STATEMENT OF

DR. GEORGE C. NIELD,
ASSOCIATE ADMINISTRATOR FOR
COMMERCIAL SPACE TRANSPORTATION,

BEFORE THE

HOUSE COMMITTEE ON SCIENCE,
SUBCOMMITTEE ON SPACE AND AERONAUTICS,

ON

THE OFFICE OF COMMERCIAL SPACE TRANSPORTATION’S
FISCAL YEAR 2012 BUDGET REQUEST,

MAY 5, 2011.

Chairman Palazzo, Congressman Costello, and Members of the Subcommittee:

Thank you for inviting me to participate in this hearing on the activities of the Federal Aviation Administration (FAA) Office of Commercial Space Transportation (AST).  This is my first opportunity to speak to many of you, so I am particularly pleased to be here.  I know the subcommittee is specifically interested in the Administration’s FY 2012 budget, and our request to fund AST’s current and future programs. I look forward to answering any questions you may have about our request.  I would also like to take this opportunity to update the subcommittee on some of our recent activities, to highlight some of the changes to our industry during the past year, and to offer a view of the future – what’s on the horizon as we transition to a new commercial space transportation industry.

The Office of Commercial Space Transportation

The Office of Commercial Space Transportation (AST) was established by Executive Order in 1984 and was located in the Office of the Secretary of Transportation. In November of 1995, the office was transferred to the FAA, where today it is one of the agency’s four lines of business, along with the Office of Aviation Safety, the Office of Airports, and the Air Traffic Organization.

There are three sectors that comprise space activities in the United States: the civil sector, which is overseen by NASA; the military sector, for which the Department of Defense has responsibility; and the commercial sector, which is the purview of the FAA. In accordance with federal statute, it is the mission of AST to ensure protection of the public, property, and the national security and foreign policy interests of the United States during commercial launch and reentry, and to encourage, facilitate, and promote commercial space transportation. While we take all of our statutory charges seriously, our top priority is safety. To carry out our safety responsibilities, we develop and issue regulations; grant licenses, permits, and safety approvals; and conduct safety inspections during every licensed or permitted launch. To date, we have an unblemished safety record: 204 safe launches, without any loss of life, serious injuries, or significant property damage to the general public.

We are also responsible for licensing the operation of launch and reentry sites or “spaceports,” as they are popularly known.  Since 1996 we have licensed the operation of the California Spaceport at Vandenberg Air Force Base; Spaceport Florida at Cape Canaveral Air Force Station; the Mid-Atlantic Regional Spaceport at Wallops Flight Facility in Virginia; Mojave Air and Space Port in California; Kodiak Launch Complex on Kodiak Island, Alaska; the Oklahoma Spaceport in Burns Flat, Oklahoma; Spaceport America near Las Cruces, New Mexico; and Cecil Field in Jacksonville, Florida.

Development of these sites is necessary for the growth and success of the industry. For that reason, last year the FAA awarded grants for spaceport development. While the amounts were modest, the investments will facilitate safety and growth of future spaceport development and should ultimately inspire additional private investment in commercial space transportation.

Commercial space transportation research efforts were enhanced last year by the establishment of the Center of Excellence for Commercial Space Transportation, led by New Mexico State University, Las Cruces.  The other institutions that comprise the center include Stanford University; the Florida Institute of Technology in Melbourne; the New Mexico Institute of Mining and Technology in Socorro; the University of Colorado at Boulder; the University of Texas Medical Branch, Galveston; and the Florida Center for Advanced Aero-Propulsion — a research consortium made up of the University of Florida, Florida State University, and the University of Central Florida.  The Center of Excellence is a partnership between academia, industry, and government, and will carry out research necessary to maintain U.S. leadership in commercial space transportation technology and safety.

Additionally, the FAA, maintains important relationships with our interagency partners.  We continue our partnership with the Air Force through our Common Standards Working Group where we coordinate on safety issues for expendable launch vehicles. We also work with the White House, NASA, and the Departments of Commerce, State, and Defense in the development of interagency policy for the industry, including the National Space Policy. We consult with the State Department regularly to promote our commercial space transportation guidance abroad.

The Administration’s 2010 National Space Policy establishes specific goals to begin managing space traffic, rather than just monitoring it. Space Traffic Management would enable us to obtain knowledge of the orbital environment, track space traffic and debris, and increase safety in the orbital environment. The FAA will play a central role in developing new national Space Traffic Management capabilities, along with the Departments of Defense, State, and Commerce; the Office of the Director of National Intelligence; NASA; and the Federal Communications Commission. This collaboration will provide global benefits.

Today and Moving Forward

As FAA continues the work of overseeing and assisting the safe development of the commercial space transportation industry, the space community as a whole finds itself at a crossroads. Last month, we celebrated the 50^th anniversary of human space flight. Next month, NASA will conduct its final space shuttle launch. While this is a bittersweet event for all space enthusiasts, it is also an exciting time and an opportunity to begin the next chapter in space access, travel, and development. After the completion of Atlantis’ final mission, NASA is planning to rely on private industry to launch cargo, and eventually crew members, to and from the International Space Station (ISS), thereby enabling NASA to focus its attention on exploring the solar system.  It will be the FAA’s responsibility to license and regulate those commercial launches to the ISS.

Throughout the past 50 years, NASA has become the world leader in human spaceflight, amassing vast experience and a wonderful track record in space travel. There is no equal. Similarly, during the past 50 years, the FAA has achieved a stunning record of safety in commercial aviation.  We are now leveraging that half-century of experience and safety acumen in our regulation and oversight of the commercial space transportation industry.

Working in tandem, the FAA and NASA can bring best practices and our best experiences to bear on the future development of a safe and robust commercial space industry for our nation – a priority of the Administration.  Working with NASA and other experts, we can ensure the United States maintains its leadership role as human space flight becomes a reality for the commercial industry and private sector development increases to meet demand.

One of the concerns we have heard expressed, and which members of this subcommittee may share, pertains to the demand for commercial launches to low Earth orbit: Is there a market? What does that market look like now and in the future? Is it sustainable?

To answer these questions, Congress directed NASA, in coordination with the FAA, to conduct an assessment of the potential non-Governmental market for commercially-developed crew and cargo transportation systems and capabilities. Assessments by NASA and the FAA reveal a diversity of opinion among the space community regarding the size of the non-Governmental market, as well as the price of a ticket to space. These assessments also show, however, that government investment in the commercial space industry is vital to ensuring market sustainability. NASA investments to date have paid huge dividends for industry, providing new capabilities and enabling the development of new, lower-cost launch systems. Multiple American companies – including small, entrepreneurial enterprises and large, established aerospace corporations – have announced that they are ready, willing, and able to meet NASA’s future needs, as well as those of non-Governmental customers.

The future of cargo and commercial crew transportation to low Earth orbit is a coming reality, but the largest near-term expansion in activity will be in suborbital spaceflight.  In calendar year 2010, there were four licensed launches: two Falcon 9 test fights and two satellite deployment missions—a Delta II and a Delta IV.  That same year saw the first licensed reentry, of SpaceX’s Dragon capsule.  Though this activity is light, these were important missions – all were successful.  In FY 2012, we anticipate more than 100 licensed launches. Granted, most of those will be suborbital launches, but that is still quite a change.  This dramatic increase in launch numbers will provide the FAA and the space community with important data and facilitate significant improvements throughout the industry.

The President’s FY 2012 Budget

The Administration’s FY 2012 budget request for AST totals approximately $26.6 million and provides for 103 full-time employees (FTEs), at a cost of approximately $15.8 million. The office's request for non-pay activities totals approximately $10.8 million. The request includes base funding of $15.4 million plus programmatic increases of $11.23 million and 32 FTEs to develop and implement additional safety processes and requirements specifically for commercial human spaceflight and space traffic management, as well as to incentivize advancements in low-cost access to space.  Key outputs of the request include a projected 6 license and permit applications, 40 launch or reentry operations inspections, 8 launch site inspections, 5 environmental assessments, plus new rulemaking products, the Commercial Space Flight Technical Center, and the Center of Excellence for Commercial Space Transportation.

Commercial Space Flight Technical Center

As outlined above, the Administration’s FY 2012 budget request for AST includes funds for a Commercial Spaceflight Technical Center. In anticipation of the commercial cargo launches to the ISS which are scheduled to begin this year and with plans for eventual commercial crew missions, it will be vitally important to enhance and ensure the highest levels of safety for commercial spaceflight operations. The staffing and activities planned for the Commercial Spaceflight Technical Center will provide the detailed engineering and operational expertise that will be required to oversee the emerging commercial spaceflight industry.

Specifically, the Commercial Spaceflight Technical Center will perform several functions: spaceflight safety, including safety inspections, and accident prevention and investigation activities; spaceflight engineering and standards, to be developed in cooperation with both NASA and the industry, for spacecraft, spaceports, flight crew and passengers, and aerospace technicians; range operations, including planning for future upgrades; and space traffic management, including interagency coordination and information sharing concerning space situational awareness, orbital debris, and collision avoidance advisories.

By co-locating the new Center at the Kennedy Space Center in Florida, we hope to benefit from the contributions of a significant number of highly-skilled aerospace workers who will be seeking employment during the next 12 months. Additionally, this co-location will allow the FAA and NASA to further strengthen our partnership by developing a knowledgeable and experienced staff to regulate future commercial space operations, and to develop the technical standards that will be needed for this emerging and critically important industry.

Although the relationship between the Commercial Spaceflight Technical Center and NASA will be vital, the Center will not duplicate NASA functions. NASA has a separate mission and is focused on operation of the International Space Station, development of a new Heavy-Lift vehicle, and exploration of the solar system. The FAA is a regulatory agency and has the statutory responsibility to oversee commercial space launches and reentries, and to ensure public safety during these operations. Establishment of the Commercial Spaceflight Technical Center will enable the FAA to strengthen its partnership with NASA, drawing on NASA’s expertise and experience in space operations and human space flight to augment the FAA’s experience in licensing and regulating commercial launches to develop a highly-skilled cadre of commercial space hardware and operations experts.

Low-Cost Access to Space Incentive

The FY 2012 budget request also includes $5 million to incentivize advancements in the commercial space transportation industry. The Low Cost Access to Space Incentive program will provide a $5 million award to the first non-governmental team to develop and demonstrate the capability to launch a 1-kilogram cubesat to orbit using a reusable launch system. 

The high cost of access to space has long been a major obstacle for civil, military, and commercial space programs.  The dream of low cost, fully reusable space launch systems has recently been demonstrated by the X-Prize competitions, but only to suborbital space.  This competition will achieve significant reductions in the cost of getting satellites, and eventually people, to orbit.

The competition will take its place in the longstanding tradition of prize competitions, such as the AnsariX Prize won by Scaled Composites SpaceShipOne (2004) and the Orteig Prize won by Charles Lindbergh (1927). These awards can lead to significant accomplishments in transportation, and the use of prizes has been very successful in enabling government and industry to come up with innovative solutions to challenging problems.  This incentive will increase the number of scientists and innovators addressing the specific problem of reusable, orbital space launch systems, and is of sufficient size to attract the investment and commitment of companies who are capable of winning the prize.

Preparing for the Future

The FAA stands ready to meet the changes and challenges we know are coming.  The industry has made significant strides toward a future that will make increasing demands on the FAA’s role as a regulator.  As activities expand in the marketplace, our role will amplify as well. To this end, we are constantly looking ahead.

In the coming months and years, it may be necessary to revisit some of the statutes and regulations that govern the commercial space launch activities of the FAA. Specifically, the FAA’s legislative authority will require expansion to ensure public safety in space and on Earth, as the commercial space flight evolves.  Potentially, there will be a need for greater regulatory authority in the areas of transportation on orbit as well as launch and reentry.  In addition, the FAA’s licensing authority will also require revision to include all operations associated with commercial hybrid launch systems and to cover all commercial cargo vehicles intentionally returning to Earth, regardless of whether they return substantially intact. We welcome the opportunity to work with Congress on these priorities.

In this time of challenge and opportunity, the FAA is mindful of our many responsibilities, and we look forward to working with this subcommittee as we tackle the challenges of shifting cargo and crew launches to the commercial sector and opening space for tourism and point-to-point transportation. The commercial space industry is ready to expand – and with your support, we are ready for lift-off.

Chairman Palazzo, Congressman Costello, and Members of the Subcommittee, this concludes my prepared remarks. I would be pleased to answer any questions you may have.

STATEMENT OF

RONALD MEDFORD
DEPUTY ADMINISTRATOR
NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION

BEFORE THE

SUBCOMMITTEE ON SURFACE TRANSPORTATION
AND MERCHANT MARINE INFRASTRUCTURE,
SAFETY, AND SECURITY

OF THE

COMMITTEE ON COMMERCE, SCIENCE
AND TRANSPORTATION
U.S. SENATE

Hearing on

 Ensuring the Safety of Our Nation’s Motorcoach Passengers

March 30, 2011

Chairman Lautenberg, Ranking Member Thune, and Members of the Subcommittee, thank you for the opportunity to update you on the activities of the National Highway Traffic Safety Administration (NHTSA) on the issue of motorcoach safety.  

I will outline the breadth of our ongoing work for you, and this will illustrate a significant body of research and regulatory activity that addresses the highest risks associated with motorcoach travel and how we have made significant progress toward mitigating these risks.   We believe our work in these critical safety areas complement recommendations issued by the National Transportation Safety Board and draft legislation currently being considered by the Congress to improve motorcoach safety.

NHTSA’s vehicle safety program includes conducting research on and developing standards for a very wide range of vehicle safety issues, enforcing those standards, and conducting defect investigations.  The motorcoach safety work is one of the important elements of the agency’s extensive research and rulemaking agenda.

Motorcoach safety is a priority for NHTSA, and we have been working very aggressively in this area.  We know that although motorcoach crashes may be relatively rare, when they do happen, they can cause a significant number of fatalities and serious injuries in a single event.  In 10 years, from 2000 to 2009, there were 338 motorcoaches involved in fatal crashes.  In 48 of the 338 motorcoaches involved in a fatal crash there was a fatality to one or more occupants (driver and/or passengers) of the motorcoach.  The remaining fatalities were to occupants of other vehicles or nonmotorists involved in a crash with a motorcoach.  The average for this period was 16 motorcoach occupant fatalities per year, but in 2004, 2005, and 2008 a few events each resulted in a large number of fatalities.  In 2011, the number of fatalities has already exceeded the annual average.

DOT Motorcoach Plan

In 2009, NHTSA worked with other modal administrations in the Department of Transportation (DOT) to develop a comprehensive systems-oriented safety strategy for enhancing motorcoach safety.  The DOT Motorcoach Safety Action Plan is based on a two-pronged approach: First, it addresses possible driver related causes of motorcoach crashes, which are: driver fatigue, inattention, medical conditions, and the oversight of unsafe carriers.  Second, it addresses the motorcoach related causes of fatalities and injuries, which are: vehicle rollover, occupant ejection, structural integrity, and fires. 

         Based on this approach 3 high priority action items related to new vehicle designs were identified and have now been completed. They were:

• Initiate rulemaking to require seat belts;
• Evaluate and consider roof crush performance requirements; and
• Assess the benefits of electronic stability control systems;

Other priority strategies included in the plan were:

• Improving tire performance;
• Improving evacuation and emergency egress;
• Improving fire safety (fire detection, fire hardening systems); and
• Data collection and analysis through the use of event data recorders.

In these areas as well, NHTSA has made significant progress and I will briefly touch on all of the items related to new motorcoaches.

Electronic Stability Control

Directional loss of control and rollover are causal factors in heavy vehicle crashes, including motorcoaches.  By selectively applying the brakes on a vehicle, electronic stability control is a technology designed to reduce these types of crashes.  NHTSA has been aggressively testing these systems and is currently working on a rulemaking proposal, which we expect to issue later this year.  

Improving Tire Performance

Tire performance plays a critical role in ensuring the safety of occupants in every kind of vehicle – and motorcoaches are no exception.  We issued a proposal to improve tire performance on September 29, 2010.[1]  That proposal included new tests aimed at improving the performance of new tires even when they are underinflated.  We are now working to finalize the rule.

