planning and coordination efforts led by DHS. In accordance Homeland Security Presidential Directives and Executive Orders, we regularly provide technical expertise and consultation on security initiatives with DOT partners in the areas of pipeline operations and hazardous materials transportation.  We contributed to the recently-completed National Infrastructure Protection Plan and participate in the Government Coordinating Councils for the Rail, Highway, Chemical and Pipeline sectors.

The PHMSA-TSA Security Annex

Most recently, PHMSA and the Transportation Security Administration (TSA) have established a joint working group to improve interagency coordination on transportation security and safety matters, and to develop and advance plans for improving transportation security.  As you know, PHMSA and TSA signed an Annex to the Departmental Memorandum of Understanding (MOU) executed by DOT and DHS.  The Annex recognizes TSA’s lead role in transportation security and reflects the agencies’ shared commitment to a systems risk-based approach and to the development of practical solutions, recognizing that each agency brings core competencies, legal authority, resources, and expertise to this shared mission. 

In entering into the Annex, PHMSA and TSA pledge to build on and not duplicate the various security initiatives and efforts already underway.  At the same time, we thought it was important to outline the key program elements and approaches necessary to effective Federal action and to use that framework to identify specific areas for improvement.

Enhancing security requires that we start with the data – understanding the problem and identifying any gaps in existing solutions, including gaps in understanding the risks and consequences of incidents.  PHMSA’s technical staff has knowledge about hazardous materials and transportation systems that can and should be brought to bear in the Federal effort to enhance security. 

The joint agency working group established under the PHMSA-TSA MOU Annex is looking at ways to leverage the information that each agency possesses and collects.  We are doing this in order to enhance our understanding of all risks connected with hazardous materials transportation and to bring that information to bear on an ongoing basis in all elements of our safety and security programs.

Under Executive Order 13416 and as delineated in the Annex, PHMSA and TSA are looking for ways to improve standards, recognizing that solutions need to be tailored to risks and transportation needs, both of which will change over time.  Enhancing transportation security does not necessarily mean that we must impose regulatory requirements.  We must be open to the range of possible solutions, driven by information about systems risks and security gaps. 

Where it is appropriate to impose new standards, close coordination and consultation between the agencies – and active outreach with stakeholders – will help to ensure effective results.  Better communication and outreach with affected stakeholders are important elements of the approach to enhancing transportation security reflected in the MOU Annex.

Inspection and enforcement also present opportunities for improvement.  PHMSA and TSA are looking for ways to maximize the use of Federal resources by cooperating in these efforts.

Research and development are important parts of a coordinated Federal strategy.  Our joint agency working group will put in place measures to ensure that we are making the best use of Federal resources by sharing research results and collaborating in the development of future projects.

Pending Improvements 

Working with our DOT colleagues and TSA, we continue to consider ways to enhance the transportation security of hazardous materials.  Last month, PHMSA and FRA issued a notice of proposed rulemaking (NPRM), proposing to revise current requirements applicable to the safe and secure transportation of hazardous materials by rail.  Specifically, we are proposing to require rail carriers to compile annual data on specified shipments of hazardous materials, use the data to analyze safety and security risks along rail routes, assess alternative routing options, and make routing decisions based on those assessments. 

The same notice proposes clarifications of the current security plan requirements to address enroute storage, delays in transit, delivery notification, and additional security inspection requirements for hazardous materials shipments.  We have planned two meetings in early February, one here in Washington and one in Dallas, to solicit public input on the rail security proposals.

In consultation with the other DOT operating administrations and TSA, we also are taking a close look at the scope of our hazmat security plan requirements.  In the three years since the requirements went into effect, we have gained experience evaluating security risks associated with specific hazardous materials and transportation environments and identifying appropriate measures to address those risks.  In response to two industry petitions for rulemaking, PHMSA recently initiated a project to reconsider and refine the list of hazardous materials for which security plans are currently required.  The industry petitioners asked PHMSA to amend the security plan regulations to create a distinction between hazardous materials that present a significant security risk while in transportation and the vast majority of hazardous materials that pose minimal security risks in transportation.  To this end, we have initiated a rulemaking project, in cooperation with the DOT operating administrations and TSA; we published an ANPRM on September 21, 2006, and hosted a public meeting on November 30.  We expect to issue a proposal by early summer of 2007.

As we refine our understanding of system risks, we’ve also taken a careful look at how we regulate access to PHMSA’s National Pipeline Mapping System (NPMS).  The NPMS is a comprehensive database including geospatial and other information about all PHMSA-regulated liquid and natural gas pipelines and their relationship to populated and unusually sensitive environmental areas.  In the immediate aftermath of 9/11, we pulled the NPMS from the agency’s website and restricted public access out of concern that information in the system could be used in planning or targeting a terrorist attack.  In the meantime, we have taken a careful look at the nature and quality of publicly available information about pipeline facilities and the safety and security implications of providing public access.  We have discussed the issues with DHS and all pipeline stakeholders, safety advocates, and security experts, and we have developed an approach that we believe will minimize risk, while satisfying legitimate public right-to-know concerns. 

I would like to mention that in the coming months, PHMSA will be rolling out changes to its NPMS website that will permit members of the public to access certain maps and data on a county-by-county basis.  The level of detail accessible to the public will make the site useful for emergency response and local planning efforts, helping communities manage risks of development and other human activities near existing pipelines. 

Our decision to restore public access to NPMS data illustrates how a data-driven, systems risk-based approach improves risk mitigation.  From a systems risk perspective, public access to information is desirable, because it facilitates environmental protection, emergency response, and safety-conscious land use planning.  Further, this determination may pave the way for making NPMS data available in efforts to reduce other transportation risks.  As we move ahead on the rail routing rulemaking, for instance, we will consider whether access to NPMS data concerning environmentally sensitive areas may be useful in making safety and security conscious rail routing decisions. 

With Congress’ support, a systems risk-based approach will be carried forward through the Hazardous Materials Cooperative Research Program, now in its first year of program management by the Transportation Research Board of the National Academies.  Four initial research projects recently cleared the selection process.  They are:  (1) Hazmat Commodity Flow Guidance to States and Localities; (2) Enhanced Incident Data Quality for Root Cause Analysis; (3) Assessing Hazmat Emergency Response Capabilities; and (4) Emerging Technologies Applicable to Hazmat Transportation Safety and Security.  PHMSA is closely monitoring the progress of that research.

Finally, like Congress, we are focused on improving the ability of States and local governments to prepare for and respond to hazardous materials incidents, whatever their cause.  PHMSA is proud of its partnerships with the National Association of State Fire Marshals, the International Association of Fire Chiefs, and the International Association of Fire Fighters.  Each organization has assisted in capability building across the country. 

At the end of this month, PHMSA and the National Association of State Fire Marshals will co-sponsor another meeting of emergency responders, hazardous materials industry representatives, and pipeline operators.  This joint effort covers a variety of initiatives intended to strengthen response capabilities and preparedness, including a recent PHMSA Advisory Bulletin on the appropriate response to ethanol spills and plans for the 2008 edition of the Emergency Response Guidebook (ERG).  PHMSA publishes and distributes the ERG free of charge to the nation’s first responder community.  For years, the ERG has been an important resource for first responders, providing critical guidance during the initial phase of a hazardous materials incident.  For the first time, the 2008 ERG will be expanded to include a response section applicable to pipeline incidents.

CLOSING

Like Secretary Peters, PHMSA takes very seriously our responsibility to ensure the safe and secure movement of hazardous materials across our transportation system.  Although we recognize that there is always room for improvement, we believe that we have a strong regulatory framework in place for hazardous materials transportation security.  Together with DHS, we seek to achieve the highest level of safety and security possible, while at the same time, minimizing the burden and associated cost. 

We look forward to working with the Members of this Committee, the Congress and our stakeholders as we embark on a serious and open discussion with all interested parties to further enhance the safe and secure transportation of hazardous materials.

Mr. Chairman, I commend you and the members of this Committee for your leadership on this very important topic.  Thank you again for this opportunity today.  I am happy to take your questions.

###

STATEMENT OF

THERESE W. MCMILLAN
DEPUTY ADMINISTRATOR
FEDERAL TRANSIT ADMINISTRATION
UNITED STATES DEPARTMENT OF TRANSPORTATION

BEFORE THE

 SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE

November 6, 2013

Chairman Nelson, Ranking Member Collins, and Members of the Committee:

Thank you for the opportunity to discuss the Administration’s efforts to address the transportation and mobility needs of today’s seniors living in urban, suburban, and rural communities around the nation, and to anticipate the related economic and social challenges that an aging America poses for our nation as a whole. This is an issue that cuts across party lines and geographic boundaries, as the majority of us will one day confront the health care and quality of life issues that are a natural part of the aging process, even as many of us wrestle today with caring for an aging loved one.

Our nation is undergoing a significant demographic shift that will profoundly affect our policies and priorities for years to come. By 2050, the number of Americans aged 65 and older is projected to more than double, from 40.2 million in 2010 to 88.5 million in 2050, and in particular, the number of men and women 85 and older is expected to increase fivefold by mid-century. The states with the fastest-growing percentage of older residents over the next two decades will see that growth in both urban and rural communities, from California to Texas, Florida to Virginia, and Maine. The challenges facing this population are significant. For instance, U.S. Census data indicate that nearly half of rural elders live below 200 percent of the federal poverty level, compared to roughly one-third of urban residents. Many seniors combat isolation and struggle to obtain access to medical care and other vital social services, especially in geographically dispersed areas. And yet while many elderly people face similar challenges, strategies to address the needs of elderly populations in rural and urban settings are not identical; there is no one-size-fits-all solution.

The Role of Federally Coordinated Transportation to Address Elders’ Needs

Challenges such as these require a carefully coordinated continuum of services at the federal, state, and local level, involving both public and private resources. Transportation, in particular, cuts across every aspect of elder care, from health care and housing to employment and social activities. Transportation is an indisputable lifeline for aging Americans in urban and rural settings alike, and is therefore a major focus of federally coordinated efforts. Nearly one in five Americans over the age of 70 does not hold a driver’s license, and those who do drive benefit from enhanced road safety provisions that also protect the rest of the driving public. As older residents cut back on or relinquish driving, they still need to stay connected to their communities, access healthcare services, and other destinations.  Transportation can foster livable communities, allowing residents safe and convenient ways to travel by automobile, foot, bicycle, and transit for everyone in the community regardless of age or ability.

The U.S. Department of Transportation (DOT) is committed to taking into account the mobility needs of aging Americans across its core programs and in coordination with other federal departments. Specifically, the Federal Interagency Coordinating Council on Access and Mobility (CCAM), which is chaired by the U.S. Secretary of Transportation, includes representatives from 11 federal agencies, including the U.S. Departments of Health and Human Services, Labor, and Education. The CCAM’s mission focuses on developing and implementing initiatives that improve mobility and community accessibility for seniors, individuals with disabilities, and low-income individuals and their families. The CCAM’s Strategic Action Plan encourages the creation and growth of coordinated transportation networks that provide streamlined access to health and wellness care, jobs, and community services. The plan’s objectives range from improving health outcomes by enhancing coordination of transportation services to promoting local business, economic, and transportation partnerships on behalf of seniors, dislocated workers, and others seeking to rejoin the workforce and access economic opportunities and training.

The most significant CCAM-led outcome in the Obama Administration is the Veterans Transportation and Community Living Initiative. This initiative, launched in Fiscal Year (FY) 2011, and led by the DOT’s Federal Transit Administration (FTA), in collaboration with the U.S. Department of Veterans Affairs, the U.S. Department of Health and Human Services (HHS), and the Department of Labor, benefits all users of public transportation resources, including veterans, people with disabilities, and seniors. It particularly addresses the Administration’s challenge to improve access to jobs and services for America’s military veterans and members of the Armed Forces returning from Iraq and Afghanistan, along with their families. The Veterans Initiative has committed over $63 million in competitive grant funds for 86 innovative projects in 38 states, the Northern Mariana Islands, and Guam that help communities to develop or enhance one-call/one-click access to locally coordinated transportation services, ranging from fixed-route buses to on-demand paratransit taxi service.

For example, the Veterans Initiative awarded $1.4 million to Lee County, Florida, to enable the installation of new information kiosks at a new Department of Veterans Administration outpatient clinic in Cape Coral and other locations, where veterans—many of them elderly—will eventually be able to readily obtain real-time information on transit rides and schedules, day or night.

Another important CCAM accomplishment is the United We Ride initiative, which improves the availability, quality, and efficient delivery of transportation services for older adults, people with disabilities, and low-income individuals and families. Established in 2004, United We Ride has been a driver of the movement toward inclusive planning of transportation services, pushing for communities to ensure that the people using these systems, including older Americans, have a say in how and where they are developed. Under FTA’s direction, this high-profile initiative encourages states to integrate transportation and social service needs in major urban areas as well as improve citizens’ access at the local level to federally funded programs such as Medicaid, aging assistance, workforce training, and other services. The initiative emphasizes coordination that cuts across providers. For example, if there is room for a Medicaid beneficiary on a bus or van operated by the local Administration on Aging bus or van (which in turn benefits from federal transportation dollars awarded to the state), the passenger can hop aboard.

CCAM members are also moving forward to help ensure that transportation assets are efficiently deployed to help evacuate those without personal transportation resources in times of emergency, and to clarify policies on vehicle sharing and cost sharing between federally funded agencies to facilitate collaborative use of transportation assets on the ground.  Progress in this area is important in light of devastating disasters such as Hurricanes Katrina and Sandy.

 Outside of the CCAM, at the DOT modal level, many efforts are under way to continue to adapt programs and policies to the needs and concerns of seniors. For example, the Federal Highway Administration (FHWA) is working to make roads safer for older users through various initiatives, including a revised design handbook specifically addressing the needs of older drivers and pedestrians, approving the use of enhanced fonts to increase legibility on road signs, and making roadway crossings safer for pedestrians of all ages and abilities. FHWA also encourages States and local planning organizations to use the full range of existing design flexibility to identify and adopt safe and convenient designs for all pedestrians and bicyclists, particularly in urban areas.

The National Highway Traffic Safety Administration (NHTSA) has also published draft guidance for states to use in addressing older driver safety, including guidance on driver licensing and medical review of at-risk drivers and collaboration with social services and transportation service providers. NHTSA has also solicited and received comments on potential modifications to the New Car Assessment Program, including comments on a potential Silver Car Rating System for Older Occupants, which would help older people identify and select vehicles that would potentially be safer for them.

Progress to Strengthen Public Transportation Coordination and Access

FTA has long addressed the mobility needs of seniors as part of a broader strategy that seeks to invest in transportation choices to meet the needs of citizens at every stage of life. Indeed, activities addressing seniors’ mobility management needs are eligible expenses under FTA’s transit assistance programs, with an 80 percent FTA share. The remaining 20 percent in matching funds can be drawn from non-DOT federally funded programs that involve older Americans, Medicaid recipients, those with developmental disabilities, work force investment programs, Department of Housing and Urban Development (HUD) programs, Head Start, and more. Providing access to affordable public transit is especially important to the growing number of older citizens who prefer to maintain independence while remaining connected to their communities. FTA has funded a number of initiatives, and collaborated successfully with non-federal partners, to improve access to transit—and improve the coordination of federal, state, and local resources—in ways that benefit the elderly as well as other populations needing more and better access to transportation choices. These efforts leverage federal investments through private partnerships and cooperative agreements, with new and strengthened programs shaped by MAP-21.

MAP-21 Enhances Funding, Services for Disadvantaged Populations

MAP-21, the two-year transportation authorization that is effective through FY 2014, empowers FTA to implement many bold new policies that strengthen and streamline public transportation for the nation’s most vulnerable populations, including the elderly. For example, MAP-21 provides $28 million more in FY 2013 for the Section 5310 Enhanced Mobility of Seniors and Individuals with Disabilities Program than SAFETEA-LU provided in FY 2012 for the Section 5317 New Freedom Program and the Elderly and Individuals with Disabilities Section 5310 Program combined. Projects for this program are developed through a community-based, coordinated planning process that must involve older adults at the outset. Such activities are an eligible capital expense under FTA’s transit assistance programs, with an 80 percent FTA share and the remainder from non-DOT sources. This program also leverages private-sector resources.  For example, taxicabs that meet the Americans with Disabilities Act (ADA) accessibility requirements are now an eligible expense under this program. Accessible taxis offer many communities greater flexibility, and cost savings, over traditional transit agency paratransit service. In cities such as Houston, TX; Madison, WI; and Daytona Beach, FL, these services have been well received.

Under MAP-21, FTA also provides funding to technical assistance centers, including the National Center for Senior Transportation and the new National Center for Mobility Management, both of which provide research and technical assistance resources to support transportation options for older adults.

In addition, FTA’s 5311 Rural Areas Formula Grant program under MAP-21 increases spending on rural transportation by approximately 25 percent over the previous authorization (SAFETEA-LU), providing capital, planning, and operating assistance to in areas with fewer than 50,000 residents. Total funding is $600 million in FY 2013 and $608 million in FY 2014.  The program includes $60 million in funds over two years specifically for Tribal transit, which is also key to reaching elderly citizens. 

Cooperative Agreements Strengthen Local Coordination, Innovation

FTA has further leveraged federal investments through local nonprofit partnerships with entities such as Easter Seals Project Action, whose mission is to promote universal access to transportation for people with disabilities, including the elderly. One of the most pivotal partnerships is the National Center for Mobility Management, which engages FTA with the American Public Transportation Association (APTA), the Community Transportation Association of America (CTAA), and the Easter Seals Transportation Group—all industry leaders in fostering and strengthening access to transportation choices serving diverse communities. This new Center will extend FTA’s outreach by helping communities to adopt transportation strategies and mobility options that foster independent living, self-sufficiency, and promote healthy outcomes for older citizens and others. For example, the Center will develop a database that identifies and documents best practices on mobility management. It will also support FTA’s grantees and other partners in adopting proven, sustainable, and replicable transportation coordination, mobility management and one-call/one-click transportation information services.