Seat Belts

Between 1999 and 2008, there were 24 fatal motorcoach rollover events that resulted in 97 deaths.  Seventy-six of those 97 were ejected from the motorcoach.  We initiated a proposal to require seat belts in all seating positions in motorcoaches on August 18, 2010.[2]  This rule is intended to prevent ejections and keep passengers in their seats, thereby mitigating fatalities and injuries in crash and rollover events.  The proposed rule provides a definition of a motorcoach and explores the issue of retrofitting seat belts on existing motorcoaches.

Some manufacturers and operators have already started to equip their motorcoaches with seat belts.  For example, Greyhound (First Group) is currently installing belts on new buses. 

Improving Fire Safety

There are more than 2,200 bus fires annually, which add up to a $24.2 million annual cost in direct property damage.  NHTSA collaborated with the National Institute of Standards and Technology to conduct research on motorcoach flammability.  This research program looked at developing more stringent flammability and fire detection requirements.

The program also reviewed existing flammability standards and procedures, as well as various test procedures to assess the flammability of materials used in both the interior and the exterior of motorcoaches.  

We conducted wheel-well mockup studies to examine how fires propagate into motorcoach occupant compartments, countermeasures for fires such as fire hardening, fire detection, and fire suppression systems, and the tenability of the occupant compartment during a wheel-well fire.  In December 2010, we published a report on the results of the first year of this research.[3]  The final report on this research will be published this summer.  We will assess the results of the research and make a decision whether to initiate rulemaking next year.

Improving Rollover Structural Integrity

By improving the structural integrity of the vehicle, we can improve the chances of adequate survival space for occupants in the event of a rollover, and we can strengthen the bus structure surrounding the windows to improve their effectiveness in preventing ejections.

NHTSA completed research on roof-crush test procedures and the agency is currently developing a rulemaking proposal, which we expect to issue late this year.  This NPRM will consider NTSB’s recommendation for performance standards for motorcoach roof strength, which is on its Most Wanted List.

In addition to studying whether we can strengthen the bus structure surrounding the windows to improve their effectiveness in preventing ejections, we are looking into window glazing and window retention.  Initial research and testing has been completed and we will make a decision whether to initiate rulemaking by the end of the year.

Improving Evacuation and Emergency Egress

In the area of improved emergency evacuation, NHTSA and FMCSA completed research in 2010[4] at the Volpe research center on motorcoach emergency egress requirements and the need for enhancements to effectively facilitate passenger evacuation.  We will make a decision whether to initiate rulemaking this summer.  

The agency’s work on improving evacuation and emergency egress considers NTSB’s Most Wanted List recommendation to revise the standard to require floor level exits that can easily open and remain open during emergency egress.[5]  It also considers recommendations to revise standards to require emergency lighting and/or retroreflective material to identify exits, as well as a recommendation to conduct simulations to evaluate current emergency egress designs.[6]

Data Collection and Analysis

Finally, in the area of data collection and analysis and the use of Event Data Recorders (EDRs), NHTSA has monitored the Society of Automotive Engineers (SAE) Truck and Bus Event Data Recorder Subcommittee in the development of SAE Recommended Practice J2728, “Heavy Vehicle Event Data Recorders.” These were developed to define specifications and requirements for heavy vehicle EDRs for the reliable and accurate recording of the crash parameters relevant to heavy vehicles.  We will make a decision whether to initiate rulemaking on this issue this year.

Conclusion

Mr. Chairman, NHTSA shares your desire to complete the actions that are identified in the DOT motorcoach plan.   NHTSA is devoting a significant amount of its research and rulemaking resources toward improving the safety of motorcoaches and the recent crashes in New York and New Jersey highlight why we must continue to do so.  We recognize that these vehicles carrying so many of our Nation’s citizens have the potential in a single crash to injure and kill a large number of people.  That is why we have placed such a high priority on improving the safety of these public transportation vehicles.

Chairman Lautenberg, Ranking Member Thune, and members of the Subcommittee, thank you for your consideration and thank you for your ongoing efforts to improve highway and motorcoach safety.  I would be pleased to answer any questions.

Statement of

Dr. Lourdes Maurice, 
Executive Director of the Office of Environment and Energy,
Office of Policy, International Affairs, and Environment,
Federal Aviation Administration

before the

Senate Committee on Commerce, Science, and Transportation’s
Aviation Subcommittee

hearing on

"Aviation Fuels: Needs, Challenges, and Alternatives."

July 28, 2011

Madam Chair, Senator Thune, and Members of the Subcommittee:

Thank you for inviting me to testify before you today on “Aviation Fuels: Needs, Challenges, and Alternatives.” I am the Executive Director of the Office of Environment and Energy for the Federal Aviation Administration (FAA).  In that role, I also serve as the environmental team co-leader for the Commercial Aviation Alternative Fuels Initiative (CAAFI).  I am pleased to speak to the Subcommittee today about the development and deployment of sustainable alternative jet fuels.

Today, commercial aviation faces a number challenges--fuel cost, environmental impacts and energy security--that sustainable jet fuels can help to address. Fuels that are derived from biomass may offset a portion of the carbon produced by the aircraft as well as mitigate air quality issues such as emissions of sulphur and particulate matter.  And domestic alternatives to petroleum jet fuel can expand and diversify the jet fuel supply and contribute to price stability and supply security.

Industry, government and academia all need aviation to get these fuels off the drawing board and into the gas tank.  Indeed, the Future of Aviation Advisory Committee, which was founded by Transportation Secretary LaHood in 2010, singled out aviation fuels and the environment in one of its recommendations.

I believe that today’s hearing is well timed.  Aviation continues to make enormous progress in identifying, testing, and approving alternative jet fuels for use by commercial airlines.  As you may know, the FAA has the responsibility to make sure that any aircraft, aircraft engine or part, or fuel that is used in aviation is safe and performs to set standards.  In partnership with industry, we have identified a number of alternative jet fuels (including sustainable jet fuels) that can replace petroleum jet fuel without the need to modify aircraft, engines, and fueling infrastructure.  These are often referred to as “drop in” fuels.  Drop-in fuels are a near-term solution to addressing aviation environmental and energy challenges, and enable us to maintain the existing commercial airline fleet.

The aviation sector is well positioned to adopt alternative fuels and is in fact beginning to do so.[1]  Moreover, this effort is critical to achieving the level of environmental and energy performance that will allow sustained growth of the nation’s aviation system. FAA has set an aspirational target for use of 1 billion gallons of alternative jet fuel per annum by 2018.

Overview of FAA Role and Activities

Alternative jet fuels are a key component of the FAA’s environmental and energy approaches for Next Generation Air Transportation System (NextGen).  Over the past 5 years the FAA has taken a comprehensive approach, in cooperation with other departments and agencies, industry, and academia to address barriers, and enable the adoption, production, and end use of sustainable jet fuels in commercial jet aircraft.  Beginning in 2006, we have worked with industry and government partners through CAAFI to address the business, research and development, environmental, and certification issues related to creating “drop-in” sustainable jet fuels for today’s commercial aircraft.

The FAA’s role has been multifold.  It includes support of fuel properties and performance testing and demonstration; facilitation of fuel approval by the industry standard setting organization, ASTM International; conducting environmental measurements and analysis; and facilitating information exchange among industry and government stakeholders as a co-sponsor of CAAFI.  FAA has worked in partnerships with the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA), the Department of Energy (DOE), the Environmental Protection Agency (EPA), the Department of State (DOS), Department of Commerce (DOC), and the Department of Agriculture (USDA) to advance technical research and development, as well as environmental, fuel standard setting, and deployment efforts needed to support sustainable alternative fuels for jet aircraft.

The FAA’s Continuous Lower Energy, Emissions and Noise (CLEEN) program, as well as NextGen investments in environment and energy research, are vehicles available to address the certification and environmental issues of alternative fuels. We appreciate the Subcommittee’s support for these efforts.

Fuel Approvals

FAA does not directly approve jet fuel.  Rather the FAA approves aircraft to operate on fuel whose quality and safety is managed by industry-developed specifications, such as ASTM International.  FAA personnel and funding have, however, been crucial to facilitation of this specification development process at ASTM International.  The ASTM alternative jet fuels standard (also known as Specification D7566) was first issued in September 2009 and at that time approved use of blends of up to 50% synthetic fuels made via the Fischer-Tropsch process, which produces synthetic fuels from feedstocks including coal, natural gas or biomass.[2]  The specification is structured to allow for the addition of new fuels as they are qualified for use. The writing of the specification and its revisions are accomplished via a collaborative and consensus driven process that is facilitated by FAA’s leadership of the CAAFI certification and qualification team.

On July 1, 2011, the aviation community reached a major milestone when ASTM International approved a revision of the D7566 specification to add alternative jet fuels made from bio-derived oils.  Known as HEFA (hydroprocessed esters and fatty acids) jet fuels, they can be made from renewable plant oils such as camelina, jatropha, and algae or waste fats which are then mixed with petroleum jet fuel up to a 50% blend level.  This represents the culmination of more than 3 years of collaborative work by FAA, DOD, and industry, including the engine and aircraft manufacturers, airlines, and fuel suppliers. The approval assures the safety and performance of the fuel and is enabling, for the first time, the commercial use of biofuel by airlines globally.

HEFA was the second alternative jet fuel to be approved for use by ASTM since 2009, but it will not be the last.  Cooperative testing of additional advanced alternative jet fuels is already underway by FAA, DOD, and industry.  From FAA’s perspective, this is part of a strategic approach to approving as many commercially viable and environmentally sustainable alternative jet fuel options as possible.

Some of the fuel testing to support approval is being done through the FAA’s CLEEN program.  CLEEN supports maturation of green engine and airframe technologies and development and testing of alternative fuels.  Under the CLEEN program, FAA leverages the Federal investment by partnering with industry.[3]  For example, CLEEN has supported the Boeing Company to conduct aircraft fuel system materials compatibility testing of HEFA fuels.  With Honeywell, we are testing the use of fully renewable jet biofuels.  With Rolls Royce, we are doing fuel property, performance and engine testing to support evaluation of early stage, promising novel sustainable jet fuels.

Through the Department of Transportation/Research and Innovative Technology Administration’s (DOT/RITA) Volpe National Transportation Systems Center (Volpe Center), the FAA will shortly be announcing grant awards to benchmark fuel quality control procedures, to conduct engine durability tests with alternative fuels, and to perform key testing to support qualification and certification of novel jet biofuels from alcohols, pyrolysis, and other processes.  These are intended to support the next round of fuel approvals that are currently targeted to begin in 2013.

Environmental Assessment

In addition to certification and qualification of fuels, FAA is working to improve our understanding of the environmental benefits and impacts of alternative jet fuels.  The U.S. has National Ambient Air Quality Standards for particulate matter emissions, and 44% of our 50 largest airports reside in areas of non-attainment.  Common to all alternative fuels under consideration is their potential to reduce particulate matter emissions.  Working with NASA, we have obtained direct measurements of in-service aircraft engines that clearly validate these benefits.

Through the Partnership for AiR Transportation Noise and Emission Reduction (PARTNER) Center of Excellence, FAA is funding assessments of emissions for alternative fuels including sustainable jet fuels.[4]  The National Academies of Science’s Airports Cooperative Research Program (ACRP) is supporting a project to understand the costs and the potential air quality benefits of alternative jet fuel use at commercial airports.

Reducing aviation’s contribution to carbon dioxide emissions and climate change impacts are key potential benefits of alternative jet fuels.  Measuring those benefits requires quantifying the full life cycle emissions from alternative fuel production, distribution, and operation.  The FAA and the U.S. Air Force are jointly funding the development of greenhouse gas life cycle analyses (LCA) through the FAA’s PARTNER Center of Excellence.[5]Results show that certain alternative jet fuels could realize CO2 lifecycle reductions as high as 80 percent.  We continue to work and consult with EPA, DOE and a team of researchers to improve and broaden these analyses.  The CAAFI Environment team, which FAA co-leads, is similarly involved in coordinating a broad group of experts to look at sustainability questions such as water use, food versus fuel, and invasiveness to provide insight into how sustainability certification may be conducted. And, through Volpe Center grant awards mentioned above, the FAA will support evaluation of biofuel sustainability criteria.

Key Recent Developments

A review of recent developments will give you a sense of the tremendous momentum behind alternative jet fuels and demonstrate the broad industry and interagency cooperation and innovative partnerships that are providing the push. 

Jet Biofuels Approval and Flights

The July 1^st 2011, ASTM International approval of HEFA alternative jet fuels made from bio-derived oils was a landmark. This has been followed by the first commercial service flights with HEFA biofuels by four airlines in Europe and has energized plans for possible production and fuel purchase agreements here in the United States.

Paris Air Show Alternative Aviation Fuels Showcase

In June 2011, the FAA and CAAFI worked with the Department of Commerce to showcase alternative jet fuel suppliers and U.S. and international airlines as a central event at the Paris Airshow.  The event included visits of support by Secretary of Transportation Ray LaHood, FAA Administrator Babbitt, Acting Secretary of Commerce Sanchez, and Secretary of Agriculture Vilsack.  It was successful in focusing the attention of the biofuels and agriculture communities and the media on the need and opportunity presented by aviation.  Significant industry highlights at the airshow included the announcement by 7 U.S. airlines of negotiation with biofuel supplier Solena for 16 million annual gallons of fuel from waste in Northern California and two successful transatlantic biofuel flights to the airshow by Honeywell and Boeing.

U.S. – Brazil Partnership for the Development of Aviation Biofuels

During President Obama’s visit to Brazil in March 2011, the United States and Brazil announced the creation of a “Partnership for the Development of Aviation Biofuels” under the Memorandum of Understanding between the United States and Brazil to Advance Cooperation on Biofuels signed on March 9, 2007.  The FAA is a key participant and is engaged with the DOD, DOE, USDA, and other federal departments and agencies to identify and carry out cooperative activities with Brazilian counterparts under this MOU.  This agreement represents cooperation by the world’s two largest biofuels producers and two important aviation States to support the development of sustainable jet fuels.  It builds upon and will leverage existing collaboration with Brazil already underway via CAAFI.

FAA and USDA Partnership to Develop Renewable Jet Fuels

In October 2010, the FAA and the U.S. Department of Agriculture (USDA) signed a 5 year agreement that creates a framework of cooperation between FAA’s Office of Environment and Energy, the USDA’s Agricultural Research Service (ARS), and the USDA Office of Energy Policy and New Uses (OEPNU).  Under the partnership, the three offices bring together their experience in research, policy analysis and air transportation to assess the availability of different kinds of feedstocks that will be needed by biorefineries to produce sustainable jet fuels.  The collaboration has created the feedstock readiness level (FSRL)[6] tool, developed by the USDA and FAA to enable the determination of the stage of readiness of agricultural or forest-based feedstock for the production of commercial and military aviation biofuels.  A public version is expected to be released soon.

Farm to Fly Partnership Formed between Airlines, USDA, and Boeing

In July 2010, the USDA joined with CAAFI sponsor Air Transport Association of America (ATA) and the Boeing Company in a resolution to “accelerate the availability of sustainable aviation biofuels in the United States, increase domestic energy security, and establish regional supply chains and support rural development.”  The agreement included the formation of a “Farm to Fly” working group that is identifying opportunities for accelerating a domestic jet biofuel production industry and supporting economic development in rural communities.  This is a promising innovative effort that can further the interests of U.S. agriculture and U.S. aviation.

Challenges Ahead

To achieve the successful development and deployment of sustainable jet fuels in commercial aviation, we view the following areas as hurdles, as well as opportunities for future focus: 

We must foster the development and production of appropriate feedstocks for aviation biofuels.  Expanding the number and availability of crops appropriate for jet fuel conversion and optimizing their production are necessary to reduce costs, enable commercial deployment, and maintain sustainability.  Our work with the USDA on the feedstock readiness level is a promising start, and we expect to continue to build on this collaboration.

We must continue to support the development, testing and approval of advanced biofuel conversion processes for high energy “drop in” hydrocarbon biofuels.  Our past successes with Fischer-Tropsch and HEFA fuels would not have been possible without the leadership and contributions of the FAA, and this level of support must be maintained to move forward with new renewable and sustainable jet fuels.   In addition to the CLEEN program and Volpe Center grant awards, the FAA resources will need to be allocated to support the ASTM International process to qualify and approve these new fuels.  Investments by DOE, USDA, and DOD’s Defense Advanced Research Projects Agency (DARPA) in these areas have been and will continue to be crucial.  FAA must continue to work with DOD to coordinate the qualification and certification testing of both commercial and military fuels to make the best use of our limited resources.

The next hurdle is accurately quantifying environmental impacts.  Assessments of both air quality and greenhouse gas life cycle emissions impacts must continue to be timely and thorough as new fuel options emerge.  For example, FAA, in collaboration with EPA and NASA, needs to populate emissions prediction models with measured emissions data for emerging sustainable jet fuels.  Acquiring such data is empirical in nature and requires significant testing and investment.  Reducing the uncertainties associated with land use changes, fertilizer use, and impacts on the quality and quantity of water resources, greenhouse gas inherent in-life cycle analyses (that is, from harvest to processing to transport and use of the sustainable jet fuels) will also require significant effort and investment.  The collaboration of all stakeholders involved is needed to ensure an agreeable and accurate framework.  We must continue to facilitate defined national and international sustainability criteria and Life Cycle Analysis (LCA) methodologies to provide certainty and compatibility regarding how fuels will be judged and accepted.

The final hurdle is the lack of jet biofuel infrastructure investment by private industry.  The economic slowdown diminished the ability and interest of conventional investment sources to respond to the opportunities that aviation uniquely provides.  However, we believe that successful production facilities can be built with relatively modest investment at locations which combine feedstock availability, existing biofuel infrastructure, need for air quality gains, access to airports and U.S. airlines eager to use sustainable jet fuels.  Progress being made by the Farm to Fly effort and via USDA, DOE and DOD programs suggest that early deployment may be close at hand, but will continue to require near term support.

Aviation’s dependence on high-density liquid hydrocarbon fuels for the foreseeable future is perhaps unique.  Unlike surface transportation, we won’t have an electric option in the near future.  Another unique characteristic of U.S. commercial aviation is concentrated fueling infrastructure, where 80% of all jet fuel is used in only about 35 locations, i.e., at our busiest airports.  Airports also provide an opportunity for distributing the co-products of sustainable jet fuel production (such as diesel) due to the many different fuel users on airports. The National Academies of Science’s ACRP is sponsoring projects to assess the opportunity presented to airports of alternative fuel production and distribution. These realities of dependence and concentrated infrastructure should lead to aviation becoming a “first mover” in the deployment of alternative fuels.  A final plus is the enthusiasm and commitment of the aviation industry to pioneer sustainable alternative jet fuels. 

The nation has often counted upon the skills of the aerospace industry to lead the way in technical innovation.  Renewable jet fuels offer the opportunity to team aerospace science and technology efforts with those of agriculture, energy, and environment to address the challenges that we face. 

Madam Chair and Members of the Subcommittee, thank you again for the opportunity to testify on how the aviation community is leading the way to develop and realize the potential of emerging aviation sustainable jet fuels.  This completes my prepared remarks. I welcome any questions that you may have.

Department of Transportation
Statement of the Maritime Administrator
David T. Matsuda

Before the

Sub-Committee on Coast Guard and Maritime Transportation
United States House of Representatives

On

Creating Jobs and Increasing U.S. Exports by Enhancing the Marine Transportation System

June 14, 2011

Chairman LoBiondo and Ranking Member Larsen, thank you for the opportunity to present testimony to the Subcommittee regarding the creation of jobs and increasing exports through enhancements to the Marine Transportation System.  I am David Matsuda, Maritime Administrator, testifying on behalf of U.S. Transportation Secretary Ray LaHood, Chair of the U.S. Committee on the Marine Transportation System or “CMTS.” 

Before I begin, I would like to note that today, Flag Day, we remember our Nation’s history and the many people who struggled, and sometimes perished, to ensure the freedom we enjoy today.  Less than a month ago, on May 19, we observed National Maritime Day, and were privileged to honor the memory of Richard Oliver Kelleher of New Jersey.  He joined the merchant marine during World War II to help preserve our Nation’s freedom.  He was just 19 years old when he died in a torpedo attack.  Richard’s story is an example of the courage and commitment to serve that still exists in the men and women who go to sea today.  I was proud to present six posthumous awards to Herb Kelleher, Richard’s brother, with gratitude for Richard’s courage in time of ultimate sacrifice.

The emphasis of today’s hearing is on the MTS, which accommodates 78 percent of U.S. exports and imports by weight and 48 percent by value. [1]  In addition to supporting the needs of U.S. exporters and industry, it is an important source of employment in its own right.  The scope of the system is huge, as it includes Federal navigation channels, harbors, port gateways, service industries and users, and intermodal connectors.  The MTS supports millions of American jobs, facilitates trade, and moves people and goods in a safe, secure, cost-effective and energy-efficient manner.  In addition to supporting the needs of U.S. exporters and industry, it is an important source of employment in its own right.

More than 95 percent of the world’s consumers live outside U.S. borders, representing a marketplace in which our Nation must compete successfully if we are to sustain and improve our quality of life during the coming decades.  Export markets are particularly important for our manufacturing and agricultural industries.  Transportation, including highways, rail, and water, provide an integrated system to support the movement of our exports.  In 2010, the first year of the National Export Initiative (NEI), coordinated by the Department of Commerce’s International Trade Administration, exports rebounded to near-2008 levels and have contributed to our nation’s overall economic recovery.  According to Secretary of Commerce Locke, after dropping 14.6 percent in 2009, exports grew 16.6 percent in 2010, compared with an average annual rise of 11.2 percent during 2002-2008.  Exports of goods and services in 2010 reached $1.83 trillion, the second highest annual total on record and the largest year-to-year percent change in over 20 years. In 2010, exports contributed to nearly half of the 2.9 percentage point growth in real GDP.[2]  In 2008, when exports of goods and services reached $1.84 trillion, U.S. goods and services exports supported an estimated 10.3 million jobs in the United States, of which goods exports supported 7.5 million jobs, including 3.7 million manufacturing jobs (27 percent of all jobs in the manufacturing sector) and 1 million jobs on and off the farm.[3]

MARAD continues to carry out a number of initiatives and grants as part of our efforts to support American exports.  I am pleased to report to the Subcommittee that I recently approved the Federal financing of a $290 million export project at Eastern Shipbuilding in Panama City, FL.  This project will result in the creation of 300 new shipbuilding jobs for skilled workers as they construct five new offshore supply vessels in the coming years for service in Brazilian waters.  Working closely with the shipyard and project sponsors to complete the financing package, the MARAD team pulled together to create a deal which satisfied Federal requirements and beat vigorous competition from foreign countries offering to build these ships.

MARAD is also implementing DOT’s program aimed at increasing the use of our system of inland waterways and coastal ports to move freight.  This program, America’s Marine Highway, will directly support the National Export Initiative.  For example:

• The California Green Trade Corridor project will establish a vessel service to shuttle containerized cargoes between the inland ports of Stockton and West Sacramento and the seaport of Oakland.  When this service becomes operational early next year, shippers of agricultural exports throughout the Central San Joaquin Valley- one of the world's most productive agricultural regions- will be able to load cargo for export closer to the place from which it is produced.  This could lower the transportation cost to export their goods, thereby making the region more competitive in world markets.  DOT is investing $30 million to help this project become a reality. 
• Similarly, a Marine Highway solution could open the door for even more trade with Canada, our largest trading partner, through the potential for waterborne-enabled exports offered by the Great Lakes.  In 2010, U.S. agricultural exports to Canada were valued at $16.8 billion.

Furthermore, these services offer a transportation solution that consumes less oil, generates fewer green house gas emissions and causes less damage to our roads, bridges and tunnels than the highway alternative – all the while helping open markets for export opportunities.

The President understands that continued economic growth and competitiveness in the global economy will require the significant expansion of U.S. exports. To achieve this goal, the President launched the NEI with the goal of doubling U.S. exports by the end of 2014.

American exporters cannot participate as effectively in the global economy if they cannot get their products to foreign markets in a cost-effective, reliable, and expeditious manner.  America’s highways, railways, bridges, waterways, runways, and ports represent the beginning of a very long global logistics chain that reaches almost every market in the world.

The 2009 American Recovery and Reinvestment Act (Recovery Act) provided billions that supported MTS-related projects including small shipyard grants, ferry boat discretionary grants, bridge alterations, port security grants, and civil works projects.  Congress’s creation of the Transportation Investment Generating Economic Recovery (TIGER) discretionary grant program under the Recovery Act has increased the nation’s port and rail investment.  This program has been subsequently reauthorized under the FY 2010 and 2011 Appropriations Acts.  Prior to TIGER, these sectors were difficult to reach with Federal dollars, even when we knew of major public benefits that would result from Federal investments in them.  DOT has used the TIGER program to fund major improvements to the MTS, making 14 port investments totaling more than $215 million in the States of Alaska, California, Florida, Hawaii, Illinois, Maine, Mississippi, Oregon, Rhode Island, Tennessee, and Washington.  

DOT has also made major TIGER investments in intermodal rail projects that link ports to the interior of the Nation.  Multimodal, multi-state projects to improve freight rail capacity were among the biggest recipients of TIGER investment.  The Crescent Corridor (Tennessee and Alabama), CREATE (Illinois), and National Gateway (Ohio, Pennsylvania West Virginia, and Maryland) freight rail projects each received about $100 million.  Many other important rail projects have also been funded under the two completed rounds of TIGER grants (a third round is ready to start).

The Federal investments in these port projects alone may ultimately generate approximately 2,300 job years of employment for Americans during their construction (of which two-thirds will be direct and indirect jobs).[4]  More importantly, however, many of these projects will facilitate the production and export of products from U.S. factories and farms to markets throughout the globe and will play a critical role in supporting the NEI and long-term employment in the United States.

America’s Marine Highway program, although aimed primarily at the domestic movement of freight, will also serve to move containers with export cargos to U.S. ports and will provide jobs for mariners who will be accessible to the United States for crewing sealift capacity during times of national emergency.  With grant authority established by the National Defense Authorization Act for Fiscal Year 2010 and with $7 million in funds appropriated by the Consolidated Appropriations Act of 2010, DOT announced the award of three Marine Highway project grants and funding for three research studies of potential Marine Highway services.

MARAD’s Title XI and Small Shipyard Grant (Assistance to Small Shipyards) programs provide loan guarantees and grants, respectively, supporting the industry, which can be an engine for efficiency and capacity improvements and economic growth.

Congress created the Small Shipyard Grant Program in the National Defense Authorization Act of 2006 to support capital improvements to qualified shipyards.   Congress first funded the program with $10 million through the Consolidated Appropriations Act of 2008, followed in 2009 by $117.5 million in funding through the Omnibus Appropriations Act of 2009 ($17.5 million) and American Recovery and Reinvestment Act of 2009 (Recovery Act) ($100 million), $15 million in funding in the Consolidated Appropriations Act of 2010, and $9.8 million in funding in the Department of Defense and Full-Year Continuing Appropriations Act of 2011.  This program is intended to improve the ability of domestic shipyards to compete for domestic and international commercial ship (including tug and barge) construction. 

Overall, for the first 3 years of this program, MARAD awarded a total of 120 grants to 105 different shipyards (awards for the 2011 program are still pending).  These shipyards are located in 28 States and Guam.  Grants have been used to fund floating drydock construction and modernization, acquisition of large Travelifts (up to 1,000 tons), material handling equipment such as cranes and forklifts, steel working machinery, shipyard infrastructure improvements, and training of shipyard employees.  To date, the 70 small shipyard projects funded through the Recovery Act have generated a total of more than 800 job years, with about 650 of these being in direct and indirect jobs.  By the time all of the $98 million in Recovery Act small shipyard grant funds are expended (sometime in 2012), a total of almost 1,100 job years of work will have been generated.

The Department of Transportation (DOT), the U.S. Coast Guard (USCG), U.S. Army Corps of Engineers (USACE), National Oceanographic and Atmospheric Administration (NOAA) and many other Federal agencies all have a role in the MTS.  These agencies are working individually and in concert to ensure that the MTS continues to meet the present and future needs of our nation.  They meet to discuss issues under the auspices of the CMTS, an interagency forum comprised of the Federal agencies that have a role in the MTS.  The CMTS is actively engaged with the National Export Initiative Trade Policy Promotion Committee (TPCC) to facilitate the improvement of the U.S. supply chain.  CMTS individual and interagency efforts will focus on maintaining ports and waterways to support export trade through improving our supply chain competitiveness, and ensuring a safe and reliable MTS.

Examples illustrating this effort include integrating NOAA’s coastal ocean forecast modeling with its navigation data and USACE channel depths to allow bulk cargo and container vessels to load more heavily and to time arrivals and departures more accurately.  NOAA Physical Oceanographic Real-Time System (PORTS®) in particular is a very useful tool—available at a relatively low cost, but with substantial benefit to the environment and the economy.  NOAA and the USCG have collaborated to provide PORTS® information to mariners through the USCG Automated Identification System.  Given the limited channel depths available in most U.S. ports, port operators can use PORTS® integrated with other navigation data to maximize throughput and economic gain with less risk of running aground and injuring the environment or vessels. This adds to U.S. supply chain efficiency and competitiveness, and the benefits also add up quickly for U.S. exporters. Every additional inch of water draft available to a container ship means more containers on a larger vessel and a better value.  For example, an inch of draft can mean 9,600 more laptop computers, at a value of $8.5 million.

The Army Corps of Engineers makes considerable investment into our water infrastructure including locks, dams, and Federal channels.  The annual budget for its commercial navigation program is approximately $1.6 billion for FY 2012.  In allocating these funds, the Corps gives priority to investments in the assets that will provide the greatest economic return to the Nation, and to the maintenance of existing waterways with highest levels of commercial use.  In addition, NOAA is leading an interagency team to facilitate the coordination of Federal navigation services to the mariner in order to facilitate safer and more efficient marine transportation.

The International Trade Administration has been engaged with DOT in a proactive program to address national transportation supply chain components of the NEI as a drive of pricing and U.S. competitiveness.  ITA and DOT have joined in a series of transportation stakeholder listening sessions that are helping to define the foundational issues that shippers find help or hinder their ability to compete in the global marketplace.  This work complements the five pillars of the NEI which include improving trade advocacy, increasing access to credit, removing trade barriers, enforcing trade rules, and promoting balanced trade policies.

In a letter to the President, dated March 11, 2011, the President’s Export Council, which includes CMTS members, noted that a “robust, reliable, and efficient domestic transportation infrastructure is the critical ‘first-step’ on the road to more exports.”  The DOT and all CMTS member Departments and agencies recognize that the MTS is a critical cog in the U.S. supply chain between the navigable waterway and landside connectors to the stores and shelves of America’s heartland.

Shipping capacity to carry U.S. exports has been increasing.  In 2010, 7,579 oceangoing vessels made 62,747 calls at U.S. ports, accounting for nearly eight percent of vessel calls globally, a 13 percent increase over 2009.[5]  The vessels making these calls include bulk ships carrying iron, coal and grain for export; heavy-load vessels carrying cargo such as large airplane wings for Boeing 747 jets; containerships carrying general export and import cargo for markets around the U. S. and the world; tankers carrying oil and gas used to power our cars and heat our homes; and roll-on roll-off vessels carrying General Motors, Chrysler, and Ford vehicles for export.  These statistics, alone, emphasize the value of CMTS efforts to coordinate and integrate navigation services to provide the best information in support of best navigation practices and to reduce duplication of effort.

Bulk cargo exports, such as grain, are a significant contributor to the U.S. economy.  The U.S. Department of Agriculture recently reported that farm exports alone will support more than one million jobs in America this year.[6]  In May 2011, Secretary of Agriculture Tom Vilsack reported that farm exports reached an all-time high of $75 billion during the first half of Fiscal Year 2011.  This is 27 percent higher than the same period last year.[7]  Further, the U.S. Department of Commerce reports that for every $1 billion in overall goods and services we export, 5,000 U.S. jobs are supported. [8]  For ocean exporters, grain producers, manufacturing, and other industries, the MTS is a nexus between the United States and the global economy.

In 2010, the 10 largest U.S. ports by volume accounted for 58 percent of oceangoing vessel calls. Houston was largest for tanker calls; Los Angeles/Long Beach was the largest for container ship calls, and New Orleans was the largest for dry bulk calls.  The other 42 percent of cargo was spread among the 173 other commercial deep draft ports along the Atlantic, Gulf of Mexico, Pacific, and Great Lakes coasts, as well as ports in Alaska, Guam, Hawaii, Puerto Rico, Saipan, and the U.S. Virgin Islands. 