Through the United We Ride initiative, FTA also supports technical assistance centers such as the National Center for Senior Transportation, jointly operated by Easter Seals and the National Association of Area Agencies on Aging, and funded, in part, with $1.8 million from FTA in FY 2011 and FY 2012. The Center is a collaborative effort with the HHS Administration on Aging and is instrumental in assessing the real transportation needs of older adults and delivering appropriate technical assistance and training (such as travel training, which helps seniors and others learn how to navigate their transit systems); volunteer transportation resources and training; and new tools and resources to connect seniors with accessible transportation.

Mobility Management

Mobility management improves customer service by developing partnerships among transportation providers to expand the range of viable transportation options within communities. Mobility management programs, funded by combinations of federal, state, local, and nonprofit resources, often target the needs of seniors, people with disabilities and low-income families. FTA has a long-standing tradition of supporting the evolution and proliferation of mobility management programs.

The National Center for Mobility Management, referenced above, is the newest component of FTA’s ongoing commitment to community-based mobility management programs that often target the needs of seniors, people with disabilities, and low-income families. The majority of FTA formula-based programs under MAP-21 can fund mobility management expenses, including, for example, one-call centers, travel navigators and trainers, and local trip-planning services. In FY2012, FTA programs provided over $40 million in funding for mobility management projects—a four percent increase over FY 2011 funding of $38 million. Since 2006, when mobility management became an eligible capital expense in FTA’s formula programs, total annual spending for this activity has grown from just $300,000 to over $40 million. The impacts of these investments are both strengthening and extending FTA’s reach and ability to improve access to transit services at the community level. For example, the effort has enabled APTA to work with CTAA on a five-year strategic plan promoting mobility management in the transit industry nationwide; develop a national education program and materials; and make a business case for local mobility managers. Today, there are over 400 mobility managers operating across the country. Over half the states are planning or implementing one-call centers in urban or rural areas.

Programs and initiatives such as these go a long way to help communities assess specific needs to fill gaps in transportation for seniors and others. Determining the appropriate range of options, based on demographic and socioeconomic needs of a particular community, is important to enhancing choices for all residents. The ride-sharing and volunteer driver programs that work in one community may not be the right fit for other communities where fixed-route service is abundant, as it is in urban areas. Very importantly, seniors and others simply may not know what services and transportation options are available to them and do not know how to connect to them.  That’s why we need to vigorously develop nationwide transportation one-call-/one-click centers that can successfully connect older adults and others to the rides they need.  We need to continue advocating for the formation of these centers and use of technology, along with replicating the presence of mobility managers across the country. 

By coordinating access to and information about transportation choices, reducing duplication of services, and generally increasing the efficiency of our transportation networks, FTA can help to maximize the impact of taxpayer dollars.

Barriers and Challenges to Future Progress

DOT has made tremendous progress working within and across agencies to improve coordinated access to transportation for seniors and disadvantaged populations, but barriers related to funding and coordination remain. With respect to coordination generally, in 2011, the Government Accountability Office identified 80 federal programs as having great potential to be coordinated and maximized through the United We Ride initiative, to help “transportation-disadvantaged” populations. But there are legal barriers to maximizing this potential. In order to make the most of each federal dollar and reduce duplication of services, the various players in the transportation sphere, from any part of the federal government, should be required to take part in coordinated planning efforts guided by the populations served. That level of cross-cutting coordination is not now in place. Moreover, some human service agencies still do not coordinate their services with others.  States, in particular, need to analyze these impacts on overall delivery of transportation services that older adults depend on.  Only by truly working together can we make the most of our efforts. In the meantime, as a result of these barriers, many seniors may be left unserved or underserved, even if local transportation providers have the capacity to serve them.

Effective coordination is key to this effort, and will continue to require hard work at the local level to change traditions, attitudes, and relationships among the many community organizations and agencies that provide human service transportation.  Fortunately, there are a growing number of states and local communities that have embraced this notion. DOT is committed to working with our partners at every level to share best practices and to help break down the remaining barriers to effective coordination.  We want to maximize independence and economic opportunity by providing the most cost effective and most appropriate rides for those in need. 

Our best efforts at coordination, however, are only successful to the degree that actual programs can be implemented and sustained. Notably, significant funding reductions beginning in FY 2013 have reduced FTA’s ability to promote transportation coordination through its technical assistance centers.

These funding challenges must also be viewed in the context of rising demand for public transit services, which are at their highest level in over half a century. In addition to making do with less, communities around the country continue to submit proposals for federally funded capital transit projects that far exceed FTA’s available resources; demand greatly outstrips supply. Additionally, the largest and oldest transit systems around the nation are in desperate need of billions of dollars in postponed maintenance and modernization. Yet as our population ages, we cannot afford the social costs of ignoring the transportation needs of older Americans. We must find ways to continue investing in transit services that provide safe, reliable rides. These are challenges that the executive and legislative branches of government must solve together if we are to preserve a lifecycle of services—and mobility choices—that Americans need at every stage of life.

We at FTA look forward to working with members of this special committee, along with our federal, state, and local partners, to meet the needs and address the challenges of America’s aging population.

Mr. Chairman, this concludes my testimony and I would be happy to answer any questions.

STATEMENT OF

THE HONORABLE RAY LAHOOD
SECRETARY OF TRANSPORTATION

BEFORE THE

COMMITTEE ON ENVIRONMENT & PUBLIC WORKS
U.S. SENATE

HEARING ON

THE NEED FOR TRANSPORTATION INVESTMENT

MARCH 25, 2009

Chairman Boxer, Ranking Member Inhofe, and Members of the Committee, thank you for holding this hearing to discuss transportation investment needs.  Today, I will focus primarily on the funding required to maintain and improve the condition and the performance of our Nation's highway system.

America’s transportation systems are the lifeblood of our economy and when properly maintained and supported can be a catalyst for economic growth.  These systems allow people to get to jobs and allow businesses to access wider pools of labor, suppliers, and customers.  The ability to efficiently move freight will be critical to our economic recovery.  Without efficient transportation routes, economies stagnate.  We need to protect, preserve, and invest in our transportation infrastructure to ensure it can meet our present and future demands.  Above all, we must make our roadways safe for all travelers.  Where public safety is concerned, there is no room for compromise.

INFRASTRUCTURE INVESTMENT NEEDS

As you know, less than one month after taking office, on February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA).  I want to thank Congress for its support in adopting this important legislation, and in particular for the vital transportation funding that it provides to both help bring about economic recovery and make lasting investments in our infrastructure.  I would also like to thank Senator Boxer and Senator Inhofe for their leadership in working with the Appropriations Committee to craft the highway funding portion of this bill.

The resources made available for transportation infrastructure through ARRA are significant and a good start on what we need to do to address some of our most significant challenges:  reducing the tens of thousands of transportation-related fatalities each year, reducing the impact of our transportation sector on the environment, improving our existing highway and bridge infrastructure, ensuring mobility and transportation choices for travelers in congested metropolitan regions, and preparing our transportation systems for future growth in commerce.   These needs will continue to exist long after the recovery funds are expended, and dealing with them will result in the creation and preservation of many jobs for years to come.

Without renewal and restoration, our transportation infrastructure will not be able to support the needs of a growing economy.  That is why now—perhaps more than ever—it is critical and timely that we address our aging infrastructure:  bridges, pavement, tunnels, retaining walls, culverts, and signs.  Nationally, our bridges are on average 44 years old.  Significant portions of our National Highway System (NHS) are nearing the end of their useful life, including much of the Interstate Highway System, some of which is already over 50 years old.  These key transportation assets must receive critical attention over the next few years.

We must devote resources to not only preserve and improve our existing assets, but also to increase the capacity of our networks to efficiently move goods and people, using new construction where needed, innovative technology, and operational improvements.  Transportation agencies must make decisions based on asset management concepts and principles in order to maintain our existing infrastructure, while we continue to address the need for new facilities and transportation options.  These asset management tools provide a framework for making cost-effective decisions that enhance service at reduced cost over a facility's life.

CONDITIONS AND PERFORMANCE REPORT

Section 502(h) of title 23, United States Code, requires the Secretary of Transportation to submit to the Congress every two years a report that describes “estimates of the future highway, transit, and bridge needs of the United States” and “the backlog of current highway, transit, and bridge needs.”  This is the “Status of the Nation’s Highways, Bridges and Transit: Conditions and Performance” report, commonly known as the Conditions and Performance (C&P) Report.  The 2006 C&P Report was the eighteenth in the series, which dates back to 1968.  Since 1993, the Federal Highway Administration (FHWA) has partnered with the Federal Transit Administration (FTA) to produce a C&P Report that contains both highway and transit data.

While awaiting the release of the 2008 edition of the C&P Report, we can draw some conclusions about the conditions and performance of the Nation’s highway and bridge infrastructure based on data published in the 2006 edition of the report.