Current MARAD programs, including the Maritime Security Program and the cargo preference programs, play a part in sustaining approximately 90 U.S.-flag ships in international commerce.  In addition to commercial cargos that support our economy, in 2009 these vessels recently carried over 3 million metric tons of petroleum and over 8 million tons of general and containerized cargo for the Department of Defense (DOD); shipped household goods for approximately 78,000 military overseas moves; and transported over 770,000 measurement tons of privately-owned vehicles for the military.  Additionally, U.S.-flag vessels carried about 2 million metric tons of humanitarian food aid worldwide annually in recent years.  Each vessel in the international trades supports upwards of 20 seafarer billets (equal to more than 40 full time equivalent officers and crew per vessel) or 3,000 – 3,700 seafarer jobs overall.  

MARAD is committed to improving the international competitiveness of the U.S.-flag fleet.  To that end, MARAD is conducting a study to obtain and analyze the broad range of impediments to the use of the U.S.-flag registry.  The study will help MARAD ensure that U.S. maritime policies are based, to the maximum extent possible, on the current state of international waterborne transportation markets.  MARAD is currently reviewing the Final Report and expects the study to be completed in the summer of 2011.

Meanwhile, MARAD is working with other Federal agencies to increase the competitiveness of U.S.-flag vessels, for example:

MARAD is updating its cargo preference regulations in consultation with the shipper agencies.  Two weeks ago, MARAD brought together all of the U.S. government agencies involved in cargo preference for the first ever Federal shipper forum on cargo preference.  It gave Federal agencies a chance to discuss the implementation of cargo preference programs.  This feedback will help MARAD make improvements to the program.

As you can see, much is being done within the Administration to ensure that the essential supply chain requirements are available to enhance the Marine Transportation System, create jobs, and support the National Export Initiative.  At this time, I will be pleased to answer any questions the Subcommittee may have.  Thank you.

##

STATEMENT OF

THE HONORABLE RAY LAHOOD
SECRETARY OF TRANSPORTATION

BEFORE THE

COMMITTEE ON THE BUDGET
UNITED STATES SENATE

March 3, 2011

Introduction

Chairman Conrad, Ranking Member Sessions, and Members of the Committee, thank you for the opportunity to appear before you today to discuss the Administration’s fiscal year (FY) 2012 budget request for the U.S. Department of Transportation.   The President is requesting $129 billion for Transportation in FY 2012.   This includes the first-year of a bold new six-year $556 billion reauthorization proposal that will transform the way we manage surface transportation for the future. 

America is at a transportation crossroads.  To compete for the jobs and industries of the future, we must out-innovate and out-build the rest of the world.  That is why President Obama called on the nation to repair our existing roadways, bridges, railways, and runways and to build new transportation systems – including a national high-speed intercity rail network – which will safely and efficiently move people and goods.  The Administration’s Surface Transportation Reauthorization proposal is designed to accomplish precisely this, and is the centerpiece of the President’s FY 2012 budget.

It proposes four broad goals: (I) building for the future, (II) spurring innovation, (III) ensuring safety, and (IV) reforming government and exercising responsibility.

The FY 2012 proposal includes a $50 billion “Up-Front” economic boost that is designed to jump-start job creation while laying the foundation for future prosperity.  This initial funding would finance improvements to the nation’s highway, rail, transit, and aviation systems.

I. Building for the Future

America’s aging roads, bridges, and transit systems must be addressed.  For too long we have put off the improvements needed to keep pace with today’s transportation needs.  By 2050, the United States will be home to 100 million additional people – the equivalent of another California, Texas, New York, and Florida.  More than 80% of them will live in urban areas. Concerns about the need for livable communities will increase as communities tackle the need for transportation choices and access to transportation services.  If we settle for the status quo, our next generation of entrepreneurs will find America’s arteries of commerce impassably clogged and our families and neighbors will fight paralyzing congestion.  So the Administration’s proposal addresses this challenge in three ways:

1. Creating a National High-Speed Rail Network:  First, the proposal provides $53 billion over six years to continue construction of a national high-speed rail network.  It will place high-speed rail on equal footing with other surface transportation programs; include funding for both Amtrak and new “core express,” “regional,” and “emerging” corridors; and keep the country on track toward achieving a goal of providing 80 percent of Americans with access to an intercity passenger rail network, featuring high-speed rail within 25 years.
2. Rebuilding America’s Roads and Bridges:  Second, the Administration’s proposal will provide a 48 percent funding increase – to $336 billion over six years for road and bridge improvements and construction.  A key element expands the current National Highway System to include an additional 220,000 miles of critical arterials.   It will also simplify the highway program structure, accelerate project delivery to realize the benefits of highway and bridge investments for the public sooner, and underscore the importance of maintaining existing highway infrastructure in good condition.  These investments and reforms will modernize our highway system while creating much-needed jobs.
3. Investing in Accessible, Affordable Transit Options:  Third, the proposal will provide a 128 percent increase in funding – to $119 billion over six years – for affordable, efficient, and sustainable transit options.  It will prioritize projects that rebuild and rehabilitate existing transit systems, including an important new transit safety program, and allow transit authorities (in urbanized areas of 200,000 or more in population) to temporarily use formula funds to cover operating costs. 

II. Spurring Innovation

The Administration’s Surface Transportation Authorization proposal acknowledges the important role that innovation and modern business tools play in putting our transportation dollars to work wisely.   We can no longer afford to continue operating our systems the same way we did 50 years ago, with outdated processes and financial tools that were made for yesterday’s economy.  Our proposal and the President’s FY 2012 request responds to this challenge in several ways. 

It establishes an Infrastructure Bank to finance projects of national or regional significance.  By working with credit markets and private-sector investors, the Infrastructure Bank will leverage limited resources to achieve maximum return on Federal transportation dollars.  The bank will initially receive $30 billion over six years, will reside within the U.S. Department of Transportation, and will be managed by an executive director with a board of officials drawn from other Federal agencies. 

Recognizing that competition often drives innovation, the Administration’s proposal and the President’s FY 2012 budget also includes a $32 billion competitive grant program called the Transportation Leadership Awards.  This program’s goal is to reward States and local governments that demonstrate transformational policy solutions.   Examples include the use of innovative multimodal planning and funding methods, pricing and revenue options, land use guidelines, environmental stewardship measures, economic development strategies, innovation of project delivery, and deployment of technology – just to name a few possibilities.

These new and innovative tools will help us to better meet the transportation needs of America’s small towns and rural communities.  Increased highway funding will expand access to jobs, education, and health care.  Innovative policy solutions will ensure that people can more easily connect with regional and local transit options – and from one mode of transportation to another. 

At the same time, our proposal will bolster State and metropolitan planning; award funds to high performing communities; and empower the most capable communities and planning organizations to determine which projects deserve funding.

Innovation must span beyond surface transportation.  This is why the President’s budget request also includes $3.4 billion for aviation in the $50 billion up-front investment.  The budget requests $3.1 billion for airport improvements for runway construction and other airport projects such as Runway Safety Area improvement projects as well as noise mitigation projects.  Modernizing our air traffic control systems is critical if we are to meet the needs of the future.  The President’s FY 2012 budget addresses this by providing $1.24 billion for the Federal Aviation Administration’s (FAA) efforts to transition to the Next Generation (NextGen) of Air Traffic Control.  This funding will help the FAA move from a ground-based radar surveillance system to a more accurate satellite-based surveillance system – the backbone of a broader effort to reduce delays for passengers and increase fuel efficiency for carriers.

III. Ensuring Safety

Keeping travelers on our transportation systems safe is my top priority.  That is why preventing roadway crashes continues to be a major focus at DOT. The Administration’s Surface Transportation Reauthorization proposal will provide $330 million for the ongoing campaign against America’s distracted driving epidemic.  It will also commit $7 billion to promote seatbelt use, get drunk drivers off the road, and ensure that traffic fatality numbers continue falling from current historic lows.   In addition, it almost doubles the investment in highway safety, providing $17.5 billion to Federal Highway Administration (FHWA) safety programs.  The Department is also taking a fresh approach to interstate bus and truck safety.  Compliance, Safety, Accountability (CSA) is a new initiative that will improve safety and use resources more efficiently.    The Administration’s Surface Transportation Reauthorization Proposal will dedicate $4.9 billion to the Federal Motor Carrier Safety Administration (FMCSA), and give the Department of Transportation new authority to set tougher safety performance goals for states.

Transit safety is another important priority.  Our proposal will, for the first time, entrust the Federal Transit Administration with the authority to oversee rail transit safety across America.  In light of recent transit-related accidents, I believe this is critical to ensuring the oversight and accountability our transit riders deserve.

Our safety focus must also include the transportation of hazardous materials and our network of pipelines.  The Administration’s Surface Transportation Reauthorization Proposal will fund the safety programs of the Pipelines and Hazardous Materials Safety Administration (PHMSA) and will enhance its authorities to close regulatory loopholes and improve its safety oversight.  The President’s FY 2012 budget requests $221 million for PHMSA to help ensure that families, communities, and the environment are unharmed by the transport of chemicals and fuels on which our economy relies.

IV. Reforming Government and Exercising Responsibility

As we move forward together to plan for America’s transportation needs, we must also keep in mind the responsibility we all share for using taxpayer dollars wisely.  The Administration’s Surface Transportation Reauthorization Proposal will cut waste, inefficiency, and bureaucracy so that projects can move forward quickly, while still protecting public safety and the environment.

Our proposal consolidates and streamlines our current Highway and Transit Programs in a major way.  The current system of over 55 separate highway programs will be folded into five new categories.  Similarly, six transit programs are merged into one “state of good repair” program and one “specialized transportation” program.  As a result of these changes, we expect to shorten project delivery and accelerate the deployment of new technologies.  

The Administration’s Surface Transportation Reauthorization proposal also includes important reforms that change the way we manage our transportation spending. Consistent with the recommendations of the Fiscal Commission, for the first time, the Budget proposes to subject surface transportation spending to “paygo” provisions to make certain that spending does not exceed dedicated revenue.  This approach is designed to ensure that our surface transportation program is paid for fully without increasing the deficit.  The proposal will also expand the current Highway Trust Fund into a new Transportation Trust Fund with four accounts – one for highways, one for transit, one for high-speed passenger rail, and one for the National Infrastructure Bank. 

Other Highlights

The President’s FY 2012 request includes some other key transportation priorities as well.  These include the $18.7 billion in total funds requested for the FAA.  FAA would receive $9.8 billion to fund the operation, maintenance, communications and logistical support of the air traffic control and air navigation systems.  An additional $3.1 billion would support FAA’s Facilities and Equipment program to fund FAA’s capital projects.  A total of $5.1 billion in FY 2012 would fund the Airport Improvement Program when funding from the $50 billion up-front investment is included.  

The President’s request also includes $93 million for the U.S. Merchant Marine Academy (USMMA).  $29 million of these funds will be used to support the next phase of the USMMA’s Capital Asset Management program and for renovations to selected barracks and the mess hall.  These improvements will help ensure that our cadets have the facilities they need to support their education.   

Conclusion

Thank you for the opportunity to appear before you to present the President’s FY 2012 budget proposal for the Department of Transportation and our Surface Transportation Reauthorization proposal that will help transform transportation programs over the next six-years in ways that will benefit all Americans for years to come.  I look forward to working with the Congress to ensure the success of this request.  

I will be happy to respond to your questions.

# # #

STATEMENT OF

The Honorable Susan Kurland
Assistant Secretary for
Aviation and International Affairs
U.S. Department of Transportation

BEFORE THE

Subcommittee on Aviation
Committee on Transportation and Infrastructure
U.S. House of Representatives

HEARING ON

The European Union Emissions Trading Scheme:
A Violation of International Law

July 27, 2011

Good morning Chairman Mica, Chairman Petri, Ranking Member Rahall, Ranking Member Costello, and Members of the Subcommittee.  Thank you for inviting me to testify today. 

The European Union (EU) Emissions Trading Scheme, or ETS, is a very important issue for the U.S. Government and the U.S. aviation industry. This Committee’s leadership has been instrumental in raising awareness about the legal and design issues of the EU ETS as the EU proposes to apply it to international aviation.  As your efforts show, opposition to the unilateral imposition of ETS on foreign operators, including U.S. operators, is not limited to one branch of government or one political party.  Opposition is shared throughout our government and across the political spectrum.

In January next year, U.S. aircraft operators will begin to incur liability for greenhouse gas emissions under the EU ETS.  We strongly object, on both legal and policy grounds, to the proposed unilateral imposition of ETS on foreign operators. 

This is the wrong way to pursue the right objective.  The Administration strongly supports the goal of combating climate change through reductions in greenhouse gas emissions, including from the aviation sector.  The U.S. aviation industry has made substantial progress over the last ten years in improving fuel economy and reducing emissions.  However, we believe that the right way forward is a global solution built on strong domestic action, rather than a system imposed on us from outside.

To this end, the Department of Transportation is actively working domestically and with our international partners to reduce greenhouse gas emissions caused by aviation.  We believe that the International Civil Aviation Organization (ICAO) should provide the framework to address international greenhouse gas emissions.   Efforts to reduce greenhouse gases must be accomplished by constructive international negotiation and mutual agreement, not by the unilateral decision of one government.

To address our international commitments at ICAO with respect to aviation and climate change, the Department is undertaking a set of initiatives under the U.S. Next Generation Air Transportation System (NextGen) Plan, as well as working at ICAO to develop a meaningful carbon dioxide (CO₂₎ standard.  We have set aspirational goals in our NextGen plan to improve aviation fuel burn and emissions performance by 2% a year and achieve carbon neutral aviation growth by 2020 from a 2005 baseline.  To achieve this, we are working in partnership with industry to implement more efficient air traffic management, accelerate development of cleaner aircraft technology, and develop and deploy sustainable alternative fuels.  

The good news is that we are building on a strong record of U.S. aviation fuel efficiency improvements and greenhouse gas emissions savings. Commercial aircraft operations in the United States have shown significant improvement in fuel efficiency and emissions. U.S. aviation emissions have barely grown since 1990 (up 5%), and U.S aviation emissions have actually declined since 2000 (down 15% through 2009 while U.S. carriers have transported approximately 15% more passengers and cargo).  

We believe that the EU’s plan to include aviation in the EU ETS is undermining efforts to build an international consensus on how to best reduce aviation’s greenhouse gas emissions.  We saw that last fall at the ICAO Assembly and we see it from the reports of opposition to application of this EU legislation by countries from around the world. 

Moreover, we have several major concerns with the EU ETS as applied to international aviation.  

First, inclusion in the ETS of foreign operators is inconsistent with international aviation law and practice.  As a legal matter, we consider the EU ETS Directive to be inconsistent with both the Chicago Convention and the U.S.-EU Air Transport Agreement.

Second, the EU has no transparent methodology or standards for its application of a provision that allows carriers from countries undertaking “equivalent measures” for reducing emissions to be exempted from the EU ETS.  We believe this could foster discrimination and competitive distortions in the industry. 

 Third contrary to EU assertions, work by ICAO has recognized a range of approaches for reducing greenhouse gas emissions and not exclusively endorsed any one measure.

Fourth, any money U.S. airlines pay to European treasuries is money that is not available to invest in new aircraft and equipage required under our NextGen plan.   Moreover, despite public statements pledging ETS revenues as a source of climate mitigation funding, the EU ETS Directive imposes no requirement that revenues generated from the auction of ETS allowances be used to address climate change, nor are we aware of any commitments by any EU member state to dedicate ETS revenue for climate change purposes. 

Finally, the EU ETS does not preclude EU member states from levying additional emissions-related charges or taxes, or maintaining existing levies. There are already countries, such as Austria, Germany and the U.K., that have done so.  Accordingly, a U.S. air carrier forced to participate in the EU ETS, could end up paying multiple times for the same ton of CO₂ emissions.

We discussed our concerns with our European counterparts at the Joint Committee of the U.S.-EU Air Transport Agreement last month in Oslo.  During that meeting, we conveyed our serious policy and legal objections to the EU’s planned inclusion of foreign operators in their ETS.  European Commission representatives insisted that the ETS Directive will not be amended or delayed, and that the only way for U.S. carriers to be even partially exempted would be for the U.S. to demonstrate equivalent measures.  The ambiguous responses of the EU to U.S. questions about potential discrimination and criteria for equivalence in possible EU exemptions for third countries only heightened our concerns.

We strongly believe that a collaborative international approach is the best way to reduce global greenhouse gas emissions and will continue to work actively for a global solution.

Thank you again for bringing attention to this important issue.  I look forward to your questions.

STATEMENT OF

ROY KIENITZ
UNDER SECRETARY OF TRANSPORTATION FOR POLICY

BEFORE THE

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
U.S. HOUSE OF REPRESENTATIVES

MAY 4, 2011

STIMULUS STATUS:  TWO YEARS AND COUNTING

Chairman Mica, Ranking Member Rahall, and members of the Committee, thank you for inviting me to appear before you today to discuss the Department of Transportation’s implementation of the American Recovery and Reinvestment Act. 

The President signed the Recovery Act on February 17, 2009.  The Recovery Act appropriated $48.1 billion to the Department of Transportation.  Most of this funding was appropriated for existing programs, such as the various highway programs administered by the Federal Highway Administration (FHWA), the Transit Capital Assistance Grants and Fixed Guideway Infrastructure Grants administered by the Federal Transit Administration (FTA), and the Federal Aviation Administration’s Facilities and Equipment and Airport Improvement Programs.  These programs have been very successful, funding more than 15,000 projects in all 50 states.  As of April 29^th, we’ve obligated over 99 percent of the funding for these projects, and over half of the projects have been completed.  As of the end of January, these projects had provided 82,000 direct job-years of work for American workers, and over 280,000 job-years of work in the overall economy, taking into account indirect jobs in supplier industries and additional jobs generated as these employees spend their increased incomes. 

These projects have had a significant, positive effect on the American transportation system.  Almost 9,000 projects have been completed.  Among the projects that we have funded is a fourth bore for the Caldecott Tunnel near Oakland, California, where hundreds of workers are expanding Highway 24 from six lanes to eight to alleviate congestion for 160,000 daily commuters from the Contra Costa suburbs to Oakland.  We’re expanding Interstate 94 in Wisconsin from six lanes to eight from Milwaukee down to the Illinois state line.  In Tampa we’re linking Interstate 4 with the Lee Roy Selmon Crosstown Expressway to provide trucks with direct access to the Port of Tampa without going through downtown – just the kind of “last-mile” investment in intermodal transportation that transportation experts have repeatedly told us we need.  We’ve added over 8,000 buses to the Nation’s transit fleet, enough to reach from here to Baltimore.  We’re restoring the 136-year-old Eads Bridge across the Mississippi in St. Louis to a State of Good Repair, along with 80-year-old subway stations in Philadelphia, and even the historic Brooklyn Bridge in New York City.  Recovery Act funding has made it possible to expand transportation capacity around the Nation to serve the traveling public, and to finally get thousands of maintenance, repair, and rehabilitation projects done – many of which were long overdue but had been delayed pending the availability of funds.

In addition to these existing programs, Congress enacted a new competitive surface transportation grant program and added a considerable amount of funding to previously authorized high-speed rail programs.  We are proud of the work that we have done in implementing these competitive grant programs and awarding grants within a year of the legislation being enacted.  We are also pleased that we were able to use these programs to introduce the kind of competitive, merit-based, data-driven approach to project selection that the President has long advocated.  And we are pleased that the U. S. Government Accountability Office (GAO), in reviewing these programs, generally found that we did a good job in carrying out the Congressional mandate.[1]

The TIGER Grant Program

Congress provided $1.5 billion for a new program of competitive surface transportation grants that we have called the “TIGER Grant” program – Transportation Investment Generating Economic Recovery.  Everyone on this Committee knows that our transportation program is too stove-piped, with dozens of programs allocating money to narrowly defined categories of projects.  The TIGER Grant program allowed us to break down these stovepipes, and allocate funds to the projects that our economy most needed, regardless of what mode of transportation they were in, and allowed us to fund projects that crossed the boundary between one mode of transportation and another.  Moreover, this new program allowed us to demonstrate the use of best practices in evaluating and selecting projects – using competition to generate the best ideas that states and localities had to offer, and using benefit-cost analysis to evaluate which projects had the best prospects for success.  While the TIGER Grant Program was in many ways a learning experience for our state and local partners and for us, we believe that the program is producing good value for the American people that will serve us well for generations to come.

We had several goals for the program.  First, we wanted it to encourage economic recovery by getting projects started promptly.  Second, we wanted to make a significant contribution to meeting the national transportation system’s long-term reinvestment needs by selecting projects that reflected our strategic goals.  Third, we wanted our approach to the evaluation of project applications to be as rigorous and systematic as possible, within the limited time available, to ensure that we were selecting the best possible projects.  And fourth, we wanted the selection process to reflect the President’s strong commitment to transparency. 

The Notice of Funding Availability (NOFA) that we published on June 17, 2009, reflected these goals.  It made clear that we would give preference to projects that could create employment promptly and that would create employment in areas where unemployment was high, and that we would give preference to projects that advanced our strategic goals.  It also made clear that applicants would be expected to demonstrate how well their projects would advance those strategic goals by providing a benefit-cost analysis that supported their assertions.  It also made clear that, in the interest of transparency, we would document our decisionmaking process and make those documents available to GAO and the Department’s Inspector General.

Before the applications came in, we organized Evaluation Teams to review the applications when they arrived.  When the applications were submitted in September 2009 (over 1450 applications, requesting almost $60 billion in funding), our 10 evaluations teams were in place and ready to begin reviewing applications.  The Evaluation teams documented their ratings of the projects on standard Evaluation Sheets, shown in Appendix III of GAO’s report.  The Evaluation Sheet asks for a rating on each of the criteria laid out in the NOFA and a narrative discussion to justify the rating.  We created a separate Control and Calibration Team to analyze the ratings of the 10 different teams to ensure that they were rating projects in a consistent way.  The Evaluation Teams rated 115 applications as “Highly Recommended” and advanced them for further review. 

We also created an Environmental Analysis Team to ensure that the projects were able to meet federal environmental requirements, and an Economic Analysis Team to determine whether each project’s benefit-cost analysis demonstrated that it was reasonably likely to have benefits in excess of its costs.  These teams reviewed the projects advanced by the Evaluations Teams and documented their ratings in written evaluations of each project.  They then provided the results of their reviews to the Review Team, which would make the final recommendations to the Secretary.

The Review Team, comprising the Administrators of the Department’s surface transportation modes with infrastructure responsibilities along with the Department’s Assistant Secretaries, Deputy Secretary, and myself, met twice a week for several weeks to review these applications.  We had presentations from the Evaluation Teams, Economic Analysis Team, and Environmental Analysis Team, and discussed these projects in some detail.  Projects were given a preliminary rating by the Review Team, and then the Review Team returned to these ratings in subsequent meetings.  In some cases we raised questions about a project and asked the staff to follow up with the project sponsor to get further information.  Finally, after a lengthy process, we made our recommendations to the Secretary, who made the final decision about which projects should receive awards.

The statute required us to take measures so as to ensure an equitable geographic distribution of funds and an appropriate balance in addressing the needs of urban and rural communities.  In some cases, this led us to consider and make awards to the best projects that would meet such statutory geographic distribution requirements.  We ultimately selected 51 projects for awards.

These projects will have important impacts on the transportation system.  The Otay Mesa project in Southern California, for example, will build a critical interchange between I-805 and State Route 905, allowing trucks bound for the border crossing with Mexico to use a six-lane highway rather than a local road.  Otay Mesa is one of our biggest export points to Mexico, handling $10.3 billion in exports in 2010.  Construction has begun in West Virginia on the Appalachian Regional Short-Line Railroad project, which will rehabilitate hundreds of miles of short-line railroad line in West Virginia, Kentucky, and Tennessee.  This is a public-private partnership that will improve rail service and divert bulk shipments of aluminum, sand, and chemicals off of local highways and onto rail, enhancing safety and improving energy efficiency.  The Kansas City Transit Corridors and Green Impact Zone project will rehabilitate and upgrade transit infrastructure in the city’s 150-block Green Impact Zone and along regional transit lines.  The Green Impact Zone is creating a national model that demonstrates how integrated, place-based investments can transform a community.  The Milton-Madison Bridge between Kentucky and Indiana will not only replace an 80-year-old bridge in poor repair, but it will pioneer design-build techniques that will reduce the length of the expected bridge closure from one year to just 10 days.

The President has proposed building upon the concepts embodied in the TIGER Grant Program by creating a National Infrastructure Bank, with funding of $5 billion per year.  Like the TIGER Grant Program, the National Infrastructure Bank would break down the modal silos so that DOT can fund more innovative projects to achieve our national transportation goals.  Like the TIGER Grant Program, the National Infrastructure Bank would allow us to fund intermodal connections that would streamline our transportation system and make each part of it work more effectively.  Like the TIGER Grant Program, the National Infrastructure Bank would use economic analysis to evaluate the benefits and costs of alternative projects, allowing us to direct our funding toward the projects that promise the greatest return to the American people.  Unlike the TIGER Grant Program, the National Infrastructure Bank would provide a more flexible range of funding options, including grants, loans, and loan guarantees, to allow us to leverage our limited supply of federal funding and to bring private sector partners in to participate in infrastructure financing, design, and operation.  We recognize that the vast majority of our federal transportation funding will continue to flow to the States through the kinds of formula programs that we have used in the past.  But we also believe that some funding should be available in competitive programs like TIGER and the National Infrastructure Bank so that states that have innovative projects – that go beyond the scope of their formula allocation, that make notable contributions to achieving our transportation goals, and that provide demonstrable economic benefits to Americans not just in one state but across the country – can receive the funding and financing that they could not get from formula programs alone.

The High-Speed Rail Grant Program

Congress also decided to allocate a significant level of funding to carry out the high-speed rail program that had been enacted with President Bush’s signature in 2008 as the Passenger Rail Investment and Improvement Act (PRIIA).  While this program had already been authorized, the increased funding required us to expand our effort to evaluate competing projects and administer grant awards.

As with the TIGER Grant Program, DOT issued a Notice of Funding Availability to notify potential applicants of the criteria under which grant applications would be evaluated.  We established Technical Review Panels to review the applications and rate them in terms of how effectively they met the initial evaluation criteria in the NOFA.  The Technical Review Panels used guidebooks to assess the applications against six technical review criteria – transportation benefits, economic recovery benefits, other public benefits (such as environmental and energy-saving benefits), the project management approach, the sustainability of benefits, and the likely timeliness of project completion.  We required applicants to provide information on benefits and construction and operational costs of their proposed projects to support consideration of the benefits that the project would provide.  The High-Speed Rail Program was complicated by the fact that we had several different program authorizations, not only in PRIIA but in past appropriations acts.  So we established four “tracks” within which applicants could apply, with different program eligibilities and criteria for each track.  The ratings of the Evaluation Teams were documented with narratives explaining why each rating was given.  As with the TIGER Grant Program, a Review Team reviewed the ratings prepared by the Evaluation Teams and made recommendations to the Secretary.  Part of the role of this Review Team was to apply the selection criteria outlined in the NOFA, such as regional balance, balance between large and small population centers, and the need for assistance to economically distressed areas.

The High-Speed Rail Program has also had some notable successes.  Recognizing the work required to establish a comprehensive new infrastructure program, Congress gave the Department until September 30, 2012, to obligate the $8 billion appropriated for high-speed and intercity passenger rail.  The Department is on track to meet this deadline, having already obligated 70 percent of the funding through 31 awards to 17 states.  Last September construction began on the Chicago-St. Louis corridor, where we will be increasing train speeds from 79 to 110 mph.  Illinois completed 76.5 miles of track work last fall, and expects to complete another 96 miles this summer.  The state will also be buying new locomotives and passenger cars for the route, and will improve stations, install improved signaling systems for safe operations, and make grade crossing improvements.  In North Carolina, the first new locomotive funded by their Recovery Act grant was delivered last June, allowing operation of an additional daily train between Charlotte and Raleigh.  Construction is now underway on improvements to three stations and a railyard.  In March our grantee, the North Carolina Department of Transportation, reached agreement with project stakeholders, which has allowed us to disburse the final $462 million to fund additional construction over the next three years.  Maine began construction last August on new trackwork and station platforms to allow the Northern New England Passenger Rail Authority to extend the “Downeaster” passenger rail from Portland to Freeport and Brunswick.  Construction has continued this Spring, and will be completed by Fall 2012.  Finally, California is partnering with us to build the first over-200-mph high-speed rail system in the United States, and has matched our funding commitment by drawing from $9 billion in bonds authorized for the program in a vote by the citizens of the State. 

The President believes that we should continue our progress in constructing a new surface transportation system for the 21^st Century.  As he said in his State of the Union Address, “Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail.”  He has therefore proposed spending $3.1 billion for High-Speed Rail Corridor Development in Fiscal Year 2012.  This will maintain our momentum toward expanding our high-speed passenger rail network, bring our existing rail network up to a state of good repair, and increase the overall capacity of our rail network, allowing freight trains to operate more freely as well.

GAO’s Reviews of the TIGER Grant and High-Speed Rail Programs

We welcome GAO’s reviews of our work.  While we always try to administer our programs consistent with the best management practices, we recognize that a second opinion is always valuable in identifying ways in which we can do our work better.  GAO plays that role of providing a second opinion.

GAO has recently issued two reports on our Recovery Act work, one on the TIGER Grant Program and one on the High-Speed Rail Program.  In its report on the TIGER Grant Program, GAO found that USDOT had “developed comprehensive merit-based selection criteria and a competitive selection process to evaluate TIGER applications and meet statutory criteria.”  GAO found that DOT had “followed key federal guidance and standards for developing section criteria.”  GAO noted that, unlike the TIGER Grant Program, “many federal surface transportation programs do not effectively address key challenges because federal goals and roles are unclear, programs lack links to performance, and some programs do not use the best tools and approaches to ensure effective investment decisions.”  As a result “we have recommended that a criteria-based selection approach—like that developed in TIGER—be used to direct a portion of federal funds in programs designed to select transportation projects with national and regional significance.” 

GAO also found that DOT “maintained good documentation of the criteria-based evaluation conducted by its Evaluation Teams in the technical review and effectively communicated information about its criteria to applicants—an important step in promoting competition and fairness.  By thoroughly documenting how its technical teams considered and applied the criteria, clearly communicating selection criteria to applicants, and publicly disclosing some information on the attributes of the projects that were selected, DOT took important steps to build the framework for future competitive programs.”

GAO also raised concerns that we had not documented the discussions by the Review Team that led to the recommendations to the Secretary.  We did document our rationales for selecting projects in a memorandum from myself to the Secretary that recommended projects for selection, and then again in a memorandum from the Secretary back to my office that actually designated projects for selection.  These memoranda describe each project selected (including the activities to be funded), identify the specific benefits expected from each project, and explain how each project satisfies the funding priorities established in the announcement.  DOT also maintained summaries of the Review Team meetings, which we provided to GAO; GAO summarized excerpts of those documents in its report.  The summaries indicated, for example, that we raised concerns about whether projects had adequate financial commitments from other funding partners, whether the projects were as ready to go as the applicant claimed, and whether the project’s economic benefits were overstated.  These were indeed typical of the kinds of concerns we raised about projects in our discussions. 

Nevertheless, GAO was concerned that we had not documented the decision-making of the Review Team as thoroughly as we had documented the recommendations of our Evaluation Teams. We emphasize that we did document our rationale for selecting applications for award, but we also acknowledge GAO’s concerns. The Congress has recently appropriated an additional $527 million for the National Infrastructure Investments program, which is similar in design to the TIGER Grant Program. As we implement this program later this year, we plan to address the concerns raised by GAO.

GAO also reviewed the High-Speed Rail Program, particularly the process we used in evaluating and selecting projects for grant awards.  GAO identified “six recommended practices used across the federal government to ensure a fair and objective evaluation and selection of discretionary grant awards.”  Of those six practices, GAO found that DOT fully applied five of the six principles, and partially applied the sixth.  Overall, GAO concluded that “FRA substantially met recommended practices for awarding discretionary grants.”

GAO also asked applicants for high-speed rail funding how effectively FRA communicated with them.  GAO reported that “Applicants we spoke with praised FRA’s communication and stated that FRA officials did a good job providing information and answering questions during the period leading up to the pre-application and application deadlines.”