Placing 2006 C&P Findings into Context

At the heart of the C&P Report are a series of highway, bridge, and transit investment/performance analyses examining the potential impacts of alternative levels of future combined public and private capital spending for a 20-year period.  While this 2006 report examined a range of alternative funding levels for highways and bridges, two illustrative scenarios were selected for further exploration and presentation in more detail.  The Cost to Maintain Highways and Bridges scenario was designed to show the investment required to keep future indicators of conditions and performance at current levels, based on long-term projections of future highway use.  The Maximum Economic Investment (Cost to Improve) Highways and Bridges scenario was intended to define the upper limit of cost-beneficial national investment based on engineering and economic criteria.  It is important to note that the report does not endorse either of these scenarios, and does not address questions as to what future Federal transportation programs should look like, or what level of future surface transportation funding can or should be provided by the Federal government.  Nor does it assess whether it is practical or even possible to achieve the theoretical results posited in the report.  The intent of this report is to provide the Congress with an objective appraisal of the current and potential future state of the Nation’s highways, bridges, and transit, rather than to recommend a particular course of action.  

It is also important to note that the future capital investment scenarios described in the 2006 edition of the Conditions and Performance report were stated in constant 2004 dollars, reflecting the costs of highway construction materials in that year.  However, there have been significant increases in construction materials costs since 2004 that would affect the costs of achieving the goals identified for those scenarios.  The FHWA Composite Bid Price Index increased by 43.3 percent between 2004 and 2006 due to sharp increases in the prices of materials such as steel, asphalt, and cement.  While other relevant indices have shown smaller increases, it is clear that today's construction materials costs are at least 30 percent higher than those in 2004.  For example, the Bureau of Labor Statistics Producer Price Index for Highway and Street Construction increased by 31.9 percent from 2004 to 2007; after peaking in July of 2008, as of February 2009 this index has fallen back to 2007 levels.

The average annual Cost to Maintain Highways and Bridges identified in the 2006 C&P Report was $78.8 billion in constant 2004 dollars.  If we factor in construction cost inflation of approximately 30 percent since 2004, the estimate of the average annual Cost to Maintain increases to at least $100 billion.  The estimated average annual Maximum Economic Investment level for Highway and Bridges was $131.7 billion in constant 2004 dollars.  If we adjust for estimated inflation since 2004, the average annual Maximum Economic Investment level increases to approximately $170 billion.  To put these numbers in perspective, the total amount spent by all levels of government for highway capital improvements was $70.3 billion in 2004 and $78.7 billion in 2006.  This suggests that the gap between actual spending and the investment needed to maintain the conditions and performance of the Nation’s highways and bridges has significantly widened since 2004.  

The 2006 report also includes a set of supplemental analyses exploring alternatives for improving the future operation of the highway system, including accelerating the implementation of various operations strategies and intelligent transportation systems, as well as the widespread adoption of congestion pricing.  The report found that applying variable tolls to all congested highways could reduce the need for highway capacity additions so that the Cost to Maintain the physical conditions and operational performance of highways and bridges at 2004 levels could, under certain scenarios, be reduced by 27.5 percent, and the Maximum Economic Investment level for Highways and Bridges could be reduced by 15.9 percent.  This alternative analysis was presented as a hypothetical scenario, and did not attempt to fully explore the numerous technical issues and societal implications that would need to be addressed before implementing any such congestion pricing system.  The 2006 report also did not project the potential impact that highway congestion pricing might have on transit ridership and long term transit capital investment needs. 

Infrastructure Conditions and Performance

Since enactment of the Transportation Equity Act for the 21^st Century (TEA-21) in 1998, combined investment by all levels of government in highway and bridge infrastructure has increased significantly.  Highway capital spending alone rose from $48.4 billion in 1997 to $78.7 billion in 2006, a 62.7 percent increase.  However, recent sharp increases in highway construction costs have eroded the purchasing power of this investment; in constant dollar terms, capital spending fell by 4.4 percent over this period.

Over the last fifteen years, there has been a noticeable shift in the types of capital improvements made by State and local governments.  During this time, State and local governments redirected their investments toward “system rehabilitation” projects (the resurfacing, rehabilitation, or reconstruction of existing highway lanes and bridges).  The portion of capital investment going for system rehabilitation increased from 47.6 percent in 1997 to 51.3 percent in 2006, while the percentage directed towards system expansion (such as the widening of roads and the construction of new facilities) declined.

This increased system rehabilitation investment since 1997 has had a positive effect on the physical condition of key components of the Nation’s highway and bridge infrastructure.  The NHS includes those roads that are most important to interstate travel, economic growth, and national defense.  While the NHS makes up only 4.1 percent of total mileage, it carries 44.8 percent of total travel in the United States.  The percentage of NHS vehicle miles traveled (VMT) on pavements with “good” ride quality rose from 39 percent in 1997 to 57 percent in 2006.  The share of NHS VMT on roads with “acceptable” ride quality (a less rigorous standard that also includes roads classified as “good”) also increased over this period, from 89 percent to 93 percent.

Looking beyond the NHS, however, we find that pavement condition on other arterial and collector roads has not shown as much improvement.  In urbanized areas, pavement condition has actually declined.

The number of NHS bridges classified as deficient declined from 33,558 or 26.1 percent in 1997 to 25,674 or 22.3 percent in 2006.  Deficient bridges are "structurally deficient" or "functionally obsolete" or both.  "Structurally deficient" means significant load carrying elements are found to be in poor or worse condition due to deterioration or damage, or the adequacy of the waterway opening provided by the bridge is determined to be insufficient to the point of causing overtopping with intolerable traffic interruptions. "Structurally deficient" does not mean the bridge is unsafe.  Unsafe bridges are closed.  "Functionally obsolete" means the deck geometry, load-carrying capacity, clearance or approach roadway alignment of the bridge no longer meets the criteria of the system of which they are a part.  About three-quarters (19,337) of deficiencies on NHS bridges relate to functional obsolescence rather than to structural issues (6,337), as many NHS bridges are narrower than current design standards would call for given the traffic volumes they currently carry. 

The number of all bridges classified as deficient dropped from 190,703 or 32.7 percent in 1997 to 164,826 or 27.6 percent in 2006.  Most of this decline was due to reductions in the number of structurally deficient bridges (from 102,040 to 75,378).  Bridge deficiencies tend to vary by functional system; for example, the percentage of Interstate bridges classified as deficient is lower than the comparable percentages for bridges on collectors or local roads. 

Despite improving conditions on many roads and bridges, operational performance has deteriorated since 1997.  For example, a trip in 1997 that required 20 minutes during non-congested conditions required, on average, 24.6 minutes in the same year under congested conditions.  In 2005, the same trip under congested conditions required 25.6 minutes, one additional minute.  From 1997 to 2005, the estimated percentage of travel occurring under congested conditions rose from 24.9 percent to 28.7 percent.  The average length of congested conditions increased from 5.9 hours per day in 1997 to 6.4 hours per day in 2002, but has remained constant at that level since 2002 (dipping slightly to 6.3 hours in 2007).  The Texas Transportation Institute (TTI) estimates that drivers experienced over 4.2 billion hours of delay and wasted approximately 2.9 billion gallons of fuel in 2005.  The cost of congestion has been estimated by TTI at $78.2 billion per year (2005 dollars).

HIGHWAY TRUST FUND

A key challenge in addressing the needs I have outlined will be the availability of funding at the Federal level.  An overarching concern for surface transportation funding is the status of the Highway Trust Fund. 

The reports issued by the two Commissions established under the Safe, Accountable, Flexible, Efficient Transportation Equity Act:  A Legacy for Users (SAFETEA-LU) make clear that we are at a crossroads in terms of future funding of the surface transportation system and programmatic improvements. 

The funding levels set in SAFETEA-LU for fiscal years 2005 through 2009 were designed to spend down the accumulated balance in the Highway Account of the Highway Trust Fund and left the Account unable to sustain the highway programs into 2010.  The sustainability issue became apparent when in 2008 the Highway Trust Fund required an $8 billion transfer from the general fund in order to remain solvent.  The current reduction in economic activity has only exacerbated the problem of sustainability for 2010, and we remain at risk of yet another cash shortfall in FY 2009.

This Administration inherited a difficult problem—a system that can no longer pay for itself.  There simply is not enough money in the Highway Trust Fund to do what we need to do.  We are looking at every option to solve this problem, but we will not be ready overnight.

As we approach the reauthorization of the surface transportation programs, we need to think outside the box, particularly as we search for sustainable funding mechanisms.  The President's Budget proposes to expand and enhance existing Federal infrastructure investments through a National Infrastructure Bank designed to deliver financial resources to priority infrastructure projects, including highways and transit systems, of significant national or regional economic benefit.  We are exploring innovative ideas for sources of funds and methods of financing for surface transportation investment to make the Nation's communities more livable and less congested and to invigorate the economy. 