GAO also did a comparison between the high-speed rail program and 21 other competitive federal Recovery Act programs.  GAO found that “FRA publicly communicated at least as much outcome information as all but one Recovery Act competitive grant program we reviewed.”  Finally, GAO did a statistical analysis of the factors that appeared to have influenced project section.  According to GAO, the statistical analysis “supports statements from senior department and FRA officials indicating that the technical review scores were largely the basis for their selection deliberations.”

GAO concluded that “FRA established a fair and objective approach for distributing these funds and substantially followed recommended discretionary grant award practices used throughout the government.”

As with the TIGER Grant program, GAO raised concerns about the adequacy of our documentation of the reasons for selecting one project over another, contrasting this with the “robust documentation of the other steps used to determine eligibility and assess technical merit.”  FRA documented the rationales for selecting each application in a memorandum from the FRA Administrator to the Secretary recommending applications for selection, and then again in a memorandum from the Secretary to the FRA Administrator designating applications for selection.  These memoranda describe each project selected (including the activities to be funded), identify the specific benefits expected from each project, and explain how each project satisfies the funding priorities established in the document.  GAO argues that these memoranda did not make clear why the projects that were selected were better than the projects that were not selected.

We are currently in the process of reviewing a third round of applications for high-speed rail funding, and we have adopted a more thorough process of documenting our decisionmaking for project selection.  We are being careful to identify the specific benefits of each project and how those benefits match up with the selection criteria in our Notice of Funding Availability.  We take GAO’s concerns seriously, and we are always striving to improve on the processes we use to administer the programs that the Congress enacts.

We have tried to make our project selection process as transparent as possible.  To the extent that we have fallen short, we commit ourselves to making improvements.  But we believe that, on the whole, we have spent this funding wisely, on projects that will both aid the recovery process that we are still engaged in and provide lasting benefits to our Nation’s transportation system.  I welcome your questions.

STATEMENT OF

THE HONORABLE MICHAEL P. HUERTA,
DEPUTY ADMINISTRATOR,
FEDERAL AVIATION ADMINISTRATION

BEFORE THE

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,
SUBCOMMITTEE ON AVIATION,

ON

THE BENEFITS OF THE NEXT GENERATION AIR TRANSPORTATION SYSTEM,

OCTOBER 5, 2011.

Chairman Petri, Congressman Costello, Members of the Subcommittee:

Thank you for the opportunity to appear before you today to discuss the benefits of the Next Generation Air Transportation System, or NextGen.  This is my first appearance before this Committee since starting at the Federal Aviation Administration (FAA), and I am pleased to have the opportunity to get to know you all.

We recognize that we need to change the FAA internally to best serve the future needs of our nation’s air transportation system. This means realigning some functions in order to better handle the enormous transformation to NextGen.  Congress approved the reprogramming request we submitted this summer to change our reporting structure and implement other organizational changes. This is a critical step in moving forward with the changes that will lay the foundation for our success as an agency in the next 15 years.

The reprogramming approval allows us to create a NextGen office that will report to me. It also allows us to create an Assistant Administrator for NextGen. I’m very pleased that Vicki Cox is serving in this position. Together, we are setting the strategic direction for NextGen and continuing to raise NextGen’s profile within the FAA and within the aviation community. While much of NextGen involves the air traffic control function, it also involves much more than that and needs the involvement and focus of every FAA office going forward.

We have also established the NextGen Advisory Committee (NAC), a broad-based, senior-level advisory panel to which we turn for expertise and guidance. One of the first actions we requested of this new committee is to form a working group to develop recommendations on outcome-based performance metrics for NextGen.  We look forward to the NAC’s involvement in bringing all of the stakeholders together.

NextGen Defined

NextGen is a comprehensive overhaul of our National Airspace System (NAS) to make air travel more convenient and dependable, while ensuring your flight is as safe and efficient as possible. In a continuous roll-out of improvements and upgrades, the FAA is building the capability to guide and track air traffic more precisely and efficiently to save fuel and reduce noise and pollution. NextGen is a better way of doing business – for the FAA, the airlines, the airports, and the traveling public.  It’s better for our environment, better for efficiency and flexibility, better for safety, and better for the economy and the traveling public.

As recently as 2009, civil aviation contributed $1.3 trillion annually to the national economy, and constituted 5.2 percent of the gross domestic product according to FAA’s recent report on the economic impact of civil aviation. It generated more than 10 million jobs, with earnings of $397 billion.  NextGen is vital to protecting those contributions. The current system simply cannot accommodate anticipated growth in the aviation industry.  Congestion continues to increase at many of our nation’s busiest hub airports, a problem that will only be exacerbated now that traffic levels are starting to rebound from the impact of the economic recession.

Between 2007 and 2011, approximately $2.8 billion has been appropriated for NextGen.  We estimate the development of NextGen will require between $20 and $27 billion in FAA funding from 2012 to 2025.  And just last month, the President requested $1 billion in the American Jobs Act for Next Gen to support applied research, advance development, and implementation of engineering solutions for NextGen technologies, applications and procedures.   

What are we getting for our money?  Our latest estimates show that by 2018, we will recoup our investment and NextGen air traffic management improvements will reduce total delays, in flight and on the ground, about 35 percent, compared with what would happen if we did nothing. The delay reduction will provide $23 billion in cumulative benefits through 2018 to aircraft operators, the traveling public, and the FAA. We will save about 1.4 billion gallons of aviation fuel during this period, cutting carbon dioxide emissions by 14 million tons.

Let me highlight some examples of where NextGen is already improving safety and adding real dollars to the bottom line:

• Using Automatic Dependent Surveillance-Broadcast (ADS-B), a GPS-based technology, aircraft are able to fly more safely and efficiently in previously challenging areas.  ADS-B equipped helicopters flying over the Gulf of Mexico are benefiting from radar-like air traffic services for the first time.  ADS-B radio stations deployed along the shoreline and on oil platforms blanket the area with air traffic surveillance, increasing the safety of all operations.  This same surveillance improves efficiency in the Gulf through more direct routing of ADS-B equipped helicopters, reducing both their operating cost and environmental impact. In Colorado, new surveillance technologies are enabling controllers to track aircraft flying through challenging mountainous terrain.  Currently, over half of the ADS-B ground infrastructure has been deployed.
• Southwest Airlines started using GPS-based Required Navigation Performance (RNP) approaches at a dozen airports this year. The airline says that it could save $25 for each mile they save by using a shorter route.   
• Alaska Airlines has been a leader in using RNP approach procedures at Juneau International Airport. They can fly precisely through mountainous terrain in low visibility conditions thanks to the higher navigational accuracy of GPS. The airline estimates it would have cancelled 729 flights last year into Juneau alone due to bad weather if it were not for the GPS-based RNP approaches.
• In Atlanta, Delta Airlines reports saving 60 gallons of fuel per flight by using more efficient descent procedures we have designed under NextGen. Aircraft descend continually to the runway with engines idle, as opposed to descending in a stair-step fashion and using the engines and burning fuel to power up at each level-off point.
• UPS, with the help of the FAA, is equipping its fleet with NextGen technology to help save time and money as pilots transport goods in and out of their hub.  UPS estimates that it will save between 25% and 30% in fuel burn on arrival.
• We have conducted Initial Tailored Arrival (ITA) flight demonstrations, at San Francisco, Los Angeles, and Miami.  ITAs are pre-negotiated arrival path through airspace of multiple air traffic control facilities; they limit vectoring and minimize the time the aircraft spends maintaining level flight during its descent. ITAs differ from other types of Optimized Profile Descents (OPDs) in that they are assigned by controllers to specific approaches and tailored to the characteristics of a limited number of FANS-equipped aircraft types – 747s, 777s, A330s, A340s and A380s. We estimate that the 747s saved an average of 176 gallons of fuel per arrival in ITAs and 78 gallons per flight in partial ITAs, compared with conventional approaches. For 777s, the corresponding savings were 99 gallons in full ITAs and 43 gallons in partial ITAs.

We anticipate seeing other benefits shortly.  The “Greener Skies over Seattle” initiative should save literally millions of gallons of fuel annually, cut noise and decrease greenhouse gas emissions.  The FAA estimates that airlines using RNP procedures at Seattle Tacoma International Airport will save several millions of dollars per year at today’s fuel prices. And that number is only going to get larger as more airlines equip. With the “Greener Skies over Seattle” initiative, aircraft will emit less carbon dioxide – about 22,000 metric tons less per year. That’s like taking more than 4,000 cars off the streets of the Seattle region. 

These are just a few of the benefits that we are seeing already from our investments.  But, we cannot afford to be short-sighted.  A true transformation in the way we deliver air traffic services takes planning and time.  Let me now turn to a discussion of some of he longer-range benefits. 

NextGen Benefits:  Safety

NextGen operational capabilities will make the NAS safer. ADS-B improvements in situational awareness – on the ground and in aircraft – will increase controllers’ and pilots’ individual and combined ability to avoid potential danger.  Among other benefits, this could provide valuable time savings in search and rescue efforts.  Appropriately equipped aircraft will be able to receive information displayed directly to the flight deck information about nearby traffic, weather, and flight-restricted areas.

More precise tracking and information-sharing will improve the situational awareness of pilots, enabling them to plan and carry out safe operations in ways they cannot do today. Air traffic controllers will become more effective guardians of safety through automation and simplification of their most routine tasks, coupled with better awareness of conditions in the airspace they control.  Additionally, NextGen will facilitate the implementation of Safety Management System processes for the air traffic controllers' use.
Advances in tracking and managing operations on airport surfaces will make runway incursions less likely. Fusing surface radar coverage from Airport Surface Detection Equipment-Model X (ASDE-X) with ADS-B surveillance of aircraft and ground vehicles will increase situational awareness, particularly when linked with runway status lights. Collaborative decision making will increase everyone’s understanding of what others are doing.

Starting with pre-takeoff advisories, departure instructions and reroutes for pilots, we will use data messages increasingly instead of voice communications between pilots and controllers, reducing opportunities for error or misunderstanding. Voice channels will be preserved for the most critical information exchange.

NextGen Benefits:  Environmental

As with safety, our work to enhance aviation’s influence on the environment also benefits – and is a beneficiary of – NextGen. The operational improvements that reduce noise, carbon dioxide and other greenhouse-gas emissions from aircraft are the tip of the FAA’s environmental iceberg. Equally important are the other four-fifths of the agency’s environmental approach – aircraft and engine technology advances, sustainable fuels, policy initiatives and advances in science and modeling.

Environmental benefits of operational improvements are simple and direct. When we improve efficiency in the NAS, most of the time we save time and fuel. Burning less fuel produces less carbon dioxide and other harmful emissions. Some of our NextGen improvements, notably landing approaches in which aircraft spend less time maintaining level flight and thus can operate with engines at idle, reduce ground noise too. But operational benefits go only so far; their net system-wide effect can be offset by growth of the aviation system.

To accommodate system growth, we are supporting development of aircraft, engine and fuel technology. In 2009, we established the Continuous Lower Energy, Emissions and Noise program to bring promising new airframe and engine technologies to maturity, ready to be applied to commercial designs, within five to eight years. Similarly, we are part of a government-industry initiative, the Commercial Aviation Alternative Fuels Initiative, to develop sustainable low-emission alternative fuels and bring them to market.

We have developed and are using the NextGen Environmental Management System (EMS) to integrate environmental protection objectives into NextGen planning and operations. The EMS provides a structured approach for managing our responsibilities to improve environmental performance and stewardship. We also are analyzing the effect on aviation environmental policy and standards, and of market-based measures, including cap-and-trade proposals.

NextGen Benefits:  Airports

Many airports will benefit from substantial improvements in efficiency, access, surveillance, environment and safety. Surveillance, situational awareness and safety will improve at airports with air traffic control radar services as we deploy ADS-B ground stations across the NAS and update our automation systems, and as operators equip their aircraft for it. The FAA also plans to publish Wide Area Augmentation System Localizer Performance with Vertical Guidance approach procedures for all suitable runway ends by 2016.

We are making important progress on a number of efforts to show how better situational awareness and pacing on the ground will give operators and the traveling public more reliability and save them time, while also managing environmental impacts. We can cut fuel consumption and emissions by reducing the time and number of aircraft idling on taxiways waiting for takeoff, or for open gate slots upon arrival. Also, we can reduce equipment wear – stop-and-go accelerations are hard on engines and other parts, and they also emit significant additional amounts of carbon dioxide into the atmosphere.

A major success in 2010 was the minimal disruption that occurred during a four-month runway resurfacing and widening project in one of the nation’s busiest airspaces. The longest runway at New York John F. Kennedy International Airport (JFK) had to be expanded to accommodate new, larger aircraft. The project also included taxiway improvements and construction of holding pads. To minimize disruption during construction, JFK’s operators turned to a collaborative effort using departure queue metering, in which each departing aircraft from JFK’s many airlines was allocated a precise departure slot and waited for it at the gate rather than congesting taxiways. The procedure limited delays so well, it was extended after the runway work was completed.

NextGen Benefits:  Flight Operations

All aircraft operators in the NAS will benefit from two major categories of improvements – efficiency and capacity, and access. Much of the time, efficiency and capacity go together. When we reduce the distance needed for the safe separation of aircraft, reduce delays from weather and other disruptions, and increase flight-path and procedures options for controllers as they maintain the flow of traffic, we improve capacity as well. Surface initiatives make important contributions across the board – they improve situational awareness and safety, they reduce fuel consumption and carbon dioxide emissions and they reduce tarmac delays. By improving the efficiency of surface operations, they increase capacity.

Access issues center on runways at major airports, affecting mainly airlines, and airports and airspace that lack radar coverage, a problem for general aviation. NextGen will improve efficiency in operations that involve closely spaced parallel runways and converging and intersecting runways. Area Navigation and Required Navigation Performance (RNAV/RNP) will improve efficiency and capacity in departures and approaches. For general aviation, ADS-B will enable controllers to track properly equipped aircraft in non-radar areas covered by ADS-B ground stations. General aviation operators equipped for ADS-B In will receive traffic and weather information directly in the flight deck, providing them with greater situational awareness. Wide Area Augmentation System Localizer Performance with Vertical Guidance approach procedures will give properly equipped aircraft Instrument Landing System (ILS)-like capability at non-ILS airports. Through our new NAV-Lean process, we are streamlining the development and implementation for new procedures to ensure that users can take advantage of new navigational procedures and their benefits as quickly as possible. We hope to accelerate design and implementation of RNAV/RNP procedures and optimized descents to achieve their benefits sooner rather than later.

Optimization of Airspace and Procedures in the Metroplex (OAPM) is a systematic, integrated and expedited approach to implementing Performance Based Navigation (PBN) procedures and associated airspace changes, which was developed in direct response to RTCA Task Force 5 recommendations on the quality, timeliness, and scope of metroplex solutions.  OAPM focuses on a geographic area, rather than a single airport.  It considers multiple airports and the airspace surrounding a metropolitan area, including all types of operations (air carrier, general aviation, military, etc.), as well as connectivity with other metroplexes. 

The OAPM process uses two types of collaborative teams including FAA and industry partners.  Study Teams recommend conceptual airspace and procedure solutions, and then Design and Implementation (D&I) Teams design, refine, review, and implement those recommendations within a near-term three-year timeframe.  To date, 21 Metroplex sites have been identified and prioritized with input from FAA and industry.  Five sites have completed Study Team activities and potential benefits ranging from $6M to $26M per year have been identified at each site.  The Washington, DC and North Texas sites have initiated D&I activities, and D&I activities have been approved for two additional sites (Charlotte and Northern California).  Two additional Study Teams are currently active in Atlanta, and Southern California, and expect to release their findings and recommendations shortly.

NextGen Benefits:  Next Steps

In order to achieve these benefits, we know that we need to continue working with our partners in the aviation community.  Making sure that we are all on the same page about our expectations, our obligations, and our capabilities is essential to the successful planning, development, and execution of NextGen.

The FAA continues to expand its work on demonstrations, trials and initial deployment of NextGen systems and procedures. NAS operators and users – particularly participants in the demonstrations and trials – are benefiting from them. But there is a chicken-and-egg nature to the economic and policy decisions that will have the most influence over the extent and timing of future benefits.

On the one hand, achieving NextGen’s benefits depends heavily on aircraft operators and other stakeholders investing in the avionics, ground equipment, staffing, training and procedures they will need to take advantage of the infrastructure that the FAA puts in place to transform the aviation system in the coming decade and beyond. On the other hand, the willingness of operators and other stakeholders to make these investments depends critically on the business case for them – analyses of how valuable these benefits will be, and that they have confidence that the FAA can deliver the infrastructure in the time frames and manner required for those benefits to be realized.

When costs are clear but benefits are even a little bit cloudy, there is an information gap that the FAA must help fill. We try to do this in two ways. First, we conduct broad, system-level analyses, estimating how integrated NextGen benefits will develop and grow over a period of years. This work draws on modeling and simulations of how NAS operations will change and what effects the changes will have. The FAA must continue to work closely with the aviation community to ensure these benefits are well understood by those who need to invest in NextGen.

Second, we conduct a wide range of demonstrations and operational trials of specific NextGen systems and procedures. These demonstrations, conducted in real-world settings by operations and development personnel using prototype equipment, are invaluable.  They provide all of the stakeholders with the opportunity to see the very real benefits that NextGen can bring.  They mitigate program risks and show us whether we are on the right track in our technical approaches. They provide valuable insight into how equipment should be designed for operability, maintainability and a sound human-automation interface. And they are instrumental in advancing our understanding of the benefits to be gained from the capabilities being demonstrated.

Information from the demonstrations also helps us refine our models of NAS operations and how these operations will change, and thus our overall estimates of NextGen benefits. Further, it provides direct measurements of the ways specific NextGen capabilities can benefit NAS stakeholders and the public, enabling stakeholders to improve their own estimates of the benefits and costs of buying equipment for NextGen, and to be more confident of their analyses. 

In an interconnected world, one aviation system cannot succeed on its own.  Each system is a function of the next. All of the major systems need to work in harmony.  In March 2011, the FAA finalized an historic collaborative agreement with Europe to ensure that our future systems—NextGen and SESAR—are fully harmonized.  We have five working groups and more than two dozen specific harmonization programs to ensure that all the small pieces work together. This collaboration has begun in earnest and will continue until the job is done. 

We are closely aligning the work we do on NextGen and SESAR with International Civil Aviation Organization’s (ICAO) Block Upgrade Initiative. The goal is to identify suites of technology and procedural changes that can be packaged in such a way as to be accessible world wide for improvements in air traffic safety, efficiency and decreased environmental impact.    

The FAA is working towards greater harmonization of airspace through efforts like the Aviation Cooperation Program for the Mid-Americas and Caribbean.  Our hope is to use private and public resources to enhance aviation safety and efficiency across 21 countries. 

Latin America has invested in modern navigational equipment and it has improved safety and efficiency. Some of the items we are talking about include upgrading low level and en route radar and enhancing weather radar. We also need to incorporate new technology for airports, such as runway status lights.   We envision ADS-B from the Yucatan Peninsula to the northern region of South America.  We want to use a system of data communications to cut down on misunderstandings on the radio.

Finally, in Asia, harmonization is moving forward through efforts like ICAO’s recent Seamless Air Traffic Management Symposium in Bangkok. Participants brainstormed about ways to remove international barriers that exist today in order to make a truly seamless airspace across Asia and the Pacific.

As you can see, we are working steadily and carefully to bring NextGen to fruition.  We have mapped out our course and we are moving towards our goals, and we look forward to your continued guidance and oversight as we go forward. 

Mr. Chairman, this concludes my prepared remarks.  I would be happy to answer any questions you and the Members of the Subcommittee might have.

STATEMENT OF

MARGARET GILLIGAN,
ASSOCIATE ADMINISTRATOR FOR AVIATION SAFETY,
FEDERAL AVIATION ADMINISTRATION,

BEFORE THE

HOUSE COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE ON

THE INCLUSION OF BIOMETRIC IDENTIFIERS ON PILOTS LICENSES,

APRIL 14, 2011.

Chairman Mica, Congressman Rahall, Members of the Committee:

Thank you for the opportunity to appear before you today on the issue of embedding biometric data on pilot certificates.  I know that this issue has been of significant interest to Chairman Mica, as I have had several meetings with him on this topic.  The Federal Aviation Administration (FAA) has received statutory direction on pilot certificates in the past as their potential use by other agencies was identified.  I know that FAA has not acted on these directions as quickly or comprehensively as this Committee intended, but I would like to outline what FAA has done in this area and how we intend to move forward.

The FAA issues 23 different types of airman certificates.  In addition to pilot certificates, these include certificates for mechanics, dispatchers, parachute riggers, and air traffic controllers.  The original purpose of a pilot certificate, and the only purpose for many years, was to document that the holder met the aeronautical knowledge and experience standards established for both the certificate level and any associated ratings listed.  The certificates, used for decades, worked effectively for their intended purpose. 

In the late 1980s, agencies with mandates other than aviation safety began to see potential misuse of pilot certificates as law enforcement agencies engaged in activities related to the war against drugs.  In 1988, the Drug Enforcement Assistance Act required FAA to begin the process of phasing out paper certificates and replacing them with tamper resistant certificates, in an attempt to reduce pilot certificate fraud and enhance law enforcement.  At that time, this was an extremely significant undertaking, affecting tens of thousands of individuals.  Since October 2002, the FAA has required a pilot to carry a valid Government issued photo I.D. in addition to a pilot certificate while exercising the privileges associated with the certificate.  While, as of April 2010, all pilots have plastic certificates, the effort is ongoing with respect to other certificate holders.  We currently anticipate that all other certificate holders will have enhanced certificates by March 31, 2013. 

After the tragic events of September 11, 2001, with aviation playing such a central role in the disaster, additional uses for pilot certificates were identified.  As mentioned above, the requirement that pilots carry a government issued photo I.D. assumed that each FAA inspector who asked for pilot credentials could confirm the person about to fly was qualified and competent.  In addition, if a pilot leased an aircraft, the fixed base operator could confirm both the pilot’s identity and his other qualifications. 

The Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA) imposed additional requirements on the physical license, including that it be tamper resistant and include a photograph and/or biometric identifier of the pilot.  The certificates were also required to be capable of accommodating a biometric identifier, such as a digital photo or fingerprint, or any other unique identifier FAA deemed necessary 

FAA issued a Notice of Proposed Rulemaking (NPRM) in November 2010 that proposed to require that all pilots, including student pilots, possess the new certificates with a digital photo, widely acknowledged as a biometric identifier.  The comment period for this rulemaking closed in February of this year.  We are currently working to finalize this rulemaking within a year.  Due to the broad scope and economic impact of the rule, the FAA proposed to phase-in the requirement over a five-year period.  However, FAA expects that most airline pilots and flight instructors will have the new certificate within two years and that most other active pilots will have the new certificate within three years of the issuance of the final rule.  FAA recognizes this timeframe is not consistent with IRTPA direction, which called for FAA to begin issuing the modified certificates in 2005.  The FAA NPRM was crafted in a way to ensure compliance with IRPTA in the most cost effective an efficient manner, and we are in the process of carefully considering comments related to this NPRM to make sure that the goals of IRPTA are met in the final rule. 

With respect to biometric standards, the FAA understood that other government agencies, including the National Institute of Standards and Technology (NIST) developed those standards  The FAA has been, and continues to be hopeful not to duplicate, interfere, or supersede efforts either with respect to standards or implementation.  We all support the goal of enhancing aviation security and maximizing resources in order to achieve a single, universal security credential incorporating biometric data that meets a common standard.  To the extent that it is practical and/or feasible, we will continue to consider how this security credential could interface with existing safety credentials.  In addition, we continue to work with TSA on a proposal to establish a universal ID for the transportation workforce. 

Understanding how best to move forward to improve the use of biometric data to ensure the security of the pilot community and enhance aviation security overall will require coordination among government agencies in cooperation with airlines and industry trade associations.  There is an ongoing dialogue designed to minimize duplicative efforts and to take advantage of differing areas of expertise.  FAA recognizes the advantages of developing security enhancing uses for airmen biometrics and we pledge to make use of the technology as soon as it is reasonably feasible to do so.  We look forward to working with this Committee as our efforts progress.

This concludes my prepared remarks.  I will be happy to take questions at this time.

STATEMENT OF

THE HONORABLE ANNE S. FERRO,
ADMINISTRATOR
FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

SUBCOMMITTEE ON SURFACE TRANSPORTATION AND
MERCHANT MARINE INFRASTRUCTURE, SAFETY, AND SECURITY
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
U.S. SENATE

MAKING OUR ROADS SAFER:  REAUTHORIZATION OF THE MOTOR CARRIER SAFETY PROGRAM

JULY 21, 2011

Good afternoon Mr. Chairman, Ranking Member Wicker and Subcommittee Members.  Thank you for this opportunity to speak to you today about reauthorization of the motor carrier safety program.  I appreciate the Subcommittee’s steadfast dedication to making our Nation’s roads as safe as possible by ensuring that only the safest motor carriers and commercial motor vehicle (CMV) drivers operate over our roads, and providing enhanced enforcement tools to the Federal Motor Carrier Safety Administration (FMCSA) and its State partners.  

As Secretary Ray LaHood has said many times, “Safety is my number one priority.  Nothing else even comes close.”  FMCSA’s 2011-2014 Strategic Plan, for which we are now seeking public comment, is based on a strategic framework that is shaped by three core principles:  raise the bar to enter the motor carrier industry; maintain high safety standards to remain in the industry; and remove high-risk carriers, drivers, and service providers from operation.  In preparing technical assistance for legislative policy proposals for motor carrier safety, the Department paid close attention to suggested provisions that advance one or more of our three core principles.

With the help of SAFETEA-LU, we have achieved significant success in reducing crashes, injuries, and fatalities over the past six years, but no one can dispute that additional efforts are necessary to achieve our paramount goal of safety in motor carrier transportation.  The Agency must be strategic in its use of resources to target identified compliance weaknesses and correct them.  Through the technical assistance, we strove to close statutory gaps that place unsafe carriers, drivers and vehicles outside our grasp.  At the same time, our goal was to ensure a level playing field without over-regulating the industry.  We believe that these changes, taken together, and increasing Agency efficiency and effectiveness, will dramatically increase motor carrier safety without unduly burdening States or industry.  I would like next to discuss our key technical assistance for reauthorization policy proposals.

CSA Proposals

For nearly seven years, FMCSA has been working to develop a new enforcement business model, which we call Compliance, Safety, Accountability or CSA.  We have undertaken this with an unprecedented level of stakeholder input, analysis, and planning, including public meetings, webinars, over 350 live presentations, numerous meetings with Congressional staff and the National Transportation Safety Board (NTSB), and a 30-month/9-State Operational Model Test.  Through this process, FMCSA worked with our partners to develop a new and improved enforcement model.  CSA allows FMCSA to more effectively and efficiently target poor safety performers and take the necessary steps to either improve that performance or get the carrier off the road.

We have included in our technical assistance a number of statutory revisions and additional authorities needed to bring CSA to fruition.  For example, we are requesting flexibility to allow an investigator’s credentials to be displayed in writing rather than in person.  This will allow FMCSA and its investigators – with clear statutory authority to conduct enforcement interventions – to display credentials and formally demand that a motor carrier provide records, without traveling to the motor carrier’s business location.  This is vital to expanding FMCSA’s and our State partners’ enforcement repertoire to include off-site reviews and investigations.  

We also provided language to update the requirement, adopted in SAFETEA-LU, that the Agency perform compliance reviews on motor carriers rated as category A or B for 2 consecutive months under the Agency’s old SafeStat measurement system.  Under CSA, the Agency replaced SafeStat with a new, more accurate carrier safety metric and established our Safety Measurement System (SMS), which uses more data, and completes a more targeted assessment of the carrier.  The Agency is committed to continuing to prioritize the carriers with the highest safety risk.  However, we need to use the new, improved metrics rather than the category A or B system to identify problem carriers. 

As the centerpiece of CSA, the Agency is currently developing a proposed rule to revise its procedures for issuance of motor carrier safety fitness determinations.  We anticipate issuing that proposed rule by the end of 2011.  Longer term, FMCSA anticipates adopting comparable safety fitness determination procedures for individual drivers, and we have proposed a new statutory section to grant express authority for that rule.  This authority would strengthen FMCSA’s ability to identify high-risk commercial drivers and to remove them from service.

The final CSA policy proposal would help ensure that the roadside enforcement data, which takes on heightened importance under CSA, is based on nationally uniform criteria for selecting vehicles for roadside inspections.  Consistency in State-operated inspection selection systems is vital to preserving the integrity of the SMS.  The FMCSA’s language would, therefore, authorize FMCSA to withhold a portion of a State’s Motor Carrier Safety Assistance Program (MCSAP) grant funds if the State’s inspection selection system does not use a methodology FMCSA has approved.

Reincarnated/Affiliate Carrier Proposals

In recent years, FMCSA has witnessed a disturbing practice – carriers that commit safety violations and then slightly change their corporate identity or “reincarnate” to either continue operating after being placed out of service, avoid paying civil penalties, or to otherwise avoid the regulatory consequences of poor safety performance.  More recently, unsafe carriers, particularly motorcoach companies, have attempted to avoid FMCSA enforcement by creating closely affiliated entities under common operational control.  Our investigations have found that these companies quickly shift customers, vehicles, drivers, and other operational activities to an affiliated company when FMCSA places one of them out-of-service.  These practices of “reincarnating” as a supposedly new motor carrier or simultaneously operating affiliated companies to circumvent Agency enforcement actions result in the continued operation of high-risk carriers and create an unacceptable safety risk to the traveling public.

Our policy proposals would confront this problem from a number of angles.  First, the technical assistance would expressly authorize the Secretary to withhold, suspend, amend, or revoke a motor carrier’s registration if the carrier failed to disclose its adverse safety history or other material facts on its application, or if the Secretary found that the applicant was a successor or closely related to another company with a poor compliance history within the preceding 5 years.  Another proposed section would amend existing law to authorize the Secretary to withhold, suspend, amend, or revoke the registration of a motor carrier, employer, or owner or operator if the Secretary determined that:  (i) there was a common familial relationship to avoid compliance or to mask non-compliance; or (ii) the company engaged in a pattern or practice of avoiding compliance or masking non-compliance within the preceding 5 years.  Both of these proposals would require that, before taking action on such carriers’ registration, the Secretary provide the carrier due process in the form of notice and an opportunity for a proceeding. 

Second, the Secretary would also be authorized to take steps, after notice and an opportunity for a proceeding, against individual officers, directors, owners, chief financial officers, safety directors, or other persons who exercise controlling influence over the operations of a motor carrier, if those persons intentionally, knowingly, or recklessly engage in a pattern or practice of violating CMV safety regulations or assist companies in avoiding compliance or concealing non-compliance.  Sanctions against such individuals would include a prohibition on associating with other motor carrier companies, including temporary or permanent suspension of any individual registration and a temporary bar on association with any registered motor carrier.  A related proposal would increase the current civil penalty ten-fold, up to $5,000 per violation, for attempted evasion of motor carrier regulations. 

Third, FMCSA’s policy proposals would clarify that a uniform, Federal legal standard applies to determinations of whether one motor carrier is liable for the acts of a predecessor or closely related carrier.  Under this Federal standard, the Secretary would be authorized to determine, after notice and an opportunity for a proceeding, that the officers, financial arrangements, equipment, drivers, and general operations of the company were closely related to those of another motor carrier.  The Agency’s technical assistance lists 12 factors for consideration and includes a limited, express preemption of State law that is narrowly restricted to Federal motor carrier regulations.  Application of the Federal standard would not affect State corporation laws, such as debtor/creditor rights, taxes, tort liability, director and officer liability or other rights between private parties.  The Agency is very mindful that it is proposing a limited intrusion into what is traditionally State authority.  However, without this Federal standard, the Secretary lacks clear authority to prevent unscrupulous motor carriers from using State corporation laws to avoid Federal penalties and out of service orders.

Finally, some of the Agency’s registration proposals would also assist in identifying and tracking reincarnated carriers by authorizing the Secretary to refuse a USDOT number to applicants that are not fit, willing, and able to comply with applicable regulations.  In addition to granting the Secretary new authority to deny operational licenses to private motor carriers, the USDOT number provision would grant the Secretary express authority to refuse to issue the USDOT number if the applicant company is, or was, a close affiliate or successor to a motor carrier that is not or was not fit, willing, and able to comply with the regulations.  The Secretary would also be authorized to revoke or suspend the USDOT number on these grounds.  Again, such a determination would require notice and an opportunity for a proceeding.  The registration provision would also require motor carriers to update their registrations annually, as well as within 30 days of a change of certain essential information.