AMERICAN RECOVERY AND REINVESTMENT ACT

Surface transportation investment is an important element of President Obama’s economic recovery and reinvestment efforts to put people back to work and reinvigorate the economy.  The ARRA includes appropriations and tax law changes totaling approximately $787 billion to support efforts designed to simultaneously stimulate the economy and invest in the economy of tomorrow.  Provisions in the legislation are designed to save or create millions of jobs, enable spending by businesses and consumers alike, and lay a foundation for long term economic growth and stability.  The scope of the legislation is unprecedented, and provides financial support for investments including improving transportation infrastructure, upgrading schools, building infrastructure to support a clean energy grid for America, creating new opportunities for the unemployed, and helping to maintain jobs for those currently employed.

Through ARRA, we will be investing over $48 billion in transportation infrastructure, including $27.5 billion for our Nation's highways, bridges, and tunnels, and potentially other uses specified by the statute.  This represents the largest one-time investment in America's infrastructure since President Eisenhower established the Interstate Highway System over 50 years ago.  We project that this new investment in highways will create or save 150,000 jobs by the end of next year, most of them in the private sector.  By creating jobs, saving jobs, and putting money in people's pockets through transportation investment, we will not only get America's economy moving again, but we will also get America's highways, transit, rail, and aviation systems moving better as well.

This is a long-overdue investment in our transportation infrastructure and in jobs for Americans.  We are charting a new course for America.  ARRA will enable our Nation to begin to rebuild, retool, and revitalize the vast network of roads, tunnels, bridges, rail systems, airports, and waterways that we have long depended on to keep the economy moving and growing.  The $27.5 billion for highway construction will create employment quickly because State transportation departments will use it for projects that need only funding to get started.  This spring, summer, and fall, this investment will result in the employment of many people in well-paying construction-related jobs.

We are keeping our promise at the Department of Transportation (DOT) to get this money out the door.  I am proud to report that FHWA has spearheaded our effort and apportioned $26.6 billion in highway funds to States on March 2, under the formula established by the statute.  State transportation departments and Federal resource agencies are already advancing numerous transportation projects across the country.  As of March 20, FHWA authorized nearly 700 projects in 31 States totaling $2.5 billion in obligations.

In addition to accelerating the construction of safer roads, highways, and bridges, we are also using ARRA funds to repair, upgrade, modernize, and expand capacity for bus, rail, shipyard, and airport systems.  We are emphasizing sustainable investment and focusing on the people, businesses and communities who use the transportation systems.  We are also focusing on the quality of our environment.  These efforts are not only putting people to work—they are moving us toward our long-term goals of ensuring energy security and creating more livable communities.

With this large infusion of money and aggressive goals for advancing projects, we are committed to ensuring that funds are spent properly.  I have established a team of officials across the DOT—the Transportation Investment Generating Economic Recovery (TIGER) team—to track every dollar spent in order to ensure accountability and transparency. 

REAUTHORIZATION

The next authorization of surface transportation programs is one of my highest priorities.  This reauthorization is about investments that we need to make as a Nation—investments in the economy, in transportation infrastructure, and in the future.  The new authorization bill for surface transportation programs will make long-lasting investments in our nation’s infrastructure and will help keep people employed long after recovery funds are spent.   

In the current economic climate and with strained Highway Trust Fund revenues, it is more critical than ever that Federal dollars are strategically invested.  In reauthorizing the Federal-aid highway program, we will be seeking changes that encourage more effective investments in an environmentally-friendly manner through a multi-modal approach to problem solving.  Taxpayers want to see results from infrastructure investments that directly benefit their lives—better access to jobs and goods, and improved mobility within and between communities.  We need an increased focus on measuring the outcomes of infrastructure investments, such as improved safety, reduced congestion, improved pavement and facility life, and better air quality. 

Safety

Safety will continue to be the Department’s highest priority.  In 2007, the last year for which we have final data, the number of people who lost their lives on the Nation’s roadways fell by 1,659 deaths from 2006, equaling a fatality rate of 1.36 per 100 million VMT—the lowest rate ever recorded.  Further, in December 2008, the National Highway Traffic Safety Administration released a projection that 2008 fatalities had dropped 10 percent for the January through October period relative to the same time period in 2007.  Despite the gains we have made in improving highway safety, 41,059 individuals still lost their lives in motor vehicle crashes in 2007.

The total number of transportation-related fatalities in the country is unacceptable.  Concerted efforts to improve safety are needed in all surface transportation modes including auto, truck, transit, rail, bus, motorcycle, and pedestrian safety.  Innovation and technology will be critical to improving vehicle and infrastructure safety.  We must also explore innovative ways to reduce deaths and serious injuries caused by impaired driving, failure to wear seatbelts and motorcycle helmets, and other high risk behaviors.  Safety problems vary from State to State, and it is important that data-driven, performance-oriented programs be established to identify the most cost-effective strategies to improve safety in each jurisdiction.

Livable and Sustainable Communities

One of my highest priorities is to help promote more livable communities through sustainable surface transportation programs.  Actions on many fronts will be required to enhance the quality of life associated with reduced commutes, limited transportation noise and other environmental impacts, and convenient access to centers of commerce and intercity travel hubs.  All segments of the population deserve efficient transportation to reach work, housing, medical and educational services, shopping, and other essential activities.  The job-providing businesses in our communities need transportation to reach their suppliers, their work force, and their customers.  Existing transportation facilities and services must be maintained and operated effectively, and the range of transportation choices available to American families and businesses must be expanded.  We also must continue to ensure that transportation facilities and services are provided in a way that avoids adverse impacts on wetlands, endangered species, historic resources, air quality, and other natural resources.

I believe it is no less important to ensure that our transportation investment decisions are consistent with broader policies to reduce greenhouse gas emissions and slow the pace of climate change.  Integrating transportation planning with community development and expanding transportation options will not only improve connectivity and influence how people choose to travel but also enable communities to consider the design of transportation and land use together.  In our urban areas we can continue to improve walking and bicycling facilities and connectivity to transit to reduce congestion and greenhouse gas emissions, while making our communities healthier.  Mixed-use neighborhoods with highly-connected streets arranged in small blocks promote mobility for all users, whether they are walking, bicycling, riding transit or driving motor vehicles.  Benefits include improved traffic flow, shorter trip lengths, reduced vehicle-miles traveled, safer streets for pedestrians and cyclists, lower per-capita greenhouse gas emissions, reduced dependence on fossil fuels, increased trip-chaining, and independence for those who prefer not to or are unable to drive.  In addition, investment in street networks stimulates private-sector economic activity, increases the viability of street-level retail businesses and professional services, creates housing opportunities, and extends the usefulness of school and transit facilities.

Innovation and Accountability

Traditionally innovation has been a hallmark of progress in transportation.  Challenges today may be different from the past, but the role of technology and innovation is just as important.  Technology will be central to our efforts to improve safety, reduce congestion, and manage our infrastructure more effectively.  We must make a substantial investment in research and development if we are to fully, effectively, and efficiently maintain our aging infrastructure.  Absent such investment, we will have no choice but to apply old and inadequate technologies to solve new and more complex problems.  Our Nation can ill-afford the financial and system performance costs of attempting to address 21^st century challenges with 20^th century solutions.  Innovation is not limited to new technologies however.  Innovations in the way we deliver programs will be just as important in our efforts to improve all aspects of transportation system performance. 

One innovation in program delivery would be to create more accountability for achieving performance improvements.  Accountability, transparency, and performance in Federal programs are key tenets of the Obama Administration.  Congress demands it, the public demands it, and it is the right thing to do.  New processes will have to be put in place to implement performance-based programs.  In some cases this may require changes to long-standing ways of doing business.  Performance-based programs will provide the means to improve investment decisions, improve the performance of our transportation systems, and improve our stewardship of taxpayer dollars.  As we recently pointed out in the President's Budget for Fiscal Year 2010, greater use of economic analysis will be needed in transportation planning.

CONCLUSION

Our transportation infrastructure is critically important to our Nation's economic health.  In the next authorization, we must maintain the safety and integrity of our highways and bridges, while improving system performance and reliability, and striving towards goals of livable and sustainable communities.  We look forward to continued work with this Committee, the States, and our partners in the transportation community.

Statement of

Mark E. Yachmetz
Associate Administrator for Railroad Development
Federal Railroad Administration

To

The Subcommittee on Railroads, Pipelines and Hazardous Materials
Committee on Transportation and Infrastructure
U.S. House of Representatives

April 22, 2009

Chairwoman Brown, Mr. Shuster and members of the Subcommittee:   I am pleased to have this opportunity to appear before you on behalf of Secretary of Transportation Ray LaHood to update you on the status of the Railroad Rehabilitation and Improvement Financing Program, also known as RRIF.

By way of introduction, I am Mark Yachmetz, Associate Administrator for Railroad Development of the Federal Railroad Administration (FRA.)   The Office of Railroad Development which I have the honor to lead is responsible for FRA’s investment programs including:

• Railroad Research and Development;
• Support to the Secretary of Transportation in his role as a member of Amtrak’s Board of Directors;
• Analyses in support of development of intercity passenger rail policy;
• Operating and capital grants to Amtrak;
• Grants to States for rail line relocation, grants to the Alaska Railroad for capital improvements benefitting passenger service, grants to railroads for rehabilitation and repair resulting from natural disasters, and grants for high-priority rail-related projects designated by Congress.
• Implementation of FRA’s responsibilities under the Passenger Rail Investment and Improvement Act of 2008;
• Implementation of FRA’s responsibilities under the American Recovery and Reinvestment Act of 2009.; and
• FRA’s credit program responsibilities under RRIF and Transportation Infrastructure Finance Innovation Act (TIFIA).