Imminent Hazard Orders

The FMCSA has current authority to place a motor carrier, vehicle or driver out of service immediately if the Agency determines that regulatory violations create an imminent hazard to safety.  The Agency’s policy proposals include a number of modifications to this emergency authority.  Currently, imminent hazard orders apply expressly to operations of CMVs in interstate commerce.  The Agency’s proposal would clarify that such orders also apply to the intrastate operations of such interstate carriers.

In addition, the technical assistance, if adopted, would require that the Secretary revoke the operating authority registration of any motor carrier determined to constitute an imminent hazard.  Under current law, operating authority is revoked for only passenger carriers, not for property carriers, determined to constitute an imminent hazard.

Finally, the proposal would partially harmonize the two Acts of Congress that granted the Secretary imminent hazard authority by redefining "imminent hazard" in one section of the United States Code to encompass hazards other than those dealing with hazardous materials.  As a result, the Secretary will have the authority under section 31310 of title 49, United States Code, to disqualify any driver whose continued operation of a CMV substantially increases the likelihood of death, serious injury or illness, or a substantial endangerment to health, property, or the environment.

Driver Penalty Provisions

Through our work developing CSA, FMCSA confirmed that focusing on the motor carriers can advance safety only to a certain point.  To take the next significant step, we need to focus on drivers.  We want to make being an unsafe driver impossible.  To this end, our proposal would require the State licensing agencies to take action against commercial driver’s license (CDL) holders based on a Federal disqualification, regardless of whether the same offenses would lead to action on the CDL under State traffic laws.  This would result in unsafe CDL holders having their State-issued licenses suspended or revoked by the State following a Federal disqualification.  This change is necessary because States are not currently required to take certain actions against a driver’s CDL if the individual has been disqualified by FMCSA from operating a CMV.  To assist the Agency, we need Congressional affirmation that disqualifications imposed by FMCSA must be reported in the CDL Information System (CDLIS).

The proposal also includes a requirement to disqualify an individual from operating a CMV when that individual has not paid a civil penalty or complied with a settlement agreement resulting from a Federal enforcement action.  This would apply to all drivers of CMVs, whether they hold a CDL or not. 

Currently, the Secretary is required to disqualify a driver for driving a CMV when the driver’s CDL is revoked, suspended or canceled.  The Secretary is not authorized to disqualify such a driver, however, if the underlying offense that led to the revocation, suspension or cancelation occurred while the individual was operating a non-CMV.  This means that a CDL holder whose license was suspended following a DUI in his personal vehicle, but who continued to operate a CMV during the suspension, would not be subject to disqualification.  Our policy proposal would plug this regulatory hole.  Under the proposal, we would disqualify an individual from operating a CMV for 1 year for the first violation, and for life for committing two or more such violations. 

The Secretary is required to establish programs to improve CMV driver safety and may access the safety data and driving records of drivers who hold a CDL.  Drivers who drive CMVs that weigh less than 26,001 pounds or that transport less than 16 passengers, however, do not need a CDL.  To close an existing information gap, we need authority to access safety data and driving records of non-CDL holders who operate CMVs.  We included such a proposal in our submission. 

Penalty Provisions

To ensure compliance with our regulations, the Agency needs to make penalties for non-compliance significant enough that they are not simply a cost of doing business.  To this end, we recommend several increases to existing minimum penalties, including:

• Raising the minimum penalty per day for general reporting and recordkeeping violations from $500 to $1,000.
• Changing the minimum penalty for passenger carriers operating without the necessary registration from $2,000 per violation, and $2,000 for each subsequent day of violation, to a flat minimum penalty of $25,000.  A $25,000 minimum penalty would be the same as the current minimum penalty for transporting household goods without operating authority registration, and certainly passengers are more important than cargo.
• We also propose a new penalty of $10,000 per violation for operating without required registration.
• The proposal also calls for an increase from $20,000 to $25,000 for transporting hazardous wastes without the necessary registration.

Even in the face of the best regulations, there remain carriers that consciously choose to defy the requirements.  As a result, we suggest that the maximum penalty for continuing to operate after an unfit safety rating be increased from $11,000 to $25,000.  Our current authority applies to drivers and not the motor carriers.  This loophole needs to be closed. 

In this same vein, we also propose raising the penalty for violating an imminent hazard out of service order from $16,000 to $25,000.  These out of service orders are issued only where the continued transportation presents a substantially increased likelihood of serious injury or death, and a motor carrier’s violation of such orders obviously poses a grave safety risk.  We need the authority for stronger penalties to ensure that these carriers do not continue to do business illegally and unsafely while under such a serious order.

Under our current penalty structure, motor carriers with sufficient capital can take corrective action, pay their penalty and not otherwise be impacted by the enforcement action.  We would like to see a greater impact to the operations of unsafe carriers.  To that end, the proposal would prohibit carriers from operating for at least ten days if they receive an unfit or unsatisfactory safety rating.  This provision would increase the consequences to motor carriers that allow their safety performance to deteriorate to the point of becoming unfit, and would encourage carriers to address safety problems earlier, to avoid this rating. 

In addition, as noted previously, we recommend increasing the penalty for evading compliance through reincarnation, and we would also expand the scope of the penalty to apply to evasion of the Hazardous Materials Regulations and statutes.  This additional penalty is necessary to deter rogue motor carriers, and those who assist them, from, for example, re-registering under a different identity after issuance of hazardous materials and other safety violations and enforcement orders or imposition of civil penalties.

Taking legal action against unsafe motor carriers is often complicated by the fact that they disobey subpoenas or requirements to produce witnesses or records.  As a result, we have proposed that motor carriers that fail to provide access to records and equipment in response to investigators’ demands be placed out of service.  Our proposal includes new authority for the Secretary to suspend, amend or revoke the registration of a motor carrier, broker or freight forwarder for failing to obey an administrative subpoena. 

However, despite our legal actions and penalties, some carriers continue operating unsafely, sometimes with unsafe drivers and/or unsafe vehicles.  To combat this, we seek express authority for FMCSA and authorized State grant officials to impound or immobilize commercial motor vehicles.  This provision would give the Agency an additional enforcement tool when motor carriers refuse to comply with out of service orders, and continue operating vehicles that are safety risks to the vehicle’s passengers, the traveling public, and the driver.

While one of the Agency’s key goals is to remove unsafe carriers, drivers and vehicles from the roadways, we do recognize that some carriers or drivers make honest mistakes.  Our proposal, therefore, includes clarifying language that would allow the Agency, even for violations relating to transportation of household goods, to accept lesser amounts of money, suspension of penalties, payment over time or investment in training or other activities or equipment to improve regulatory compliance.  Such strategies are additional tools that can be used to improve motor carrier compliance with applicable rules, to promote the public interest and to respond with enforcement flexibility as justice requires.  We do not want to put a carrier out of business; we want them to comply.

Registration

As noted in my earlier remarks regarding reincarnated carriers, the Agency is proposing to revamp some of its motor carrier registration provisions.  Under the jurisdictional structure FMCSA inherited from the Interstate Commerce Commission, only for-hire motor carriers are subject to a statutory requirement to register with the Secretary.  Other motor carriers, including private carriers operating equally large motor vehicles, are not statutorily required to register.  To enhance the Agency’s authority to ensure the safety of private motor carriers before they begin operating, we offered technical assistance that would require all motor carriers that operate CMVs subject to FMCSA’s safety jurisdiction to apply for and receive a USDOT number before beginning operations. 

As explained above, under FMCSA’s technical assistance proposal, the Secretary would be authorized to refuse a USDOT number to any carrier if the motor carrier is unfit, unwilling or unable to comply with the Federal Motor Carrier Safety Regulations or the Hazardous Material Regulations.  The proposed language would also authorize the Secretary to revoke or suspend a USDOT number if the Secretary determines that a motor carrier is unfit, unwilling, or unable to comply with the requirements or refuses to submit to a new entrant safety audit.

The Agency is completing its Unified Registration System rulemaking that would consolidate the existing operating authority registration (or MC Number) and its USDOT number systems.  However, FMCSA is currently limited by statute to charging a maximum fee of $300 for registration.  The costs associated with registering and vetting new carriers exceed the $300 cap.  Our technical assistance would allow the Agency to increase this fee to cover the costs of processing the registration.

Medical Programs

The Agency has made significant strides in the past three years with rulemakings related its medical programs, including a proposed National Registry of Certified Medical Examiners and the requirement for medical certificate information on the CDL driver’s record.  To make the next large step forward in this area, we offered assistance that would require States to develop and maintain the capacity to receive electronic copies of the medical certificates prepared by certified medical examiners for each CDL holder who intends to operate in interstate commerce. The availability in the State database of an electronic report prepared by the certified medical examiner will greatly reduce the incidence of fraudulent medical examination reports.

The DOT policy proposal would make available up to $1,000,000 in each of fiscal years 2013 and 2014 to help the States pay for the information technology improvements needed to receive medical examiners’ reports.  The funding is front-loaded to ensure that the States upgrade their driver information systems by the time the National Registry of Certified Medical Examiners and associated requirements become operational.

The Agency receives several hundred applications for vision and diabetes exemptions each year.  Medical exemption requests currently must be published in the Federal Register, but the number of these requests, and the requirement for not one, but two, publications in the Register creates administrative and financial burdens for FMCSA.  As a result, we suggest publishing these notices on a dedicated FMCSA Web site.  Using the internet will be simpler and cheaper for the Agency, will produce quicker results for applicants and will improve public access to these exemption requests.  A statutory change is needed to effect this program improvement.

The FMCSA would also like to make improvements in the delivery of information regarding medical exemptions to roadside law enforcement.  Our proposal would require MCSAP agencies to transmit exemption information to their roadside enforcement staff.  This will ensure that enforcement officers have the means to verify any exemption claimed by a driver stopped at roadside and reduce the opportunities for fraud.

Household Goods Provisions

The Agency’s technical drafting assistance includes additional provisions relating to household goods transportation.  One proposal would allow persons injured by unscrupulous moving companies to seek judicial relief to compel the companies to release household goods held hostage.  A second proposal would authorize FMCSA to assign all or a portion of the penalties it receives from non-compliant moving companies to the aggrieved shipper.  FMCSA also recommends that that the Agency be authorized to order moving companies to return household goods held hostage.

Drug and Alcohol Clearinghouse

Another significant set of Agency proposals would authorize the establishment of a national controlled substances and alcohol Clearinghouse.  The provision would clarify the Secretary’s authority to conduct a rulemaking and authorize funding for an electronic repository for records on alcohol and controlled substances testing of CMV operators.  This new Clearinghouse would improve both driver and employer compliance with DOT’s alcohol and controlled substances testing program and would provide employers important information about drivers before hiring them. 

Miscellaneous

The DOT policy proposals include a variety of additional, miscellaneous recommendations including:

• A representative from a nonprofit employee labor organization would be added to the Motor Carrier Safety Advisory Committee.
• The Unified Carrier Registration Plan would be restructured to limit DOT’s participation and to operate as a not-for-profit corporation. 
• The current statutory provision allowing motor carriers to submit proof of qualification as a self-insurer in lieu of the bond, insurance policy or other security would be eliminated.  FMCSA has determined that the self-insurance program does not further motor carrier safety, and administration of the program for the fewer than 50 motor carriers that participate is unreasonably burdensome and costly to taxpayers. 
• Existing authority under the Motor Carrier Safety Improvement Act of 1999 to include a proficiency examination would be broadened to include tests on new entrant carriers’ knowledge not only of safety regulations, but of applicable commercial regulations and regulations relating to accessibility for disabled persons.  By granting the Secretary authority to develop an examination covering these areas to administer to applicant motor carriers, knowledge of and compliance with these regulations will be increased.

All of these changes will have significant impacts on the Agency’s resources and programs.

Grant Program Changes

We could not complete our safety mission without our State partners who are the boots on the roadways through our grant programs.  In this policy proposal, FMCSA identified ways to improve the efficiency and effectiveness of our grant programs.  We focused on streamlining the Agencies’ grant programs, improving the States’ flexibilities in applying for FMCSA financial assistance and increasing the Agency’s flexibilities in using funds to maximize their safety impact.  Through reauthorization, FMCSA is seeking to consolidate 10 existing grants into 3 umbrella grant programs.  These changes will not only improve the flexibility of the funding, but will also ease the administrative burden on States in applying for Federal financial assistance by allowing States to apply for multiple projects in one application, if they choose to do so.  This structure will also allow the Agency to be responsive to new initiatives and priorities by allocating discretionary funds based on expected improvements to safety.

The 3 umbrella grant programs set forth in our policy proposal on grant programs are: CSA Grants, Driver Safety Grants, and Safety Data and Technology Grants. 

The CSA Grants would provide funding primarily to State and local law enforcement agencies to continue successful enforcement programs and promote new motor carrier programs that improve the safety of the industry and protect consumers.  The CSA umbrella grant program would continue to provide formula grants for the MCSAP Basic and Incentive grants so that the States would be confident that their cornerstone safety initiatives would be maintained.  In addition, the proposal would allow the Agency to provide discretionary grants for New Entrant safety audits, border enforcement, safety data improvement and other high priority programs to address National safety priorities.  The CSA program would also include new Agency funding priorities such as household goods enforcement and hazardous materials safety and security.  The requested flexibility in these grants programs is essential because enforcement priorities can change due to national events, such as 9/11, which drove the need for increased security reviews, due to the development of new technologies, such as electronic on board recorders, or as the result of new safety initiatives, like distracted driving.  The CSA program goals would allow the Agency to target the funding appropriately in a dynamic environment. 

The second umbrella grant program, Driver Safety Grants, is intended to prioritize driver issues by directing funds specifically to programs that impact commercial drivers.  Similar to CSA, Driver Safety would consist of existing program goals, such as continued funding for CDL programs and systems, including covert and overt fraud investigation, and CMV operator training.  It would also include new initiatives, such as prioritized funding for CDL coordinators and funding for States to notify employers of their drivers’ CDL violations. 

The Safety Data and Technology grant program, the third umbrella grant program under our policy proposal, is intended to provide financial assistance to promote the efficient and effective exchange of CMV and CDL data among the States.  Tying vehicle registration to carrier safety data and maintaining a consistent national IT infrastructure improves the quality and safety value of roadside inspections and assists law enforcement officers in targeting unsafe vehicles and drivers. 

The proposed changes to our grant programs will allow the States to request the funds they need for other initiatives based on where the State stands with its safety initiatives.  In addition, this model rewards the best/safest States by allowing them to request funding for new initiatives that will make a difference in their State.

To assist the States, we have suggested changes to the match requirements to create more consistency between the grant programs; we suggested that unused MCSAP formula grant funds be redistributed after August 1 to States that can use the funding; and we requested a change in the Maintenance of Effort requirements for MCSAP Basic and Incentive.  Under SAFETEA-LU, the maintenance of effort level changed annually – creating an increasing obligation for the States in a time of economic duress.  To this end, we suggest that the levels be established once at the start of the authorization period and remain constant.  In addition, we have provided language that would provide the Agency authority to waive maintenance of effort requirements for a period of 1 year and in limited circumstances such as a natural disaster or economic hardship.

To maximize the flexibility of the States, we have also suggested that the States be allowed to request redistribution of awarded funds under each umbrella grant program, provided that the State shows that it is unable to expend funds within 12 months prior to expiration and the State has a plan to spend funds within the remaining period of expenditure on programs with comparable safety benefits.

These changes will allow both the Agency and the States to be more responsive to safety issues and problems, while simplifying the administration of the grants.  As a result, these changes make the programs more effective and allow them to be implemented more quickly.

Closing

As you can see, FMCSA has thoughtfully considered gaps in its statutory authorities and ways to enhance its enforcement efforts and program delivery capabilities.  Mr. Chairman, we look forward to continuing to work closely with the Subcommittee in its reauthorization efforts to make significant strides to improve safety, reduce crashes and save lives.

I thank you for the opportunity to discuss our policy proposals.  I would gladly answer any questions at this time.