I joined the staff of the FRA in 1978 to work in the program providing credit-based financial assistance to the rail industry that was authorized by Title V of the Railroad Rehabilitation and Regulatory Reform Act of 1976.   That program was the predecessor to RRIF, thus I have been involved to some degree with FRA’s credit-based programs since just after their inception.

Touching on the highlights of the RRIF program since its creation in the Transportation Equity Act for the 21^st Century (TEA-21):

• FRA has made 22 loans totaling $786.72 million dollars.  FRA has not yet guaranteed any loans. (A list of loan recipients is attached to this testimony.)
• Three of these loans, totaling $381 million dollars have been repaid in full.
• Payments on all other loans are current; there have been no defaults of RRIF loans.
• There are currently 3 complete applications being reviewed by FRA, with several additional draft applications in various stages of development.
• On March 30, 2009, the U.S. Department of Transportation published a notice in the Federal Register withdrawing a proposed rulemaking initiated in the prior administration that would have changed RRIF policies and procedures.

RRIF Program in Brief

The RRIF program was established by section 7203 of TEA-21 and amended by section 9003 of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act: a Legacy for Users (SAFETEA-LU) and section 701(e) of the Rail Safety Improvement Act of 2008.  Under this program the Federal Railroad Administrator is authorized to provide up to $35 billion in direct loans and loan guarantees.   Of this amount, $7 billion is reserved for projects benefiting freight railroads other than Class I carriers.

Applicants

Entities eligible for this financial assistance are:

• State and local governments;
• Interstate compacts consented to by the Congress under section 410(a) of the Amtrak Reform and Accountability Act of 1997 (49 U.S.C. 24101);
• Government sponsored authorities and corporations;
• Railroads (which means a rail carrier subject to Part A of subtitle IV of Title 49 U.S.C. – specifically freight railroads, intercity passenger railroads and commuter railroads that operate on the general system of railways of the U.S. and are subject to FRA’s safety jurisdiction)
• Joint ventures that include at least one railroad;
• Solely for the purpose of constructing a rail connection between a plant or facility and a second rail carrier, limited option rail freight shippers that own or operate a plant or other facility that is served by no more than a single railroad.

Eligible purposes

Loans or loan guarantees provided under RRIF can be used to:

• Acquire, improve, or rehabilitate intermodal or rail equipment or facilities, including track, components of track, bridges, yards, buildings and shops;
• Refinance outstanding debt incurred for the purposes described above; and
• Develop or establish new intermodal or railroad facilities.

Priorities for Consideration

When evaluating applications, FRA gives priority consideration to projects that:

• Enhance public safety;
• Enhance the environment;
• Promote economic development;
• Enable the United States to be more competitive in international markets;
• Are endorsed by the plans prepared under section 135 of title 23, United States Code, by the State or States in which they are located;
• Preserve or enhance rail or intermodal service to small communities or rural areas:
• Enhance service and capacity in the national system; or
• Would materially alleviate rail capacity problems which degrade the provision of service to shippers and would fulfill a need in the national transportation system.

Loan Terms

The maximum repayment period for direct loans or loan guarantees is 35 years or if collateral is pledged, the life of the asset whichever is less.   The interest rate on direct loans is equal to the rate on Treasury securities of a similar term.

Fees

Applicants may be required to pay an investigation charge of up to one half of one percent of the principal amount of the direct loan or the portion of the loan to be guaranteed.   These fees have been used only for the cost of independent financial advisors, including appraisers of collateral, related to the specific loan under consideration, and reflect actual expenses incurred for the review of the application.   FRA’s experience has been that investigation fees for loans ranging from $10 million to $100 million normally fall in the range of $30,000 to $60,000.     For smaller proposed loans, where the cost of the consultant is greater than the maximum fee that can be charged, FRA absorbs the additional costs if the Agency’s financial resources permit or undertakes the needed analysis using FRA staff.

Credit Risk Premium

The Federal Credit Reform Act of 1990, as amended, (FCRA) changed the budgetary measurement of the cost for direct loans and loan guarantees from the amount of cash flowing into or out of Treasury to the estimated long-term cost to the Government.  This estimated long-term cost is referred to as the subsidy cost.  FCRA requires that Federal agencies reserve this subsidy cost before entering into a new direct loans or loan guarantees.  For the RRIF program, this subsidy cost can be paid for by or on behalf of applicants for credit assistance in the form of a credit risk premium.

Calculating the credit risk premium can be done in one of two ways.   Where the applicant has received a recent credit rating from one or more nationally recognized rating agencies, that rating is used to estimate the credit risk.   For applicants that have not received a credit rating, the credit risk is based upon an evaluation by FRA of the business risk based upon the applicant’s industry outlook, market position and management financial policies; the financial risk based upon the applicant’s past financial performance; the project risk; and the potential recovery in event of default, including the value of any collateral offered by the applicant.   To date, the credit risk premiums charged by FRA have ranged between 0 and 6.16 -percent.

Collateral

Applicants are not required to offer collateral, but by offering collateral, an applicant may significantly enhance the strength of the RRIF credit and thus significantly reduce the required credit risk premium.  As collateral, an applicant or any other party may offer anything of marketable value, not just assets related to the project under consideration.   Indeed, collateral need not necessarily be related to the railroad or rail operations.

FRA is required, if possible, to value collateral as a “going concern”, based upon the premise that a business sold as a going concern has greater value than liquidating its component parts.   The going concern valuation, however, is only relevant and thus only used when a whole business or a business unit is used as collateral.   Other collateral such as a building is valued at its net liquidated value that is the value that could be received by selling the asset on the open market for its highest and best value.

The Application Process

Pre-Application

FRA encourages potential applicants to engage FRA in pre-application discussions.  Such discussions help the applicant understand the application process, the issues that need to be addressed and the nature of the finance agreement that would result from a successful application.  Some applicants have only one pre-application discussion.  Other pre-application discussions can become quite extensive as the potential applicant refines description, scope and cost estimates of the proposed project.   These differences in the length of the pre-application stage frequently reflect the wide differences in applicants.   Some are public agencies or large corporations with in-house financial and engineering expertise, while others are smaller corporations that need outside help, and thus more time, in developing information necessary to support an application.  

A RRIF application may be the first time an applicant has dealt with the Federal Government from a financial assistance perspective.  Pre-application discussions thus also address certain requirements inherent in any Federal program, including the need for FRA to comply with National Environmental Policy Act of 1969 (NEPA) and its environmental review requirements.  Because FRA does not have funds for this purpose, the financial burden of complying with NEPA falls on the applicant and NEPA clearance is a prerequisite to an application being complete.   Fortunately, most RRIF projects to date have fallen under established categorical exclusions from NEPA review, have required nominal environmental reviews, or have involved projects for which NEPA documentation has been prepared for other purposes.  

Application and Review

FRA’s website includes the RRIF application form.   Once the applicant submits a draft application,  it is assigned to a staff analyst for review.   Once the staff analyst is comfortable that the application is complete or nearly complete, an estimate of the investigation charge is provided the applicant.   Upon receipt of these funds, FRA retains its independent financial advisor (IFA) from among a group of advisors FRA has under contract.   The IFA’s first task is a final review of the draft application and development of any additional materials needed to make it final.   Frequently, the IFA identifies additional documents needed to support detailed financial data or supporting information for traffic and revenue projections.

Normally within 30 days of the initial filing the staff analyst, based upon her or his review and recommendations of the IFA, sends a letter to the applicant explaining the information needed to complete the application.    Upon the receipt of this information from the applicant and completion of any NEPA-related documentation, the application is deemed complete.   FRA sends a letter to the applicant to this effect.  This initiates the statutory 90 day period for review of the application.

FRA’s exercise of due diligence involving the review of the financials of the proposed project and applicant is relatively intense, with substantial work occurring over a brief period of time.    In cases where applicants do not have a credit rating from one of the national rating agencies, the analyst supported by the IFA analyzes all relevant aspects of the proposed transaction.   This analysis includes such activities as interviewing existing and potential shippers and independently developing projections of traffic, revenues and expenses, leading to the development of pro-forma financial statements.

During this period, FRA’s staff engineers review the engineering aspects of the proposed project to develop an independent assessment of the reasonableness of cost estimates and the ability of the proposed improvements to accomplish the intended purpose.   When infrastructure is involved, this includes a site inspection.   The Office of Railroad Development also consults with appropriate regional officials of FRA’s Office of Safety to identify any specific concerns that they might have identified in their periodic inspections of the railroad.   FRA also consults with other modes of the Department if the applicant or proposed project might interface with their programs (e.g. Federal Transit Administration for commuter rail projects.)

Upon the completion of the review of the application by FRA staff supported by the IFA, a recommendation is made to FRA’s Administrator by the Associate Administrator for Railroad Development for action on the application.   Those the Administrator decides to advance are presented to the U.S. Department of Transportation’s Credit Council (the Credit Council.)  Alternatively, the Administrator may choose to deny the application at this point.  

 The Credit Council is an organization created by the U.S. Department of Transportation to ensure the application of consistent credit policies and management practices across all the Department’s credit programs.  The members of Credit Council are the Assistant Secretary for Budget and Programs/Chief Financial Officer (chair), the Under Secretary of Transportation for Policy, General Counsel, the Assistant Secretary for Transportation Policy, the Federal Railroad Administrator, the Federal Highway Administrator, the Federal Transit Administrator, the Maritime Administrator and the Director of the Small and Disadvantaged Business Utilization.   The Credit Council will provide to the Federal Railroad Administrator a recommendation regarding the financial viability of a proposed project and the merits of the requested credit assistance and its consistency with Department credit policies.

After considering the recommendation of the Credit Council, the Administrator then decides whether or not to approve the loan.   If the loan is approved, FRA’s calculation of the credit risk premium is submitted to the Office of Management and Budget (OMB) for concurrence.  While FRA develops estimates of the credit risk premium using its model, in accordance with the FCRA, OMB must agree to the final calculation of the subsidy cost and thus the credit risk premium.  

Finalizing the Assistance

Once the final credit risk premium is calculated, the applicant is informed and a term sheet is sent to the borrower.   The term sheet includes all of the basic information on the loan including repayment period, interest rate and credit risk premium.

Upon acceptance of the terms, closing documents are prepared and signed, the credit risk premium is paid and funds disbursed as needed.   FRA then monitors implementation of the project and repayment of loans.   FRA also monitors the overall financial condition of borrowers to identify any issues that could impact repayment of the loan.

Conclusion

I appreciate the opportunity to provide the Subcommittee with an update on the RRIF program.  I am available to answer any questions that you might have on FRA’s implementation of this program.

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STATEMENT OF

KAREN VAN DYKE
ACTING DIRECTOR, POSITIONING, NAVIGATION, AND TIMING
RESEARCH AND INNOVATIVE TECHNOLOGY ADMINISTRATION
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

NATIONAL SECURITY AND FOREIGN AFFAIRS SUBCOMMITTEE
HOUSE COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

HEARING ON:

GPS: CAN WE AVOID A GAP IN SERVICE?

MAY 7, 2009

Chairman Tierney, Ranking Member Flake, and Members of the Subcommittee:

I am Karen Van Dyke, Acting Director for Positioning, Navigation and Timing in the U.S. Department of Transportation’s Research and Innovative Technology Administration (RITA).  I appreciate the opportunity to appear before you today to discuss the criticality of the Global Positioning System to the civil user community.

GPS technology is increasingly woven into the fabric of American society, from cars and planes to cell phones and wristwatches. It improves productivity and efficiency in many areas of commerce. For example, today’s construction, farming, mining, shipping, surveying, and traffic management systems have become dependent on GPS. The technology enhances public safety by preventing transportation accidents and by reducing the response times of ambulances, firefighters, and other emergency services. It allows agriculture operations to continue through low visibility field conditions such as rain, dust, fog and darkness, and to apply chemicals precisely, reducing environmental impact while reducing production costs. GPS also furthers scientific aims such as weather forecasting, earthquake prediction, and environmental protection.

Furthermore, the precise GPS time signal, derived from atomic clocks, is embedded in critical economic activities such as synchronizing communication networks, managing power grids, and authenticating electronic transactions.

Importance of GPS to NextGen

Of particular interest to the Department of Transportation is the Federal Aviation Administration’s (FAA) Next Generation Air Transportation System (NextGen) program.  NextGen is a wide-ranging transformation of the national air transportation system to meet future demand and support the economic viability of the system while reducing delays, improving safety, and protecting the environment. NextGen will change the way the system operates – reducing congestion, noise, and emissions, expanding capacity and improving the passenger experience. NextGen is a highly complex, multilayered, evolutionary process of developing and implementing new technologies and procedures.

NextGen will reduce fuel burn and greenhouse gas emissions, allow more direct, time-based routings, enable safer operations, and reduce runway incursions.  United Airlines already has pioneered the use of tailored arrivals based on GPS from Honolulu to San Francisco, with a fuel savings of 1,600 pounds per flight.

GPS is the foundation for NextGen navigation and surveillance. The continuity of funding and integrity of the planned launch schedule of the GPS constellation is vital to the nation moving ahead with NextGen.

Commitment to GPS

I would like to thank the Air Force for their dedicated service in providing extremely reliable operation of GPS since it achieved Initial Operating Capability in 1993.  The United States clearly is the leader in space-based positioning, navigation, and timing and we must continue to maintain and improve GPS, its augmentations, and backup capabilities to meet growing national security, homeland security, economic security, civil, and scientific demands, and to maintain this U.S. technology leadership position.

Sustainability of the GPS constellation is critical to users worldwide. The Department of Transportation is committed to modernization of GPS and providing funding to ensure the development and modernization of the next generation of GPS to provide new civil capabilities.  Fully funding the DOT portion of GPS modernization is critical to ensuring that the GPS III program remains on schedule to ensure future constellation sustainment.

The Department of Transportation is confident that the Department of Defense will continue to operate GPS at or above the minimum GPS Performance Standard commitment of 21 healthy satellites 98 percent of the time, equivalent to 24 healthy satellites 95 percent of the time and will find innovative methods to extend the life of the GPS satellites to prevent any gaps in availability.  We recognize that GPS has exceeded performance commitments with 30 satellites currently operational, and that some users may have come to expect this level of service.

Mitigation of Disruption

The Department of Transportation is a provider, as well as a user, of GPS services, augmenting the GPS signal to improve accuracy and integrity.  FAA provides the Wide Area Augmentation System (WAAS), and RITA coordinates resources and plans for the inland component of the  Nationwide Differential GPS System (NDGPS), operated and maintained by the U.S. Coast Guard. WAAS and NDGPS stations are a part of the National Oceanic and Atmospheric Administration (NOAA)-managed national Continuously Operating Reference Stations or CORS network of over 1300 permanently operating GPS receivers maintained by over 200 federal, academic and private organizations.  The U.S. Air Force, U.S. Coast Guard, and the Federal Aviation Administration have agreements to coordinate and provide notification of GPS performance and any disruptions of GPS service to the user community.

For aviation users relying on unaugmented GPS, when the constellation is at its minimum GPS Performance Standard commitment, outages will be experienced on a routine basis, which could result in complaints and economic impact.  For users who equip with GPS augmented by WAAS, the impacts are reduced, supporting minimum availability requirements of 99% or more. 

However, like any radionavigation system, GPS is vulnerable to interference that can be reduced, but not eliminated.  In 2001, RITA’s Volpe National Transportation Systems Center issued the “Vulnerability Assessment of the Transportation Infrastructure Relying on the Global Positioning System”.  The findings of this assessment indicated that there was awareness within the transportation community of risks associated with use of GPS as a primary means for position determination and precision timing.  Due to the reliance of transportation on GPS signals, it is essential that threats be mitigated and alternative back-ups be available, and the system be hardened for critical applications. DOT has determined that sufficient alternative navigation aids currently exist in the event of a loss of GPS based services.

Potential back-up capabilities to GPS are being explored as part of a National Positioning, Navigation and Timing (PNT) Architecture study, initiated in 2006 at the request of the Assistant Secretary of Defense for Networks and Information Integration and DOT’s Under Secretary of Transportation for Policy. The overarching goal of the architecture, with GPS as its cornerstone, is intended to overcome identified capability gaps, and achieve an evolutionary path to providing integrated space-based, terrestrial, and autonomous solutions in the 2025 time period that will ensure the continuity of government-provided PNT services. 

In conclusion, I would like to thank the Committee for allowing me to discuss the civil user perspective of GPS.  The Department of Transportation is committed to continue our strong working relationship with the Department of Defense to maintain our global leadership in space-based PNT.

I would be glad to answer any questions you may have.

STATEMENT OF

POLLY TROTTENBERG
ASSISTANT SECRETARY FOR TRANSPORTATION POLICY
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

SUBCOMMITTEE ON TECHNOLOGY AND INNOVATION OF THE
COMMITTEE ON SCIENCE AND TECHNOLOGY
UNITED STATES HOUSE OF REPRESENTATIVES

November 19, 2009

DOT’s Research and Development to Support the Department of Transportation’s Strategic Goals

Chairman Wu, Ranking Member Smith, and Members of the Committee:

On behalf of Secretary Ray LaHood, I’d like to thank you for the opportunity to appear here today with my colleague Peter Appel to discuss the research and policy priorities for the U.S. Department of Transportation.

USDOT greatly appreciates the leadership this Committee has shown on transportation research and we value the guidance and oversight you have provided the Department over the years. 

As this Committee has recognized, research is a critical component to accomplish the goals we all share of creating a national transportation policy that is transparent and accountable, data-driven, focused on achieving strategic outcomes and on maximizing the value of public investment. 

Having had the opportunity to work on many key transportation bills during my 12 years as a staff member in the Senate, I know firsthand how important timely and targeted research is for Congressional decisionmakers. 

As such, the Office of Policy has made it a top priority to provide accessible and relevant research to leaders in Congress, the Administration, and the larger national transportation community.  This is particularly important as we consider the next surface transportation bill at a time that our Nation’s transportation system faces profound economic, social and environmental challenges.  Our transportation system also faces unprecedented fiscal challenges, with dedicated revenue sources no longer adequate to maintain our existing infrastructure or to fund the future investments we will need.

At USDOT we are currently developing our 2010-2015 Strategic Plan, which will outline our strategic goals and priorities.  The Plan is not yet complete, but it will focus on key priorities that Secretary LaHood has publicly articulated – namely, creating a National transportation system that improves safety and public health, fosters livable communities, promotes a state of good repair and long-term economic competiveness, while achieving environmental sustainability. 

This Administration believes that we must create a safe, truly multimodal transportation system that provides the traveling public and U.S. businesses with safe, convenient, affordable and environmentally sustainable transportation choices.

Improving safety is the top priority of USDOT.  Secretary Ray LaHood has tasked all DOT employees with fostering a safety culture in our daily work and encouraging our partners, stakeholders and the public to redouble their efforts to reduce transportation-related fatalities and injuries.  As this Committee knows, we conduct and support significant research in the safety area, which Administrator Appel will describe in more detail.

Creating livable communities that provide residents with affordable transportation options is another key USDOT priority.  DOT has formed an interagency livability partnership with the Department of Housing and Urban Development (HUD) and the Environmental Protection Agency (EPA) to integrate transportation, housing, economic development and environmental planning and research.  This innovative, cross-cutting effort seeks to promote increased access to jobs, school, health services, and other activities for our citizens while improving the quality of life in their communities.

The U.S. must also maintain our existing infrastructure in a state of good repair.  Our nation has built one of the world’s most extensive and productive transportation systems, representing trillions of dollars of public and private investment.  It is essential that we adequately maintain and modernize this vast, existing infrastructure to maximize its reliability, capacity and performance, to reduce operational and replacement costs and to extend the system’s useful life.

We also seek to achieve the maximum economic impact from our transportation investments and lay the groundwork for long-term economic growth and prosperity.  It is essential to determine which investments yield the greatest benefits to the transportation network especially during this period of economic hardship and with difficult budget choices occurring at all levels of government. 

Finally, the Obama Administration is committed to a comprehensive national energy and environmental policy that emphasizes reducing carbon emissions and consumption of fossil fuels as well as protecting and enhancing natural resources.  Thus, USDOT is committed to advancing transportation policies and investments that reduce energy use and foster protection of critical watersheds and ecosystems.  Our work on livable communities also helps us move towards clean energy and sustainable environment.

Clearly achieving these ambitious priorities will require USDOT to accelerate the rate at which we convert research into outcomes.  Too often in the past, we have done a good job of funding cutting-edge research, but have not done a good enough job of making sure that the results of that research were translated by policymakers into better, safer, more efficient transportation.  We intend to focus on the entire innovation process -- from research to policy development -- to make sure that the American people are getting their money's worth from the research that we support.

Thank you and I look forward to your questions.

STATEMENT OF

DR. KARLIN TONER,
DIRECTOR, STAFF TO THE SECRETARY AND
SENIOR POLICY COMMITTEE ON NEXTGEN COORDINATION,
OFFICE OF THE ASSISTANT SECRETARY FOR BUDGET AND PROGRAMS/CFO,
U.S. DEPARTMENT OF TRANSPORTATION,

ON

ATC MODERNIZATION AND NEXTGEN: NEAR-TERM ACHIEVABLE GOALS,

BEFORE THE

HOUSE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON AVIATION,

MARCH 18, 2009

Chairman Costello, Ranking Member Petri and Members of the Subcommittee:

Thank you for the opportunity to discuss the leadership role of the Senior Policy Committee in setting the strategic direction for the Next Generation Air Transportation System or “NextGen.”

To introduce myself, I am currently assigned on detail from the Federal Aviation Administration to the Department of Transportation as an advisor on NextGen coordination. I am an aerospace engineer with more than 15 years of prior experience leading NASA research programs involving government, industry and academia. My publications include topics ranging from the design of aircraft to analysis of air traffic management concepts.

LEAD NEXTGEN STRATEGICALLY

NextGen will completely transform our Nation’s air transportation system. Our system will be safe, more capable, more environmentally responsive and more effective at achieving our security and defense needs. NextGen requires rethinking air transportation. We must consider the capabilities of aircraft, airports and operations, looking at the system as a whole and integrating safety from the earliest conceptual design. For example, satellite-based measurements of location together with aircraft performance models will better anticipate flight paths and enable proactive air traffic management. Effective security will protect people, goods and airspace in a system with increased capacity. Operations will be harmonized on a global scale. Delays introduced by adverse weather will be reduced by integrating weather forecasts and observations into operational traffic flow planning.

Meeting the civil aviation, homeland security, economic, environmental protection, and national defense needs for NextGen, requires the alignment and integration of the air-transportation-related vision and activities among several federal agencies. For this reason, the Vision 100 – Century of Aviation Reauthorization Act of 2003 (Public Law 108-176) established the Senior Policy Committee (SPC) and the NextGen Joint Planning and Development Office (JPDO), chartering them to jointly transform the U.S. air transportation system by 2025.

Five “SPC partners” lead the transformation:  the Departments of Transportation, Commerce, Defense and Homeland Security and the National Aeronautics and Space Administration. The SPC members, heads of these partnering agencies, advise the Secretary of Transportation on national goals and strategic objectives for NextGen to meet future United States’ aviation needs. Members provide policy guidance for the integrated work plan created by the JPDO, identify resource needs and make recommendations for funding for planning, research and development activities within their respective organizations.

ENABLE ACCOUNTABILITY FOR NEXTGEN

The Secretary of Transportation and the SPC are accountable for NextGen, a national effort with a broad scope of policy, economic and technological complexity. They need to have the tools to do this difficult interagency leadership job. Two new additions to the toolbox enable effective participation:  a direct SPC support staff and an advisory committee, both of which were mandated by a recent Executive Order. As Staff Director, I will lead the action to insure that these two new tools are ready for the task.

PROVIDE SUPPORT STAFF

One of my first responsibilities as Staff Director is to establish, lead and direct a full support staff. I am working with the SPC partners to fill the staff positions, insuring that the duties for each position are needed at the department level. At the Department of Transportation, I serve as the senior staff advisor to the Secretary and Deputy Secretary concerning all NextGen matters. The staff leads the coordination and resolution of high-level interagency policy issues related to NextGen transformation; provides oversight of the development of the interagency cross-cutting budget documentation and high-level performance measures; and monitors progress toward interagency deployment of NextGen demonstrations and capabilities.

It is imperative to stress that the coordination staff will have an interagency focus. The Staff Director is a liaison between the Secretary and the SPC partnering agencies. The support staff will work with the SPC to deliver a biennial report that measures collective progress toward NextGen.

ENGAGE PRIVATE SECTOR DISCUSSION

Work is underway to establish a Federal Advisory Committee that has a broad spectrum of representatives including general aviation, commercial aviation, and aviation labor. Through public discussions, the committee will aim to identify areas where the aviation community can forge the consensus that will inform SPC decisions in setting a path forward. The advisory committee will focus on NextGen policy, planning and performance measures. Specific details regarding the charter, membership and tasking are in formulation now.

RECOGNIZE THE MAGNITUDE OF THE NEXTGEN CHALLENGE

The expeditious transportation of people and goods has made great societies grow and flourish, beginning with roads and expanding to shipping, to railways, to highway systems and to aviation. The traveling public expects an aviation system that is safe, secure and convenient. Despite the current economic downturn, forecasts continue to predict growth in demand for air travel. This growth must be sustainable, addressing environmental protection. To realize sustainable growth, airspace system users want to introduce new modes of travel bringing greater complexity to operations.

Quite simply stated in the FAA’s NextGen Implementation Plan 2009 (http://www.faa.gov/nextgen), “NextGen means flying more passengers, more cargo, more types of aircraft, more safely, more precisely, and more efficiently, using less fuel, making less noise and creating less environmental impact.”

The SPC’s top-level strategic direction is needed to direct such an ambitious transformation. A plan, with a clear timeline and deliverables, must integrate roadmaps for policy, technology and capabilities across the broad spectrum of research, engineering and development, implementation and operation. Execution of the plan requires cooperation and collaboration among government and the private sector. Further, the complexity of NextGen demands clear accountability and rigorous oversight of its development and implementation.

CONCLUSION

Establishing and maintaining a national air transportation system that meets the present and future civil aviation, homeland security, economic, environmental protection and national defense needs of the United States is not easy. To get there, we have to do a superior job addressing national policies, executing interagency plans and gauging progress against performance measures. And, the SPC must lead us there. Again, thank you for the opportunity to testify today.